Posted on: Sunday, March 14, 2004

Major airlines losing ground in N.Y. market

By Marilyn Adams
USA Today

The world's largest air-travel market, New York, has emerged as the nation's biggest battleground in the war between discount airlines and powerful old-guard carriers that have long dominated the area's three big airports: John F. Kennedy, LaGuardia and Newark Liberty in New Jersey.

A growing number of travelers in the Big Apple are choosing low-fare carriers to slash ticket costs, sometimes sacrificing convenience.

At stake is $14 billion in annual revenue and control over some of the nation's busiest air routes. Giants such as American and Delta are pulling out all stops to fight back with low fares of their own and flier perks. After posting huge losses the past two years, they can't afford to lose their grip on New York.

Today, discounter JetBlue is the hometown airline. Its phenomenal growth at JFK airport and gains by other low-cost carriers at LaGuardia are serious threats to the traditional airlines.

Nearly 1 in 4 domestic passengers flying from New York's major airports uses a low-fare carrier, and that number is rising.

Low-fare airlines' market share of domestic passengers at all three New York airports was 22 percent in the July-September quarter of 2003, vs. 7 percent during that period in 1999, according to a USA Today analysis of Department of Transportation data. The market share of such traditional airlines as American, Continental and Delta dropped to 72 percent from 87 percent in the same four years.

"New York already is the biggest origination and destination air market in the world," says Bill DeCota, the Port Authority's aviation director. "The level of traffic expands dramatically with low-fare competition. Suddenly we have a market that's even bigger than we thought it was."