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Article Excerpt
If 2002 was a year for any airlines, it was a year for the low-cost carriers. Whether they as group went by LCCs, low-fare carriers, small point-to-point carriers or growth carriers, they generally could have been described as profitable, a descriptor wholly inappropriate for their larger cousins. For the likes of JetBlue and AirTran, profitability continued into the first quarter of this year, one of the most trying periods in the history of commercial aviation.
For others, some squarely in the low-cost category and others simply trying to get there, 2002 presented many of the same challenges faced by the Big Six: depressed passenger yields, low traffic and stinging fuel bills. Such pressures forced Vanguard and National airlines to close up shop, and additional bankruptcies are quite possible.
Yet, as a group, smaller and more nimble carriers have reason for optimism. Oftentimes they fly point to point, relatively are immune from strangling labor costs and rely heavily on more efficient Internet distribution.
Such feeder carriers as Atlantic Coast, Mesa and SkyWest also faired much better than the major carriers they serve. Even as the majors continue looking to regional operators for passenger flow and marketshare, the rapid growth experienced in the past few years may slow as network carriers realize lower mainline labor rates.
Smaller U.S. carriers--with certain exceptions--are positioned relatively well compared with the Big Six and likely will continue infringing on major carrier turf and stealing share. Leading the charge is New York-based JetBlue Airways. The rapidly growing airline in 2002 increased annual passenger revenues by 98 percent, traffic by 108 percent and capacity by 96 percent. It finished the year serving 19 cities with 37 planes and a net profit near $55 million.
"JetBlue...
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