American West’s CEO: Expect Lowfare Consolidation

Is the honeymoon over for lowfare carriers?  America West’s CEO said yesterday that he expects the lowfare carrier space in the US to shrink from seven to two or three over the next few years through a mixture of consolidation and bankruptcy.  Lowfare carriers, while generally successful, have received accolade after accolade in the press, with nary a negative comment to be found anywhere.  That may change soon, as America West, among others, report negative quarters as the lowfare industry struggles with high fuel costs and the majors’ fare realignment.  America West sees itself as a survivor, likely through a merger, and I think that it will thrive once again—its Mexico routes and Vegas hub are strong and certainly attractive to, say, an AirTran if they are looking to expand out west.  Then again, airline mergers tend to be miserable, and I invite anyone to tell me 3 US airline mergers that have been successful (Delta and Western, maybe?).

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