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US legacy airlines enjoy a heyday while ULCCs face margin pressure

Analysis

United Airlines believes an inversion is occurring in the US airline industry with ultra-low cost airlines, which were previously outperformers, battling margin pressure while legacy airlines are holding their own.

Now the question is if this is a permanent reversal of fortune, or just an aberration due to a myriad of factors ranging from air traffic control and supply chain constraints to shifting preferences among passengers to a more upscale experience.

Only time will tell how long legacy airlines will have the upper hand, but for now those operators are confident in their prospects for the near future.

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