- Nov 9, 2003
- 16,512
- 5,865
It's undoubtedly late in the process to begin an examination of the arguments used to justify the continued demands for concessions, but I'm bored tonight.....
The "explosive growth of the LCC's" has been cited as one of the reasons for our woes (and need to give till it hurts). Interestingly, good ole Uncle Sam uses some of our tax dollars to analyze just this subject. As with so many things the government does, there is a lag in the data - the latest available looks at the 4th quarter of 2003. But here's what Siegel was saying at that time - October 2003:
"The revenue situation for mature network carriers has deteriorated due to the rocketing growth of low-cost carriers" - In a meeting with the Labor Advisory Committee following the company’s quarterly conference call with Wall Street analysts.
So what does the government say? The report examines the change in LCC competition with the "network carriers" between the 4th quarters of 2000 and 2003, based on % of revenue exposed to LCC competition. Indeed, all the network carriers faced increasing competition from the LCC's over that period. It also found that of the "Big 6" network carriers, US Airways has the least LCC competition in both periods, with 37% of 4th quarter revenue from markets with at least one LCC with a 5% market share. The other "Big 6" carriers - NW at 48%, DL at 50%, AA at 60%, CO at 62%, and UA at 67%.
There are other breakdowns by percentage of LCC market share, but the trend is the same.
To be perfectly fair, the report includes this in the conclusion:
"The expansion of low-fare carriers continues to reshape the competitive landscape of the domestic airline industry. Since the period covered by this Special Feature, low-fare carriers have significantly expanded their presence in additional major markets. JetBlue began service to five cities from Boston in February, added Boston-Oakland flights in May, and announced plans to add Boston-Fort Myers flights in October. Southwest started serving six cities nonstop from Philadelphia in May and began nonstop service from Philadelphia to seven additional cities in July. Independence Air began operations from Washington Dulles to five cities on June 16 and plans to be serving more than 30 cities by the end of the summer. AirTran began flying between Dallas/Ft. Worth and Los Angeles in July."
If you're interested in reading the report, it's at:
Major Network Carrier Exposure to Low-Fare Competition – Fourth
Jim
The "explosive growth of the LCC's" has been cited as one of the reasons for our woes (and need to give till it hurts). Interestingly, good ole Uncle Sam uses some of our tax dollars to analyze just this subject. As with so many things the government does, there is a lag in the data - the latest available looks at the 4th quarter of 2003. But here's what Siegel was saying at that time - October 2003:
"The revenue situation for mature network carriers has deteriorated due to the rocketing growth of low-cost carriers" - In a meeting with the Labor Advisory Committee following the company’s quarterly conference call with Wall Street analysts.
So what does the government say? The report examines the change in LCC competition with the "network carriers" between the 4th quarters of 2000 and 2003, based on % of revenue exposed to LCC competition. Indeed, all the network carriers faced increasing competition from the LCC's over that period. It also found that of the "Big 6" network carriers, US Airways has the least LCC competition in both periods, with 37% of 4th quarter revenue from markets with at least one LCC with a 5% market share. The other "Big 6" carriers - NW at 48%, DL at 50%, AA at 60%, CO at 62%, and UA at 67%.
There are other breakdowns by percentage of LCC market share, but the trend is the same.
To be perfectly fair, the report includes this in the conclusion:
"The expansion of low-fare carriers continues to reshape the competitive landscape of the domestic airline industry. Since the period covered by this Special Feature, low-fare carriers have significantly expanded their presence in additional major markets. JetBlue began service to five cities from Boston in February, added Boston-Oakland flights in May, and announced plans to add Boston-Fort Myers flights in October. Southwest started serving six cities nonstop from Philadelphia in May and began nonstop service from Philadelphia to seven additional cities in July. Independence Air began operations from Washington Dulles to five cities on June 16 and plans to be serving more than 30 cities by the end of the summer. AirTran began flying between Dallas/Ft. Worth and Los Angeles in July."
If you're interested in reading the report, it's at:
Major Network Carrier Exposure to Low-Fare Competition – Fourth
Jim
