Why Start-up Airlines are not Successful
Where are the start-up airlines? Start up airlines battle the challenges of rising fuel prices, lack of airport gate and competition from the major carriers. With the big carriers cutting routes and increasing airfares, this should be the ideal time for start up airlines to set cut rate fares and serve smaller airports that are eager for more flights as in the case of Southwest Airlines in 1971 and Jetblue in 2000. It is not so today as rising fuel prices has eaten deep in the airlines' profit and also the smaller airports have low passenger traffic thus leading to cutting routes by the major carriers on grounds that they are unprofitable. In this reality airlines must fly full planes to make a profit. How would a start up airline set cut rate fares in the face of expensive fuel and unprofitable airports? They would have to contend with the major domestic carriers who have taken over almost all the airport gates. Investors are now scared and wary of lending to an airlin...