US ultra low-cost airlines capitalise on opportunities created by consolidation: Part 1

Consolidation - and route reductions and higher fares - in the US market place are creating opportunities for the new breed of ultra low-cost carriers (ULCCs) led by Spirit Airlines, which set out on a path in 2006 to achieve unit costs among the lowest in the market. As Southwest's costs are beginning to mirror those posted by legacy carriers, Spirit is leading the charge to capture traffic the soon-to-be three big full service network carriers no longer find attractive.

Capacity reductions that have resulted from both consolidation and a revamping of the airline business in North America have also created three distinct business models in the region - full service network carriers, hybrids and ultra low-cost airlines. Strong contenders have emerged in each category. The remaining carriers either need to carve out a new niche or adapt to the new maturity taking hold in the market place.