North American hybrid airlines offer a range of possibilities as consolidation takes hold: Part 2

This is the second report in a two part series examining the ultra low-cost carrier and hybrid business models in the US market place. The first part focused on ULCCs, including Spirit Airlines and Allegiant Air.

Similar to their ULCC peers, North American hybrid airlines stand at an interesting crossroads as consolidation creates opportunities for possible traffic, notably product differentiation. Carriers such as Alaska Airlines and JetBlue Airways that target higher-end leisure customers and more cost conscious business travellers will need to evaluate their products, and decide how to evolve as their competitive overlap with the three remaining legacy carriers (once American Airlines and US Airways complete their merger). The impact on them will be more pronounced than on ultra low-cost leaders Allegiant and Spirit.

JetBlue has already shown some signs of its potential evolution through its decision to create a premium section on daylight transcontinental flights in 2014 in order to cement its hybrid status and offer medium frills as its legacy transcontinental competitors all prepare to offer lie-flat seats on those flights and Virgin America already offers a dedicated first class.