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The new low-fare carriers are obsessed with keeping costs down and treating customers well. They work hardest at employee relations, aware that labor troubles have helped sink several major airlines. The low-fare airlines shun extravagances, from linen napkins to fancy airport lounges. In contrast to some major airline CEOs, who pocketed hefty compensation packages even as their airlines were losing billions of dollars, executives at low-fare airlines are out helping load bags when necessary and are tying their pay to their firms' performance. The small airlines have also done away with or reduced the traditional charges for changing tickets or checking extra baggage--all part of the pitch that they're grateful to have your business.
A big ally for the little guys is the Internet, which has illuminated the murky world of ticket pricing and has shifted power to the consumer and a cost advantage to technologically adept newcomers. The Internet has helped these carriers sharply cut distribution expenses and has also helped in advertising. "The Internet gives us a place in the storefront window," says Sean Menke, head of marketing for Frontier. "And for the price-sensitive customer, we'll benefit every time we go up against a major carrier."
The niche airlines' low-hassle style of flying has also set them apart. Especially since 9/11, travel through big, crowded airports has been a challenge. Smaller airlines gain an advantage by flying direct and often using less congested secondary airports, like the one in Long Beach, Calif., where JetBlue, based at New York City's John F. Kennedy International Airport, has established a big presence. Spirit, based in Miramar, Fla., uses Fort Lauderdale instead of Miami International Airport.
The niche carriers are also nimbler. When US Airways made the surprising move after 9/11 to shut down MetroJet, its low-cost subsidiary based at Baltimore/Washington International Airport, AirTran, with headquarters in Orlando, Fla., moved into that airport within weeks. It has now built a successful mini-hub there, with 22 flights a day. The low fares have been a boon to these once obscure airports: Midway Airport in Chicago--which is served by AirTran, ATA, Frontier and Southwest--now offers 22% of all U.S. flights from Chicago, up from 14% in 1997. And while many major carriers have cut flights, departures from Midway have grown 16% since 2001.
The small airlines are trying to prove that flying can be enjoyable again. JetBlue offers 24 free channels of LiveTV. Delta's low-fare Song subsidiary promises it will have pay-per-view movies and MP3 players by October. AirTran lets you upgrade to business class for only $35 above full coach fares and gives you Mrs. Fields cookies. Hooters Air's hostesses orchestrate humorous in-flight quizzes and pass out free hats and T shirts. "We're just trying to bring a bit of fun back to flying," says Mark Peterson, chief operating officer of Hooters. "It doesn't have to be so serious."