US major airline & LCC costs, Issue 61 Dec 2008/Jan 2009
The US major airlines have struggled to be profitable since 9/11. They have been plagued by constantly rising fuel costs, increased competition from LCCs, weakening passenger yields, and falling passenger volumes. The majors have, however, made large reductions in their non-fuel costs, and they were profitable in 2006 and 2007. With fuel prices now 75% lower than highs of mid-2008, have the US majors done enough to be consistently profitable and be more competitive against the LCCs?