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www.travelweekly.com
THE NATIONAL NEWSPAPER OF THE TRAVEL INDUSTRY
Market shifting
from legacy air
to low-cost lines (NO DUMPING)
NOVEMBER 23, 2009
Traditional carriers continue
to lose domestic market share
By Michael Fabey
Six years ago, JP Morgan analysts
predicted that low-cost carriers
“will eventually inherit the Earth.”
It’s a big planet. But low-cost carriers are certainly taking an ever-larger share of the U.S. domestic
market.
And while they might not yet be the masters of the universe that the financial gurus prophesied, a Travel Weekly analysis of
Transportation Department data reveals that
low-cost carriers continue to grab domestic
market share as legacy airlines focus ever-greater attention on international routes.
(NO PHOTOS)
Curse of the Pharaohs
‘Low-cost carriers are
putting the fear of God in
legacy carriers’ hearts.’
— Darryl Jenkins, the Airline Zone
Millions are drawn to Egypt’s ancient wonders each year.
Can these icons of antiquity endure the wear and tear?
STORY AND PHOTOS BY
MICHELLE BARAN PAGE 18
See LOW-COST on Page 59
Industry analysts predict that the shift to
low-cost carriers should dominate the industry for some time, but especially for the
duration of the Great Recession. As a result,
they predict, passengers will benefit with
lower base airfares while carriers struggle
with lower yields.
“The LCCs have had an incredible impact
in terms of costs and fares and at the same
time are putting the fear of God in the legacy
carriers’ hearts,” analyst Darryl Jenkins of the
aviation industry economic website the Airline Zone said of low-cost carriers.
In 2000, the major legacy carriers — Alaska, American, Continental, Delta, North-west, US Airways and United — controlled
about 89% of domestic traffic market share,
[ AMID MARKET NOISE, A STEADY, NO-HYPE/NO-HOOPLA LAUNCH STRATEGY ]
Pssst! Carnival also just christened a new cruise ship
By Johanna Jainchill
If you blinked, you might have missed it:
Carnival Cruise Lines this month christened
the Carnival Dream, its newest and largest
ship, in a New York ceremony that was subdued yet unmistakably Carnival.
Despite the presence of the Dream’s godmother, Oscar-winning actress Marcia Gay
Harden, and although the ship offered a twist
on christening traditions by having a 9-year-
old girl name its water slide, the Dream’s arrival was accompanied by nothing close to
the level of hoopla that has surrounded other
ships debuting this year and next.
It’s not easy to compete with Royal Caribbean International’s 5,400-passenger Oasis
of the Seas, the largest and most expensive
cruise ship ever built. The Oasis debuted
only a week after the Dream, complete with
coverage on “Good Morning America.”
And Norwegian Cruise Line’s upcoming,
4,200-passenger Norwegian Epic has become
as talked about for the features it won’t have
(no main dining room) as for such innovations as cabins with curved walls.
Even the other Dream, the one being built
by Disney and slated to debut in 2011, has
managed to steal headlines this fall with a
four-deck-high “water coaster” ride and virtual portholes in its inside cabins.
But if Carnival is concerned about any of
this, the anxiety isn’t showing.
“Carnival is very happy with the niche they
have created for themselves,” said Cruiseguy
.com’s Stewart Chiron. “It works well, and
they know what kind of profits they are going to get out of it. They go to market differ-
See CARNIVAL on Page 58
