legacy carrier

Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business

by John Newhouse  · 16 Jan 2007  · 278pp  · 83,504 words

utility gave way to free market economics. Predictably, the industry’s irrational tendencies took over, and it quickly outgrew itself. By the late 1980s, the legacy carriers—the half-dozen major carriers that have been around longer than most of the others and operate both nationally and internationally—had embarked on a

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lifted all boats, even the airline industry. Between 1995 and 1999 it generated a net profit of more than $20 billion. The profit margins of legacy carriers were ranging between 7 percent and 10 percent. But cautionary sounds began to be heard. In 1996, Michael Levine, executive vice president of Northwest Airlines

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cost didn’t seem to matter much. But then, as the dot-com bubble vented, the economy’s hyper-growth phase shut down. For the legacy carriers, the timing could not have been worse. Raising business-class and other fares coincided with the growth of low-cost airlines and the greater transparency

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years U.S. airlines cut capital spending by 62 percent while taking on $16 billion of new debt to cover losses.12 Since 2000, the legacy carriers have eliminated more than one hundred cities from their schedules, although regional airlines now operate many of the routes. The ripple effect of serious and

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, executive director of the Tampa International Airport (which is probably as well organized and designed as any airport anywhere), “The financial instability of the six legacy carriers represents the single biggest problem for airports. The airports get no public money and are fully self-supporting. Tampa Airport takes in $170 million per

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, they are widely regarded as the world’s most overpaid high-end technicians. During the worst downturn in the U.S. airline industry’s history, legacy carriers were pressed hard by pilots to award or sustain contracts that were probably not sustainable. These contracts could hasten the collapse of some carriers, and

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the jobs from which so many of their pilots have prospered. Relations between the senior management of legacy carriers and the pilots’ union—the Air Line Pilots Association (known as ALPA)—have worsened since deregulation. Some industry analysts argue that the pilots are largely

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to blame. Oddly, the salaries of those who fly for the legacy carriers, besides being too high, are based on the size—actually, the weight—of the aircraft they fly. Hence, a pilot who normally flies a four

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true that among airline chiefs Crandall led the way in buying too many airplanes during cyclical upturns. Entering Chapter 11 bankruptcy proceedings does offer enfeebled legacy carriers a weapon of sorts with which they can even the playing field. Section 113 of the bankruptcy code gives executives the power to tear up

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Delta’s much lower, much simpler fare structure with an equally radical new approach to paring costs; but even with their survival at stake, the legacy carriers probably won’t shrink their cost structure enough—enough, that is, to allow them to adopt the low-cost model and compete on even terms

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and yet these companies were in a financial free fall. It’s probably only a matter of time before some or all of the six legacy carriers make their exit. Whether any of them can survive will depend on events. One or more of them might find solid ground by upgrading service

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thereby become an even stronger and more erosive force. THE SKIRMISHING between pilots and management over salaries and pensions obscures a large hidden cost to legacy carriers in the form of union work rules that prevent people from doing jobs that they are not specifically authorized to perform. A pilot may not

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connecting with growth organizations that will make it and possibly flourish. The absence of rigid work rules gives the LCCs a big advantage over the legacy carriers. Flight attendants working for some LCCs routinely clean the airplanes between flights so that turnaround time can be shortened and the expense of using cabin

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. Southwest was always open to the presence of unions, partly because of the congenial environment it had created. One or more persons employed by a legacy carrier might have a complaint that would oblige their union to file a grievance. A union involved with Southwest could do that, too, but thus far

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wouldn’t have had to. The difference is attitude. The LCCs are not saddled with the traditional defined benefit plans that oppress the legacy carriers. Instead they offer 401(k)’s with company matches and profit sharing. Southwest provides stock option plans that at first were available only to management

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success of Southwest and JetBlue has been the simplicity of operating one kind of airplane. That business model keeps maintenance and training costs low. The legacy carriers fly mixed fleets, and some of them even operate different engine types on the same airplane. Southwest operates only Boeing 737’s, and JetBlue uses

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reasons, increasingly in favor with low-cost carriers. That is important, because those carriers, plus various leasing companies, are buying the new airplanes. The strapped legacy carriers are buying very little new equipment. Instead, some of them are cutting back. Well before reforming its fare structure, Delta decided to delay the delivery

