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LCC's 10 Years From Now.

Sat Aug 30, 2003 2:53 am

What will they be doing?

Some consolidation is likely. No doubt Southwest will still be out there with its 737's, but will it have spread its wings into Canada or the Carribean?

What about AirTran? How will they look?

And of course in Europe, what will Ryanair, easyJet and the others be up to? Will Ryanair be offering bargain STN-US or STN-Australia??????????
Like a fine wine, one gets better with age.
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RE: LCC's 10 Years From Now.

Sat Aug 30, 2003 4:15 am

The LCC sector will be rocked by consumer complaints and under intense pressure from "HQC's"--High Quality Carriers. These HQC's, mostly startups and the new owners of former high quality airlines United and American(having purchased the names from creditors), will offer a quantity the LCC's can't match--luxurious service.

"People want to be waited on hand and foot--and they're willing to pay for it."
That, from a passenger deplaing from mega-carrier, JetBlue added that "we're tired of being used for our money. We deserve better treatment". Big grin TC
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RE: LCC's 10 Years From Now.

Sat Aug 30, 2003 4:53 am

That's the stupidest thing I've ever heard, but your opinion nonetheless!  Smile

I would look at possible alliances between LCC's. You see alliances such as Star Alliance, oneworld, etc. Where are the LCC alliances?
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RE: LCC's 10 Years From Now.

Sat Aug 30, 2003 5:14 am

I'm wondering if Europe will see its own version of jetblue? Maybe easyjet will move up into this category as I cannot see Mr O'Leary contemplating this! More likely that one of the smaller LCC's that will expand into this, or maybe a brand new operator.
I cannot see Ryanair or easy flying to the US or Oz, although perhaps one or two middle eastern or north african destinations might come along.
Has anybody thought how many businesses may relocate/start up nearer the low cost airports like Niedderhein or Torp? If more do to take advantage of lower travel costs for their executives (if other factors are OK too of course) the need for an up-market lo-coster will grow.

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RE: LCC's 10 Years From Now.

Sat Aug 30, 2003 9:44 am

honestly i think the major LCC's will succeed! Southwest of course will be here forever. JetBlue is diffenatly its way  Big grin and so is Airtran! Song on the other hand i'm not too sure on. I've heard from others that their flight are full because of mainline delta PAX conecting on to them. (is this true though?) but with Southwest, JetBlue, and airtran on expanding their routes and aircraft orders coming...So good luck to us all!
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RE: LCC's 10 Years From Now.

Sat Aug 30, 2003 10:24 am

The LCC's are going to feel their own growing pains, from over-aggressive expansion into markets that they thought would be winners. The west coast for starters. This has been a topic on many posts before. PeoplExpress went from boom to bust in 2 years because the touchy-feely atmosphere ended up being it's demise. I think Jetblue will eventually cave in because I see David Neelman being coaxed into some poor decision making or he'll leave the company and the heir's to this enterprise will sink it. The high cost of operating a hub out of JFK, and the constant traffic congestion will see to that. JFK should never be a hub for any airline, except for international flights. If they start opening more hubs, the network will get tangled in itself and they'll have a hard time determining where the profits should becoming from. Plus, All these new aircraft have to be maintained, and when the warrenties expire, they'll have to contend with the outsourcing maintenence, or start up their own in-house program. Both of which are expensive. Outsourced maintenence is very expensive in this country. Most small carriers send their aircraft south of the border, where the maintence can be somewhat sub-par, but within the guidelines. There are eagar workers who are probably very good, but the companies don't pay the same as they do here, or fund the programs as well as they should. And access to certain tools and tech manuals might not be as quick, efficient, or revised as much as it is here. Southwest and Air Tran will probably be around and a handful of others will come and go. The major carriers will eventually find a way to deal with these LCC's and keep them in check. The only reason you heard about them so much, is because they were the only ones who thrived during the downturn. So for some of these LCC's, the honeymoon will be over before they'll have even left for the airport.
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RE: LCC's 10 Years From Now.

