I have to sort of disagree with Luv2fly. I don't think the majors need to right size themselves. After all, if the LCC's are growing and even major airline flight loads are high (which they are), then the demand is still there. However, I would agree that the issue is the high end business traffic, which will never come back the way it was in the 1990's. The major's cost structures and networks revolved around this. I will take a shot at the unions of those airlines, because they certainly added to it. The airlines themselves are certainly responsible for continuing to charge fares that are too high. We are starting to seen and end to that. Delta has switched its fare structure at SLC
, and will probably do so throughout the rest of its domestic system. If they can all get their costs down to compete with the likes of JetBlue, SWA, and Airtran then they will be viable competitors. They have the infrastructure to do so. I think we are beginning to see them fight back. Song seems to be working. Delta is holding its own against Airtran in the ATL
-NYC and ATL
-LA markets. We'll see what comes out of the the negotiations with the pilots' union, as that will have a lot of impact on Delta's competitiveness.
Also, Airtran and Jetblue are still relatively new. Jetblue is certainly experiencing a honeymoon without labor unions or without heavy maintenance on its planes. Airtran has been very lucky with union relationtions so far, and is also enjoying a maintenance holiday. At some point, all these new planes will have to have major maintenance. The major airlines have huge infrastructures to support this. They don't have to go to Boeing or Airbus for every little thing that goes wrong. This saves them a lot of money, but also costs a lot of money. At some point, JetBlue and Airtran will have to develop this. When labor and maintenance start getting more expensive, then the competitive edge that the two have will begin to slip away. The traditional majors have to find a way to flourish and survive until then.
SWA, Jetblue and Airtran are here to stay, I think. I agree with Leo Mullin that at least 2 of the current 6 traditional majors will fade away. But they will still exist and they will find a way to compete.