US LCCs and ULCCs face challenges as demand shifts to long haul markets
Pricing traction between the US and Western Europe appears to be robust as travellers are opting to flock to transatlantic markets in the summer high season instead of taking domestic trips.
That's good news for the US global network airlines operating long haul flights in transatlantic markets, and those operators are offering even more robust projections for some of their financial metrics.
The shift in passenger preference is having the opposite effect for US discount airlines, as some of those operators are being forced to cut their financial targets.
JetBlue's revisions are particularly acute, driven by the wind-down of its Northeast Alliance (NEA) with American Airlines.
It is an interesting shift in US market dynamics, but the country's discount airlines seem to believe that it is a temporary change, and that normal demand patterns could return later into 2023 and early in 2024.
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