Bases on current earnings and statements at DAL/UAL your statement is false, of course the business environment isn’t static and that could all change next year.

 

The LCC's in general start small and fly from periphery cities and markets to avoid direct competition with the established carriers. They have new/cheap labor forces and very low costs.

Then the LCC will start to mature so it will order bigger/larger planes on an attempt to spread out rising costs across more available seats. It'll have trouble operating from the periphery with such big planes so it will migrate towards the cities and markets of the legacy carriers.

Legacy carriers will not just take a new entrant standing still, so they will match capacity and even fly markets at a loss to limit the influx of the LCC into the main city markets. Both will lose money on a market, but the legacies will make it up in other places.

LCC will now decide it needs to be more like a legacy carrier instead of an LCC to compete. This is where we are at now. In a way, all of the LCC's in the US have followed this general path. Some are just more further along than others. Breeze is at the beginning and Spirit has run the course.

JBLU is the only new carrier that has began as a direct competitor to the majors right in JFK and other major cities. They began with a nicer product and didn't just compete on low price model initially.

 

Which an exactly why M and A of smaller carriers must be allowed. The current market is rigged.

 

I think they definitely started out defending their turf, but then discovered that there is money to be made in coach. They're attracting new customers who are also spending good money to upgrade into economy plus sections of their cabins and it has become a significant percentage of their total revenue.

LCC's will have to adapt to this market just like the legacies adapted to the reduction in business travel bookings post pandemic. I also think that it will have to be a lot more than just bigger seats. They'll need to provide frequency, better customer service (the legacies haven't exactly set the bar that high), WiFi, inflight entertainment, etc.

 

But only American went all the way and matched NK customer service levels.

 

lol-imagine if they could live stream the fights at the gate and on board. another revenue source.

 

contrary to popular belief, we’re not the only ones who have passenger issues or even gate agent “customer service” issues. As you notice to be fair, I did put in quotation customer serfice. Seems like every airline has had their fair share.

 

It used to be allowed, that's how we got the big three, and SWA did some M&A along the way.

The current market isn't really "rigged" it's just by it's nature very difficult to break into due to both the obvious factor of economy of scale but even more so the fact that most customers prefer a large network.

Small newtork only works for annual vacation travellers, or people who happen to have a specific reason (business, elderly parent, etc) to regularly travel between two airports which don't have regular or direct service by the big airlines.

Otherwise network access, loyalty programs, and reliability win out.

Now did Lina K get paid off by the legacies to torpedo NK? That would be "rigged" but there's no actual evidence of that that I'm aware of.

 

Most or all of them were doing it before the pandemic. Pandemic may have amplified the effect.

 

Allegiant is still flying big planes from nowhere to nowhere and filling them and making money. So it might not be the LCC/ULCC model itself but rather the fact that most airlines quit following it by acting like a cheaper legacy carrier. Spirit and Frontier particularly.