The big three US airlines are doing everything in their power to stop cheap fares. With the rise of low cost carriers like Southwest, JetBlue and Spirit Air, the big three scheduled airlines: United, American and Delta, have been under increasing pressure to compete on price. To a lesser degree, the scheduled airlines have tried to compete by offering cheap fares. Now the big 3 airlines have decided to reign in the cheap fares by restricting ticketing engines from pairing bargain, non-refundable segments when multiple cities are involved. What will this mean? Well a typical flight from Los Angelos to Chicago via San Francisco and returning might have cost $450. Now the same itinerary might cost $1200 (New Airfare Policy). Aside from the fact that this route is hardly more desirable, given that one has the inconvenience of the transit, but the customer has to pay for the privilege.
We’re predicting that the low cost carriers will continue to gain market share on the traditional big three airlines. If the American low cost carriers ever decide to become international, then the big three airlines will continue to play defense with respect to market share. It’s not unheard of. Southwest Airlines, Jet Blue, and Spirit Air already offer international flights within North America. Internationally, Ryanair, EasyJet, Air Asia, Jetstar, and Tiger Airways have become major regional players in their respective markets. Should the US low cost carriers follow these examples, the traditional three Airlines will continue to suffer accordingly.