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The viability of U.S. Legacy LCCs today...

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  • The viability of U.S. Legacy LCCs today...

    Hiya All,

    As we are seeing in Europe, the stratification of services and intelligently applying the best assets to suit markets - have led to major carriers such as LH, AF/KLM and I.A.G developing their own LCC brands (Eurowings, Transavia, and Vueling as notable, respective examples).

    Further, LCC competition against the legacies, have lead to a change of tack - retreating from the markets with the higher costing asset (the legacy carrier) and a replacement, or even an increase in capacity advantaging on the essential natures and strengths of the LCCs (lower costs, better aircraft utilization, more closely matching competitors offerings).

    “We had to find a solution to fight against the strong competition of low-costs and to regain growth” explains Karl Ulrich Garnadt, CEO.

    “It’s a matter of having the right product, the right plane for the right clientele,” insists the CEO.

    http://www.tourmag.com/Eurowings-Luf...s_a72628.html#
    ...and this article is from 05/03/2015! The tool, though, advanced the logical progression, so much so that it was directly addressed in the following quote from the article;

    “We’re not going to cannibalize Austrian. On the contrary, Eurowings will enable us to redevelop on the routes where the company could not operate any longer due to lack of profitability. The director of Austrian is, in fact, happy of the arrival of Eurowings in the zone,” insures Kal Ulrich Garnadt.

    http://www.tourmag.com/Eurowings-Luf...s_a72628.html#
    Less than two months later;

    "It may also integrate its Brussels Airlines and Air Dolomiti units under the Eurowings brand. Lufthansa said it is also open to cooperation and potential acquisitions at Eurowings."

    http://www.marketwatch.com/story/luf...ion-2015-06-30

    There in lies a question...

    What differences are there between the European markets/economics/operating realities and the U.S.'s that make such a creation (a legacy creating an LCC to handle the growing, general LCC threat) inviable?

    TED, and Song - were both folded back into their parent groups after a time. Understandably so, the conditions were different when these products were launched, however, at present - would the stratification of services (using the legacy brands to handle long-haul and lucrative markets, and an LCC brand to handle the domestic/lower yielding/more competitive markets) not logically advantage US legacy carriers in much the same way that the Euro 3 have summized?
    Whatever is necessary, is never unwise.

  • #2
    The difference is that, in the USA, the legacy carriers became pretty much LCC in their own (especially in the domestic market) so they have no need to create LCCs.

    --- Judge what is said by the merits of what is said, not by the credentials of who said it. ---
    --- Defend what you say with arguments, not by imposing your credentials ---

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    • #3
      Originally posted by AA 1818 View Post
      There in lies a question...

      What differences are there between the European markets/economics/operating realities and the U.S.'s that make such a creation (a legacy creating an LCC to handle the growing, general LCC threat) inviable?
      The night's still young. We may still see those sorts of developments yet...

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