What is the approximate success rate of new airlines in the travel/tourism industry?
The number of airlines that start and remain in the hospitality industry (profit/loss not an issue, just the number of successful companies of the total companies that enter the industry)
I’ll just talk about the US here, since that’s what I know best.
From deregulation in the late 1970’s through 2000, there were a lot of failures of airlines that flew full-size jets, such as Western Pacific, Pro Air, KIWI, Tower, Midway (twice) and Air Florida. The Braniff name was resurrected a few times only to die again. People Express was merged into Continental as a last-ditch survival move. The only major airline that managed to survive (although I think it went through bankruptcy twice) is America West. Southwest Airlines was started before deregulation.
In the same period, Pan Am ceased to exist (after selling its routes to Delta, American and United) and Eastern also had a shotgun wedding with Continental. It wasn’t much of a merger as Eastern’s routes were quickly shed. There were other mergers such as Western and Delta, Republic and Northwest and PSA + Allegheny + Piedmont forming US Air. Again, some of these were mergers of necessity rather than well-thought out.
ATA (American Trans Air) was founded as a charter carrier in the 70s and became a scheduled carrier in the early 90s. They are still around and just out of bankruptcy.
AirTran was formed in the mid-90s but didn’t grow much until it merged with ValuJet. They have prospered recently. Jet Blue has made a big splash in the past few years and looks to be here to stay, although they are having some growing pains.
Recent failures include Trans Meridian, Legend, Southeast and National. These were all flying full-size jets but only a handful each. Offsetting these would be companies like USA 3000 and Pan Am (II) which are still flying.
So the success rate is probably less than 25% for flying full-sized jets.
In addition to these major airlines, there have been a raft of regional airlines that have formed and become feeders to the majors. It can get very confusing sorting out between those that were created or controlled by a major vs. those that were true independents. The most spectacular failure has been Independence Air, which survived for a long time as a regional feeder to United and others before losing those contracts. They converted themselves into a standalone business, expanded with a fleet of regional jets, and promptly went Chapter 7 (liquidation).
due to rising costs and stiff competition from existing airline giants like United…a fledgling airline is basically treading against the current, so in essence, the success rate is dismally low.
References :
I’ll just talk about the US here, since that’s what I know best.
From deregulation in the late 1970’s through 2000, there were a lot of failures of airlines that flew full-size jets, such as Western Pacific, Pro Air, KIWI, Tower, Midway (twice) and Air Florida. The Braniff name was resurrected a few times only to die again. People Express was merged into Continental as a last-ditch survival move. The only major airline that managed to survive (although I think it went through bankruptcy twice) is America West. Southwest Airlines was started before deregulation.
In the same period, Pan Am ceased to exist (after selling its routes to Delta, American and United) and Eastern also had a shotgun wedding with Continental. It wasn’t much of a merger as Eastern’s routes were quickly shed. There were other mergers such as Western and Delta, Republic and Northwest and PSA + Allegheny + Piedmont forming US Air. Again, some of these were mergers of necessity rather than well-thought out.
ATA (American Trans Air) was founded as a charter carrier in the 70s and became a scheduled carrier in the early 90s. They are still around and just out of bankruptcy.
AirTran was formed in the mid-90s but didn’t grow much until it merged with ValuJet. They have prospered recently. Jet Blue has made a big splash in the past few years and looks to be here to stay, although they are having some growing pains.
Recent failures include Trans Meridian, Legend, Southeast and National. These were all flying full-size jets but only a handful each. Offsetting these would be companies like USA 3000 and Pan Am (II) which are still flying.
So the success rate is probably less than 25% for flying full-sized jets.
In addition to these major airlines, there have been a raft of regional airlines that have formed and become feeders to the majors. It can get very confusing sorting out between those that were created or controlled by a major vs. those that were true independents. The most spectacular failure has been Independence Air, which survived for a long time as a regional feeder to United and others before losing those contracts. They converted themselves into a standalone business, expanded with a fleet of regional jets, and promptly went Chapter 7 (liquidation).
References :
Me and http://www.justplanes.com/AirlineHist.html