Thursday, June 26, 2008

A World Without Legacy Airlines

Recent announcements of service cutbacks have made me wonder: What would Atlanta look like without Delta, Denver Without United, or Dallas without American?

There is plenty of precedent for a major airline abandoning a hub, such as Eastern in Atlanta, Continental in Denver, or Delta in Dallas. In each of those cases, there was another major airline to take up the slack. In other cases, a major airline has eliminated a hub, leaving a vacuum. This has happened in Pittsburgh, St. Louis, and other smaller cities.

I cannot think of a situation where a major airline has disappeared completely, and turned over a major airport into a hub for low cost carriers.

United has just announced they have eliminated all service to both West Palm Beach and Ft. Lauderdale, a large and growing market. In Denver, that means that both Frontier and Southwest will be serving Ft. Lauderdale non-stop, with United not providing any service at all to south Florida, other than Miami. United also suspended non-stop service from Denver to London.

At the same time, Southwest Airlines is increasing service in Denver.

If this trend continues, Frontier and Southwest will be the only major airlines here. The same might be happening in Las Vegas where US Airways in scaling back while Southwest is ramping up.

The thought of loosing a major airline used to be a troubling to resident's of one of their hubs. In the case of Atlanta, Delta disappearing would mean a major loss of connecting international service there. In the case of Denver and Las Vegas, there is not much international service to lose. While competition is generally good for consumers, sometimes it is best for the market when sub-standard products are not offered, and miserable companies are allowed to fail. Frankly, I welcome the day in Denver when United is no longer competing to lower the bar while Southwest continues to lower prices.

Maybe we are getting to the point where the legacy carriers will only be offering international service from coastal gateways, with limited connecting service. If that is their business model, they are in big trouble, as foreign carriers offer a vastly better product.

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