Us airline industry- legacy carriers and low cost carriers

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Reference no: EM1316698

U.S. industry responded to the undeserved domestic leisure travel market that existed in the early 1900s with a second wave of low cost carriers (LLCs), which led to the second period of strong traffic growth from the early 1993 through early 2000. Southwest airlines arguably provided the blueprint for U>S and European LCCs effectively competing with the dominant network airlines-maintaining a substantial cost advantage that allows it to profitability charge much lower prices, although there are some differences among LCC business models. Legacy carriers such as United and American Airlines stayed competitive by narrowing their focus on high- fare business travellers until that demand collapsed in 2000, signalling a structural change in the industry. The ability of legacy carriers to restructure their operations in the line with changing market dynamics will be a key determinant of the future role in the industry. Discuss in detail changes in this industry.

Reference no: EM1316698

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