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by 10 percent without adding further employee head count.32 The announcement coincided with news that, because of rising fuel prices, four of the six legacy carriers were planning to freeze or reduce the number of seats on domestic flights, even though the planes were generally flying full.33 Some of the

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JetBlue appeared to be Song’s role model, its revenue per passenger seat mile remained well below JetBlue’s. Its cost structure resembled Delta’s. Legacy carriers seem unwilling to accept that the cost advantage of JetBlue and Southwest is based on much more than not serving hot meals. Hubert Horan, an

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McKinzie sold the Song and Ted projects to Delta and United even after other similar experiments, also inspired by McKinzie, had been tried unsuccessfully. The legacy carriers hope, and some of them seem to believe, that the leaner cost structures of the LCCs will over time mature and level the playing field

Palo Alto: A History of California, Capitalism, and the World

by Malcolm Harris  · 14 Feb 2023  · 864pp  · 272,918 words

or overlooked signs that the company was overloading its fast-growing delivery network while eschewing the expansive sort of training and oversight provided by a legacy carrier like UPS,” Callahan’s team found.43 One early casualty of Amazon’s delivery system was Joy Covey, the firm’s first chief financial officer

The Virgin Way: Everything I Know About Leadership

by Richard Branson  · 8 Sep 2014  · 315pp  · 99,065 words

for twelve years) was probably going to come from within the airline. Again, though, like in Australia, we opted to take someone from a big legacy carrier – it wasn’t the first time we went fishing at American, having hired David Cush from there to head up Virgin America some years earlier

Capitalism and Its Critics: A History: From the Industrial Revolution to AI

by John Cassidy  · 12 May 2025  · 774pp  · 238,244 words

. These reforms revolutionized the airline industry, opening the way to an era of cheaper fares, discount airlines, crowded planes, and wage cuts for workers at legacy carriers. The philosophy behind airline deregulation was encapsulated in a remark of Breyer’s: “Why regulate something if it can be done better by the market

Why Nothing Works: Who Killed Progress--And How to Bring It Back

by Marc J Dunkelman  · 17 Feb 2025  · 454pp  · 134,799 words

, the public would have been better served by reforming rather than eviscerating the CAB. Over time, as upstart competitors began to serve the routes the legacy carriers had once dominated and unionized employee benefits were pared down to be much less generous, some began to wax poetic for the old regime. A

Cockpit Confidential: Everything You Need to Know About Air Travel: Questions, Answers, and Reflections

by Patrick Smith  · 6 May 2013  · 309pp  · 100,573 words

regional was once assumed to be temporary. It was a job one took before—fingers crossed—moving on to a more lucrative slot with a legacy carrier. This progression was never guaranteed, but if nothing else, it served as a carrot that kept a supply of young, talented, and highly motivated pilots

Quality Investing: Owning the Best Companies for the Long Term

by Torkell T. Eide, Lawrence A. Cunningham and Patrick Hargreaves  · 5 Jan 2016  · 178pp  · 52,637 words

structural burdens such as pension benefits. Similarly, Ryanair has begun to encroach into primary airports and business travel, to an extent replacing Europe’s retrenching legacy carriers. Ryanair’s cultural embrace of low-cost operation yields margins and returns on capital unrivalled in the industry. It boasts steady and substantial earnings growth

Dead Companies Walking

by Scott Fearon  · 10 Nov 2014  · 232pp  · 71,965 words

of another. “Here’s a sandwich, okay? Only it’s not a sandwich. It’s the airline industry. The top slice of bread is the legacy carriers, American, United, Pan Am, those guys. Now, everybody knows their prices are outrageous. They’re way, way overpriced because they’ve got high labor costs

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itself to stay alive. His methods were drastic. But they were necessary. And just as he predicted that summer afternoon in his office, the other legacy carriers have been forced to adopt them. In the thirty years since Lorenzo willingly took Continental into bankruptcy, every single major US airline except Southwest has

Hedge Fund Market Wizards

by Jack D. Schwager  · 24 Apr 2012  · 272pp  · 19,172 words

. Regulation fostered the proliferation of airlines because prices were protected, and it also resulted in very high cost structures. When the airlines were deregulated, the legacy carriers, who had very high cost structures, had to compete with newcomers, such as Southwest Airlines, who had a much lower cost structure because they had