PanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 8 Posted (10 years 4 months 2 weeks 11 hours ago) and read 4293 times:
I guess I am trying to combine two threads into one question here. Bear with me...
While reading the thread about Busiest Domestic Air Routes, I noticed that here in the west, routes to PHX and LAS are dominated by two airlines - HP and WN. Not so unusual in and of itself, but it was recently reported that HP is posting a first quarter profit, and of course WN is doing its usual amazing job at staying solvent (to say the least).
Is there a reason both airlines are competing so successfully and mutually profitable on these routes? Is this simply a matter of the nature of a duopoly? Or do both airlines have extraordinarily good yet different business models? And if so, is this a model that could somehow be duplicated elsewhere in the U.S./world?
Thanks in advance!!
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RDUDDJI From Lesotho, joined Jun 2004, 1686 posts, RR: 2
Reply 1, posted (10 years 4 months 2 weeks 11 hours ago) and read 4282 times:
Well WN has very low costs. HP actually had a small loss before special items were included, but they are also a LCC. B6 made money last quarter, they are an LCC... hmmm...I see a trend here. I don't have time to pull up FL's most recent report, but IIRC they are very close to profitability too.
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DfwRevolution From United States of America, joined Jan 2010, 1073 posts, RR: 50
Reply 2, posted (10 years 4 months 2 weeks 11 hours ago) and read 4283 times:
Quoting PanAm747 (Thread starter): Or do both airlines have extraordinarily good yet different business models?
HP's buisness plan isn't radically different than WN's. They are like most LCCs with minor tweaks on the book WN wrote, they are more alike than they are different.
Quoting PanAm747 (Thread starter): Is there a reason both airlines are competing so successfully and mutually profitable on these routes? Is this simply a matter of the nature of a duopoly?
PHX and LAS (especially) have lots of traffic, and there are pleanty of markets that support multiple airlines. Chicago (UA, AA, WN) comes to mind, though only WN is making money. WN has twice the market share as HP in LAS, and WN only has 36% of the market.