Smaller U.S. airlines poised for success in 2003 CHICAGO (Reuters) =97 Smaller U.S. airlines fared better financially than=20 larger rivals in 2002 and are poised for strong performance this year,=20 thanks to their low costs, low fares and niche business models. While the=20 near-term outlook for the U.S. airline industry is murky due to weak demand= =20 for air travel, high jet fuel prices and a potential war with Iraq,=20 low-cost carriers such as Southwest Airlines, JetBlue Airways and AirTran=20 Holdings have all reported profits. The low-cost carriers have an enviable= =20 position that larger competitors =97 which are bleeding losses and= struggling=20 to stay out of bankruptcy court =97 are seeking to emulate. Delta Air Lines,= =20 the No. 3 U.S. airline, said on Wednesday it will launch a new low-fare=20 airline with some of the key features and routes that have helped JetBlue=20 outperform other carriers. Delta hopes the low-fare unit, named Song, will= =20 help it capture passengers who have ditched it for its less expensive=20 rivals. Bankrupt UAL's United Airlines is also seeking to reclaim some of=20 the low-fare business that has chipped away at its market share. The No. 2= =20 U.S. airline, under pressure to give details on how it will emerge from=20 bankruptcy as a strong competitor, has said a low-cost carrier is a=20 critical element to its future. United executives are expected to discuss=20 details on the unnamed low-cost unit =97 part of its overall restructuring= =20 plan =97 at a Thursday board meeting. It was not clear when those details=20 would be released publicly and already two union work groups, the pilots=20 and flight attendants, are critical. MORE GROWTH AHEAD Discount carrier JetBlue Airways on Thursday reported an increase in its=20 quarterly net profit and said it expected to grow another 50% this year in= =20 available seats. New York-based JetBlue beat Wall Street estimates with a=20 fourth-quarter profit of $15.2 million, or 22 cents a share, compared with= =20 a profit of $11.1 million, or 20 cents a share, a year earlier. JetBlue=20 said its revenue skyrocketed 96%, while its rivals battle a weak revenue=20 environment. JetBlue is able to keep costs in check primarily because it=20 uses only one Airbus jet model and its labor costs are low. "In a weak=20 commercial aviation environment, these numbers are extraordinary," Ray=20 Neidl, airline analyst at Blaylock & Partners said of JetBlue's results.=20 However, another analyst, Susan Donofrio of Deutsche Bank, reiterated a=20 hold on JetBlue saying its competitive gains were already largely priced=20 into the stock.Orlando-based discount carrier AirTran, which also reported= =20 a quarterly and full-year profit this week, said it has seen bookings reach= =20 their best levels since before the Sept. 11 attacks and predicted a 2003=20 profit. Southwest, the leader among low-cost carriers and the No. 7 U.S.=20 airline, reported a quarterly and full-year profit last week. It has some=20 of the lowest costs and highest worker productivity in the industry and is= =20 expecting capacity to grow about 4 to 5% next year. TOUGH OPERATING ENVIRONMENT Although Alaska Air Group on Thursday reported a wider fourth-quarter loss,= =20 revenue rose as the small Seattle-based carrier expanded service to a=20 handful of new U.S. cities. The parent of No. 9 U.S. carrier Alaska=20 Airlines and regional carrier Horizon Air said it lost $43.1 million in the= =20 quarter, or $1.62 per share, vs. a restated loss of $37.4 million, or $1.41= =20 per share, in the fourth quarter of 2001. But Alaska Air said it planned to= =20 add planes and increase capacity this year while its larger opponents are=20 parking planes and cutting back on routes. Chief Executive John Kelly said= =20 he planned to rethink some of the carrier's processes in order to achieve=20 aggressive cost cuts over the new few years. "They continue to have a=20 strong financial position to help see them through what could be a tough=20 operating environment going forward," Peter Jacobs, airline and aerospace=20 analyst at Seattle-based brokerage house Ragen Mackenzie, said of Alaska's= =20 results. "They could be somewhere in the break-even area for 2003. All=20 things considered, that's much better than some of their peers." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: www.pichemas.com TnT Webdirectory: http://search.co.tt *********************************************************