American, United and Delta making last-ditch effort for growth

America’s legacy carriers such as American Airlines, Delta Air Lines and United Continental are presently finding it a tough going for themselves. These are surely tumultuous times for these carriers and they just might be fighting their last war to remain in business.

Prominent U.S. aviation experts said that for over a decade now these airlines have faced dire times resulting in depleting revenue outcome. Also, all the three carriers have gone bankrupt at least once. Experts now say that for these carriers capacity discipline now remains their collective mantra.

A recent study said that the reluctance of these legacy carriers in expanding further has created a vacuum in the U.S. civil aviation sector thus brightening the prospects of smaller airlines such as Spirit Airlines and JetBlue Airways who are more than eager to have a field day. The study said that such a trend will result in the fragmentation of the U.S. airline industry over the next decade. This is also surely to impact in the long term. The airline will stand to lose with decreased profit margins, while on the other hand the consumers stand to benefit vastly with a more competitive market.

According to the study, the United States has seen rather a quite strong air travel demand during the past 2 to 3 years. Despite such a huge demand, prominent carriers such as United Continental, Delta Air Lines and American Airlines are not appropriately responding to the current situation and instead have chosen to keep their capacity nearly flat, thus a tight supply situation has been created now. These three carriers reported increase in their passenger unit revenue by nearly 3 percent. The study said that the same trends have by and large continued in 2014 as well. These airlines have also installed more seats on each of their aircrafts but they are still not growing, the study pointed out.

The three airlines are currently revamping their aircrafts, and will require growing their fleets for increasing capacity after modifications are complete. However, there are absolutely no indications of any capacity increase whatsoever by these carriers. Delta Air Lines and United Continental have instead revealed that they will be limiting capacity increases below GDP growth rate in the foreseeable future. American Airlines also wants to follow cue and emulate these aircrafts as part of its long term plans.

The pitfalls of the legacy carriers have brought good days ahead for smaller airlines such as Spirit Airlines and JetBlue Airways. Presently, Spirit Airlines is having less than 2 percent share in the U.S. travel market. The airline wants to grow rapidly now and is planning to increase its capacity by 18 percent in 2014. Spirit Airlines has even bigger plans ahead for 2015 when it wants to increase its capacity by amazing 29 percent. With a fleet size of 54 aircrafts in 2013, the airline plans to grow the fleet size to 103 by the end of 2017.

JetBlue Airways is maintaining a slow pace in its growth and presently has nearly 5 percent share in the U.S. travel market. The airline is however acquiring 72 Airbus aircrafts between 2015 and 2019, and plans to increase its capacity tremendously.