Ladies & Gentlmen,
I am a frequent flyer and invest in avaiation also. A lot of the major carriers blame 9-11 for the industries problems. The is a false statement due to the fact they were bleeding cash already. I will admit it helped it speed things up, but was going to happen 9-11 or not.
The facts are the majors have generated such distrust between their employee groups, that everyone is taking and demanding their piece of the pie, even when they should be doing what is neccessary to compete with the likes of SW, JB,& AT.
A house divded will eventually fall apart! The are not building anymore they are reacting.
Their cost structure is so high that they just cant compete without bleeding cash.
Right now some of the majors are matching prices. Lets take a look at this for a moment.
American - costs them 11.4 cents to take you 1nm in their seat.
JetBlue - Cost them 5.8 cents to take you a mile in their seat.
So the majors can fly and match the prices all day long, but the are being crushed.
What they are doing is taking money from the profitable routes, on which they dont have to compete with a LCC and using it to offset the losses in competing with them.
As the LCC's expand the profitable routes they use to compete will continue to be erroded by the LCC's until they end up smothering them. Then its chapter 11 followed by 7 for them.
In regard to JetBlue's entrance into LGA...
Jetblue's product is superior to any of the majors, unless your flying business or first. Then is it really worth the extra cash if your just flying domestic (NOT!).
The live TV is awesome and they just announced they are putting in XM-Satelitte Radio 100 channels. Their employees seem to really care about their passengers also.
So here it is the choice!
I can have Live TV, XM Sat Radio for free! Leather Seats, nice folks that actually help me put my things in the overhead! (hello Delta!) Have as many drinks and snacks for free, all at a great price. I would gladly pay more for it, if another airline was offering a lower fare. The only reason others may continue to do ok once JB goes into LGA is they are not going in with a large capacity at this point.
Then There is Delta SONG.
Lets dress up a Delta jet with LIME green Paint. I went on the Delta airlines website to get a flight from NY-FL and it listed the same flight that was on the SONG website. When I got there people were actually confused. DELTA- SONG they are one in the same. Its got Delta pilots paid the same, Delta Ramp paid the same, Delta gates cost the same. The difference is more time in the air, and their was NO TV in aircraft and cheaper FA's wahoo. They still won't be able to compete with their CASM. (Cost available seat mile). SONG lost 55 million last qtr. got it from an inside Delta source. Ask them to break out the finacials between mainline Delta & SONG they wont do it! Another failed effort looks like to me.
(SMOKE & MIRRORS)
These major carriers just don't get it, they keep dancing around the issue which is their failed or rather outdated business plan! They better wake up and swallow that tough pill and get on with it. Oh and when and if they do good luck keeping employee moral and infighting out of the picture. This has already become aparent to the costomer. Unfortunetly for some it's already too late.
FOLKS WE ARE WITNESSING THE CHANGING OF THE GUARD IN AVIATION.