The US low-fares sector is setting the pace for growth, emerging with a 22% market share by December while two carriers, America West and Frontier Airlines, have revealed ambitious plans. Both have become poster children of the successful application of government aid, having returned to profitability after receiving federal loan guarantees from the Air Transportation Stabilization Board, the post-11 September bailout panel.
Phoenix-based America West is contemplating a major narrowbody order, in addition to the six to 10 Airbus A320-family members it will take this year. The first carrier to win a federal loan guarantee, it will also hire about 1,000 new frontline employees this year as it increases frequencies between its secondary hub at Las Vegas and 15 major cities.
The growth at its Las Vegas and Phoenix hubs will commit the 20-year-old airline firmly to its strategy as a low-fares network carrier. However, the airline will add flights on transcontinental routes with the same characteristics as its cross-country nonstop services, linking both Los Angeles and San Francisco with both New York Kennedy and Boston Logan.
Another low-fare carrier in the west, Denver-based Frontier, will begin its first mini-hub or focus city when it expands its Los Angeles International operation in April. Late last year, it became the first carrier to repay a loan from the stabilisation board, presenting a cheque for $11.6 million to pay the balance on a $70 million loan and loan guarantee package it was granted in November 2002.
The Los Angeles move will add flights between the California city and three major business centres - Kansas City, Minneapolis/St Paul and St Louis. With considerable connectivity between its Denver home and Los Angeles, Frontier, now in its 10th year, is also firmly a low-fare network airline. Frontier is also girding itself for a challenge in Denver from United's new-low fares unit, Ted.
The ranks of low-fares network carriers may increase now that Atlantic Coast Airlines (ACA) has overcome a hurdle to its plan to become Independence Air. Mesa Air Group dropped a hostile takeover to bring ACA back into the United Express family.
Source: Airline Business
