10/5/2010

AirTran's decision to sell itself to Southwest Airlines might show the basic business model of low-cost carriers has reached a tipping point, business travel columnist David Grossman writes. LCCs once enjoyed a cost advantage of about 8 cents per mile compared with network airlines, but higher fuel prices, greater complexity and increased competition have shaved the differential to 1 or 2 cents per mile. Such industry pressures could "spell the end of LCCs as we know them if more consolidate, join alliances or morph into something better resembling traditional network airlines," Grossman writes.

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