Monday, November 27, 2006

LCCs taking over FSCs

The airline industry has always amazed people and 2006 appears to be no exception.

America West, one of deregulation's few success stories, recently merged with US Airways Group and incorporated the US Airways name. It appears now that US Airways, former America West, is attempting to get its hands on Delta Air Lines! What a transition from its founding in 1981, bankruptcy a decade later, to its merger spree of 2006.

One can definitely say that the LCC business model is alive and well.

And we can not ignore Ryanair's attempt at gaining control of Aer Lingus. It appears as if the low-cost carriers have transformed themselves into formidable foes in the part due to the business model.

Of course, this demands that one ask what happens to the business model itself. Are the two models, LCC and FSC, transitioning to one hybrid model? Will US Airways transform Delta to a large, semi-LCC player? Or, will US Airways adopt the model of Delta and become an FSC? As the two models continue to battle over market share and target markets the will be adopting and adapting elements from each business model that works best.

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