Some smaller cities and Washington Dulles airport are the main losers of Independence Air’s decision to cease services in early January. The shutdown of the airline in early January was almost anticlimactic after the cash-haemorrhaging carrier’s fruitless search for investors.
The move provided substance for sharp criticism of its disastrous strategy of using 50-seaters in low-fare service, but produced little in immediate change in the airline competitive landscape.
Many observers applauded its demise, arguing that the industry needs fewer players to reduce capacity and lauding the fact that it had neither sought nor received a bailout or other form of government aid. But the carrier’s relatively minor share of the industry – it constituted less than one-half of 1% of domestic capacity – makes its collapse more symbolic than real. Its demise has been felt the most in smaller cities such as Charleston and Greensboro, where Independence regional jets offered the sole low-fares service.
Other carriers such as US Airways and JetBlue moved into the airwaves of Independence’s north-eastern territory to announce they were cutting fares and increasing frequencies. JetBlue began a shuttle-like route between Boston Logan and the Independence home base of Washington Dulles, a service it had announced late last year at about the time Independence parent FLYi Inc went into bankruptcy reorganisation and began its failed search for investors.
JetBlue and fellow discounter AirTran Airways are each expected to increase their relatively small operations at Dulles. Independence was a major presence at Washington’s international airport, offering almost a quarter of daily departures. Its fares had stimulated traffic at the airport, from 18 million in June 2004, when Independence began its low-fares services, to 27 million annually shortly before its collapse.
Local Dulles traffic grew by 96% on Independence routes, estimates Leo Schefer of the Washington Airports Task Force. He believes the demonstrable demand for low-fares service will attract replacement discount carriers to the Dulles market.
The 30 Independence Bombardier regional jets and 12 Airbus A319s are parked for the time being. ■
Source: Airline Business