Sat Aug 30, 2003 12:07 pm

10 years is a long time, so who can predict. I will only guess.

Apart from Southwest, JetBlue and AirTran, I wouldn't place any large bets on any other LCC surviving. However, consider the possibility of the surviving "majors" becoming more like JetBlue - value focused. I speculate on this possibility because of the coming crop of micro biz jets that will be available in 2 years - Eclipse, Adams 700, Cessna Mustang, etc. These jets could begin to take a lot of premium passengers from the airlines. At first these jets will be air limos, but in 10 years there will so many of them that they will be air taxis (Eclipse claims that they will have a capacity to build 2,000 jets/yr.)

This is not as far fetched as it sounds. Go to the following Nasa web site and be surprised:

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RE: LCC's 10 Years From Now.

Sun Aug 31, 2003 1:01 am

Lighten up, eh! It was a joke...TC
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RE: LCC's 10 Years From Now.

Sun Aug 31, 2003 3:17 am

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RE: LCC's 10 Years From Now.

Sun Aug 31, 2003 3:52 am

Interesting thread.

my thoughts (from a European perspective)...

a) It is unlikely LCC's will fly longhaul - LCC's make profits from frequency & quick turnaround -this is largely not possible on most longhaul routes.

also on longhaul people *need* to be fed - this does not fit in with the LCC strategy

b) joining an airline alliance is again unlikely as LCC's fly to secondary airports (eg stanstead, luton) - thus they can not easily feed their passengers into the longhaulers - such as LHR

c) Consolidation between LCC's is very likely, major carriers are already reacting to LCC's in a major way, and the market cannot continue to grow at the rate seen over the last ten years.

small players, such as BMI Baby, mytravel lite will inevitably not be here in ten years time, in their current shape at least.

LCC is all about scale, so Easy and Ryan will be the remaining LCC players in ten years time....

d) It will be interesting to see which player in Europe is first to adopt DIRECTV (albeit SKY TV!) - in the US you have jetblue and frontier offering live TV, however no one has as yet picked this up in Europe. This would seem to be an area where major carriers can achieve further separation in their business models from LCC's - if they are prepared to throw the bucks at it....

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RE: LCC's 10 Years From Now.

Sun Aug 31, 2003 4:30 am

As all the LCCs start to cover the nation and compete on more routes, their margins and profits will disappear, and they will become just like the Majors, just with very low costs. Simple economics really...if everyone offers a similar product at a similar cost, the economic profit decreases to zero, at which point there are no new entrants into the market since there is no incentive (profit=0).
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RE: LCC's 10 Years From Now.

Sun Aug 31, 2003 12:28 pm

I am more pessimistic about airline travel in the future, in general. I hope this won't happen, but...

It the US it will be EXTREMELY difficult for LCCs (and majors for that matter) to keep airfare as low as customers demand. Crude to produce fuel will become increasingly expensive as extraction will increasingly have to be done in locations that are: (a) environmentally sensitive and/or (b) politically troublesome. Although more efficient engines reduce fuel consumption rates, at some point increases in efficiency will not be able to offset increases in fuel costs. Customers, in similar fashion to gasoline prices in the US, will not fly if airlines attempt to increase airfare to cover increasing costs. Hence, for most people air travel with beome increasingly like travel on a Grayhound. No food, no FFPs, no IFEs (I think these are mainly fads), further reduction in seat pitch, reduced operations. I fear airlines will also cut benefits and pay to their employees and take more adversarial postures toward unions. There will also be further consolidation leading to reduced product differentiation.

As a previous post also suggested, a few small airlines will be able to realize profits by taking advantage of widening gaps in disposible income between socioeconomic classes through catering to the very rich with large seats/beds, IFEs, good food, that very few could justafiably afford.

Like I said, I hope it doesn't happen but I can see it happening.

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