Some of the "Big Six" in their infinite wisdom, decided to play the "If You Can't Beat 'Em, Join 'Em" Game in response to the increase in marketshare of LCCs during the Mid-90s and again in the post-9/11 days. In the past, most new entrant LCCs were easy to kill off, just undercut them on or match their fares and keep your customers. After the demise of Eastern and Pan Am in the early 1990s coupled with cutbacks at other airlines, several airports became virtual monopolies for airlines like Delta, USAir, and United. It was during this time period that Southwest began the expansion that has made it the dominant LCC in America. Southwest came in and took on USAir @ BWI
. TWA tried to take on Delta @ ATL
but was thrashed not only by Delta but by several startups @ ATL
as well (Valujet, Kiwi International, Air South). United had DEN
to itself after CO
cut their hub in Denver. You had upstart Western Pacific over in COS
, and a reborn Frontier @ DEN
, along with Southwest entering the west coast in a major way via the Morris Air buyout.
With Southwest and later a host of other LCCs giving US, UA
, and DL
fits, those airlines decided to counter it with "airlines within the airline". Continental struck first in 1993 with it's Continental Lite (CALite) concept. It lasted a few years before CO
ended it. Then United started it's West Coast LCC concept Shuttle by United/United Shuttle. Delta introduced Delta Express in 1996 and based it out of MCO
because it was the most popular destination the majority of the LCC competition flew to. Then in 1998, US Airways launched Metrojet.
After 9/11, things changed. As part of the cutbacks airlines were making, UA
axed their United Shuttle and US Airways their Metrojet operation. Delta kept Delta Express around for another few years until it was fully replaced by the more upscale Song and United soon there after launched Ted. Song and Ted were pretty much aimed at Frontier, JetBlue, and to a small extent, AirTran. WN
, and B6
were the airlines that were doing better than the competition, and in many cases, were offering superior service to what the Big Six had on many routes.
The one thing about the "airline within an airline" concept is that you end up alienating some of you customer base. This is something CO
learned with their ill-fated Continental Lite concept. Imagine flying one leg on regular CO
up in first class and the flight you're connecting on is CO
Lite service. Same can be said flying UA
. There are certain cities where the only UA
service is Ted (Like LAS
). Some of this is also the same complaints frequently fliers have made in regards to the regional jet operations as well (and is part of the reason why a first class cabin is appearing in more and more a/c flown by regional affliates).