The airline industry is ever changing in the United States. Recent developments, such as the elimination of Cleveland as a United hub and the ongoing mega-merger between US Airways and American Airlines, make it clear that the industry appears to be consolidating in an effort to increase competition or to find market niches at the expense of some other people.
New and emerging airlines are making strides by appealing to a very specific market based on traveler class, such as business travelers or vacation travelers, and markets based on area, such as new airlines in cities that are seeing increased demand. Other airlines go against some of the big players and offer something that the traditional airlines do not, such as rewards programs or cost structure.
We are now entering an era where four airlines control 80% of the United States domestic air travel market and it is these airlines that will try and reduce those numbers. How will these airlines bite increase their share of the pie, and how will the big four airlines in the United States (Delta, United, American, and Southwest) react to that? At the same time, the big four airlines will increase competition among the four at the expense of some marketing segments.
Amateurs and analysts all over the industry are trying to predict the next big move for the airlines. With the trends towards new markets, new niches, and increasing competition, many people come up with their own ideas about what these airlines will do next and where the industry will be in the near future. Here are 10 predictions that were made based on current market analysis, market opportunities, and future market growth.
10 Delta Airlines Establishes Hubs In Seattle And LA
Delta has been working for the past few years to break into the United dominated Trans-Pacific market. This market, which has grown exponentially over the years, is something that is desirable for many airlines on both sides of the pond. United has two massive hubs on the west coast and is naturally in a good position to dominate this market, but the acquisition of Northwest Airlines by Delta in 2008 put Delta Airlines in a good position to break into the market in a big way as well.
9 Frontier Airlines Establishes Hub At Cleveland Hopkins
As United de-hubs in Cleveland, a small hub that was losing money, another airline will inevitably takes its place. That airline, in the short term at least, appears to be Frontier Airlines. Indigo Partners LLC, which owns Frontier, has made it clear that they want to decrease dependence on the massive Frontier hub at Denver by investing in other markets.
8 American Airlines Will Drop Hub Status From Reagan National
American Airlines and US Airways agreed to give up slots at Reagan National in exchange, among many other conditions laid out by the US Department of Justice, for permission to merge and become the largest airline in the world.
7 Alaska Airlines Establishes Hub In Salt Lake City
In retaliation to the intrusion of Delta Airlines into the Seattle market, Alaska Airlines is starting to deal a blow to Delta Airlines at its hub in Salt Lake City. Alaska will start to compete with Delta in key western markets. Delta has also been slowly downsizing operations at Salt Lake City because of its marketing strategy targeting the west coast.
6 American Airlines And Delta Airlines Will Compete In The Northeast
American Airlines is starting to re-organize its hubs in the northeast ahead of the merger with US Airways. After the merger, American Airlines will have hubs at La Guardia Airport and John F. Kennedy International Airport. It will also inherit Philadelphia International Airport from US Airways.
5 Alaska Airlines And Delta Airlines Will Further Compete In The Northwest
4 Frontier Airlines Will Merge With Spirit Airlines
In an era of mega mergers, there may be one more merger to round out what has defined the post-9/11 industry. The most likely new pairing is the merger of two airlines that are owned by one company. Indigo Partners LLC owns Frontier Airlines and Spirit Airlines.
3 Delta Airlines Reduces Service In Salt Lake City And Cincinnati
Many airlines will continue to modernize fleets and get rid of unprofitable airplanes and destinations. Delta Airlines started to reduce Cincinnati in 2008 after merging with Northwest Airlines and inheriting two massive midwest hubs. Cincinnati shrunk so small that the operations of the airport moved to one terminal. It may only be a matter of time until Cincinnati is eliminated altogether, especially since the airport has one of the highest landing fees in the nation and many locals flock to nearby airports for their flying needs.
2 Trans-Atlantic Competition Will Increase
1 Trans-Pacific Competition Will Increase
Similarly to the increase in competition from the Atlantic, the Pacific markets in the far east and in southeast Asia have exploded in recent years and there is more opportunity than ever for new routes. In addition to increasing competition, there is a huge marketing war between the United States airlines for customers in the trans-Pacific market. There is also an increase in competition at the fewer airports in the West for space to establish hubs.
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