The model of business is growth, and the airlines are certainly no exception. Since the airline industry was deregulated in the United States, airlines have been on a sometimes fast, sometimes slow growth trajectory — a constant interrupted only by bankruptcy filings or short-term industry crises.
Indeed, growth is important to the airlines. New equipment and staff help keep costs low, investors find desired returns, and passengers find new options at competitive prices. The airline industry is built to grow.
However, new headwinds have raised questions of exactly how the airlines can continue to grow amid skyrocketing costs and a pilot shortage. For the ultra-low-cost carrier segment of the industry, the renewed questions become even more poignant.
United Airlines chief executive Scott Kirby commented during the airline’s Q3 earnings that the ULCC airlines represent a “doomed” business model in this new cost environment TAC Analysis considers the implications of this pronouncement. Are the ultra-low-fare airlines destined for extinction, or are the legacy airlines, emboldened by a recent windfall of profits, once again underestimating no-frills travel?
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.