United Airlines senior VP financial planning and analysis John Gebo, speaking at the CAPA Australia Pacific Aviation Summit, said (08-Aug-2013) major carriers in the US “can easily co-exist” with ULCCs, adding the market is “at much less risk” of a new entrant disrupting the market, citing Southwest Airlines as a previous example. Mr Gebo said larger US carriers now see “70%-90% LCC penetration” across their domestic networks, and that the industry is now able to compete with LCCs “in a way that it wasn’t ten to fifteen years ago.”
United Airlines: Major US carriers 'can easily co-exist' with ULCCs
You may also be interested in the following articles...
Frontier to celebrate ULCC transition with an IPO: intensity grows in the US competitive landscape
After toying with the idea of engaging in an initial public offering for more than year, the US ULCC Frontier Airlines now intends to go public as its major shareholder, ULCC specialist Indigo Partners, sets its sights on Argentina. Frontier has arrived at and passed many ULCC milestones, including producing unit costs excluding fuel below the USD6 cent benchmark for the ULCC model, placing it on par with its fellow ULCCs Spirit Airlines and Allegiant.
Frontier markets its product differently from other US ULCCs, giving passengers the options to purchase product in a bundled form or a la carte, but it still maintains ultra low fares. However, Frontier couldn’t escape the pricing pressure that permeated the US market in 2016, joining the majority of the country’s airlines in posting distinct yield and unit revenue declines.
Obviously, despite the pricing pressure and changing dynamics in the US market, Frontier remains bullish on the opportunities for ULCCs in the market place, concluding that numerous markets exist for it to operate profitably with low fares.
During the past several years Frontier’s network focus has been somewhat murky. Now Frontier’s network strategy is targeting high fare, underserved routes. And like its rival Spirit, Frontier also singles out medium sized markets that offer some protection from larger competitors.
"Level": IAG's new long haul low cost brand to launch 4 routes from Barcelona, with more to come
On 17-Mar-2017, IAG announced the launch of its newest airline brand, 'Level', which it will use to operate the group's first long haul low cost flights from Jun-2017. The launch routes will be from Barcelona to Los Angeles, Oakland, Buenos Aires and Punta Cana. It will compete head to head with Norwegian on the Los Angeles and Oakland routes.
In Dec-2016, IAG had said that it had not yet decided whether to create a new brand or to operate its planned Barcelona long haul low cost routes under one of its existing brands British Airways, Iberia or even Aer Lingus. Vueling was ruled out, although its strength at Barcelona will provide connecting feed. IAG's solution is to create Level, a new airline brand, but to operate it initially with Iberia pilots and cabin crew.
IAG has also confirmed that Level will deploy two new 314 seat Airbus A330-200s (293 economy and 21 premium economy) and will create up to 250 jobs based in Barcelona. Level, IAG's first entirely new airline brand, will also look to expand to add flights from other European cities.