The dynamics of the airline industry are becoming increasingly pronounced as deregulation and competition increase. Technology or government involvement are no longer guarantees of success. However, the business model is becoming the leading factor of survival in this industry. This blog comments on the development of airline business models throughout the world, and will hopefully give some insight into airline operations, the industry, and business models in general
Monday, July 07, 2008
First Dallas then Dryden...Canada
Gary Kelly of Southwest has stated that the grandfather of LCCs will be announcing a codeshare with a yet-to-be-announced carrier to Canada. WestJet is the first carrier that comes to mind. The LCC business model is predicated on using low-fares to both entice new travelers and steal disloyal passengers from competitors. However, as those markets dry up (there are only so many origin and destination markets that can fill a 737 and still provide a financial return) those LCCs are forced to move into the territory of full-service carriers or find new markets. Southwest has had a presence at various primary airports, Denver and San Francisco, just to name a few, where the airline battled with more traditional carriers. However, it now appears as if international expansion is on the drawing board (click here). Southwest did have a codeshare in place with ATA to Hawaii, however that arrangement fell through with the carrier's demise. Now Canada is a market that Southwest is looking at. Asia and Europe are also mentioned, however a time frame is not given and at the rate that this industry develops it's hard to say how things will develop.
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