Ramon Lopez/BALTIMORE
US Airways launched its low-cost MetroJet operation at Baltimore/Washington International Airport on 1 June, leaving industry analysts waiting to see whether Southwest Airlines drops its already low ticket price to protect its market share.
MetroJet's initial fares match those of Southwest, but that could change if the newcomer begins to take customers away from the pioneer in no-frills airline services.
A prolonged fares war could push MetroJet into sizeable losses as its costs per seat kilometre appear to exceed those of Southwest, primarily because MetroJet flight attendants continue to be paid at US Airways rates.
US Airways says it has not set a cost per seat kilometre for MetroJet, but expects it to be "competitive" with its low-cost rival. US Airways has among the highest costs in the US airline industry, at around 8° per seat kilometre (12° per seat mile).
Initially, MetroJet is serving four cities in the eastern USA from Baltimore, with five Boeing 737-200s. The fleet will grow to 20 by year-end and could eventually total 54 - the limit allowed in the Air Line Pilots Association contract with US Airways. Rival Southwest has begun new routes from Baltimore, using new 737-700s.
Part of MetroJet's success will depend upon the succesful negotiation of a new employment contract for cabin crews, which is underway. The Association of Flight Attendants says the carrier is reporting record profits while escalating its demand for concessions.
Source: Flight International
