The US low-cost carrier (LCC) sector has, in many respects, come of age in 2004. Recent months have seen broad recognition that LCCs are no longer just a driving force for change but that the balance of power has shifted from the legacy carriers to LCCs. After growing extremely rapidly since September 11, LCCs have gained critical mass and now control pricing in the domestic market. This has had the consequence - one analyst called it a "cyclical first" - that the legacy carriers are not seeing any revenue recovery despite the resumption of healthy GDP growth. Yet, LCCs are also reporting lower profit margins or losses in 2004, due to aggressive competitive responses from the legacy carriers, excess industry capacity and high fuel prices. How will they navigate through these challenges?
展开▼
