I wanted to point out a small trend that appears to be growing among international carriers, that I think would be an interesting strategy here at home. A number of airlines (Thai Airways and Singapore come to mind) have decided taht they are going to focus their businesses on profitable, business-class-friendly long-haul international routes while allowing, or even cooperating with, low fare carriers to cover short-haul, low profit traffic. Thai Airways owns a piece of Nok Air, a low-fare airline that covers short-haul flying for the airline, while Singapore Airlines owns Tiger Airways, a low-fare carrier. Rather than using long-haul profits to subsidize its unprofitable and highly competitive short-haul flying, they’ve started completely separate companies to handle the task, minimizing brand confusion and ensuring that the flight experience remains undiluted on the main carrier.
In the US, United and Delta have moved a part of the way in this direction, but have made little-to-no effort to integrate their low-fare offspring with the main carrier. Would it make sense for United to spin off TED and use it to feed traffic to its new transcon P.S. and International services? Perhaps. Could Independence Air serve as the US arm of an international carrier trying to broaden its US reach? Perhaps.
These international airlines are onto something, focusing on profitable routes and maintaining passenger experience and expectations, a couple of things US carriers have done miserably since 2000. Maybe it’s time to start thinking about focusing on what the major carriers do well (long-haul and international travel) and leave the unprofitable traffic to airlines whose cost structures allow for it.