MARKET PENETRATION BY STARTUP CARRIERS, 1974-2002

Fundamental changes in market shares have occurred during the 25 years since the United States government deregulated scheduled airline passenger service in October 1978. Over this quarter century the formerly regulated trunk and local service/Alaskan/Hawaiian carriers faced the entry of about 112 affiliated and independent "startup" carriers operating jet aircraft in domestic scheduled passenger service. While individual carriers succeeded or failed, each carrier group experienced traffic growth through 2000. However, except when mergers intervened, the startup carriers grew more rapidly than the "original" carriers and increased their traffic shares despite the 40-year head start enjoyed by the trunk carriers. A fundamental change occurred starting in mid-2001 and then aggravated by 9/11. While the startup carriers continued to experience traffic growth, most of the original carriers had declines in domestic revenue passenger-miles and passenger enplanements. The result has been significant increases in domestic market penetration by the startup carriers and different responses to traffic declines following 9/11. The current situation has led some industry commentators to predict secular declines in the original carriers' traffic, perhaps associated with bankruptcies. The historical perspective provided in this paper supports this prediction, but recognizes that much effort is being made to adjust to the new circumstances. This paper includes a careful review of airline traffic data since 1974, including data for all the startup carriers, many of which were under-reported in government publications.

• Supplemental Notes:
  • Full conference proceedings available on CD-ROM.
• Corporate Authors:

  Transportation Research Forum

  One Farragut Square South, Suite 500
  Washington, DC  United States  20006-4003
• Authors:
  • Jordan, W A
• Conference:
  • Transportation Research Forum, 45th Annual Forum
  • Location: Northwestern University, Evanston Illinois
  • Date: 2004-3-21 to 2004-3-23
• Publication Date: 2004

Language

• English

Media Info

• Features: Figures; References; Tables;
• Pagination: 16p
• Monograph Title: TRANSPORTATION RESEARCH FORUM, 45TH ANNUAL FORUM

Subject/Index Terms

• TRT Terms: Air traffic; Air transportation; Airlines; Bankruptcy; Carriers by mode; Government agencies; History; Market dominance; Market research; Passengers; Regulations
• Subject Areas: Aviation; Finance; History; Law; Passenger Transportation;

Filing Info

• Accession Number: 00977332
• Record Type: Publication
• Files: TRIS
• Created Date: Aug 10 2004 12:00AM