Abstract:
On March 4, 2003, AirTran Airways announced new non-stop service from Atlanta to Los Angeles. The routes were a major commitment for AirTran, and came at a time when the airline industry was in turmoil. The major airlines had lost a record $12 billion the previous year, and two were in bankruptcy. AirTran and two other low-cost carriers were the only sizeable airlines that were profitable, and all three were expanding rapidly. The stakes for the West Coast service increased when Jet Blue, one of the other low-cost carriers, announced it would start new service from Atlanta to Los Angeles and Delta, the incumbent on the route, announced that it would increase its non-stops from 5 to 13 per day.
Learning Objective:
This case is intended for use in courses on operations management or on transportation policy to compare the network strategies of the several low-cost carriers and the older incumbent carriers. It can also be used to discuss the evolution of the airline industry since deregulation in 1978.
