U.S. skies may grow crowded with discount airlines NEW YORK (Reuters) =97 Airline passengers are on the prowl for good deals,= =20 but with a handful of U.S. carriers seeking to enter the discount market,=20 even the cheap seats may prove tough to fill. Unless the discount airlines= =20 can find ways to stand out from the crowd, experts predict they might blur= =20 together in passengers' minds, and some might ultimately be doomed. "The=20 effective way to compete strategically is to position yourself=20 differently," said Roland Rust, a professor at the University of Maryland's= =20 business school in College Park. "When Southwest came along, it cleaned up= =20 because it had no competition," he said. "The problem is that if everybody= =20 (now) does that, you're entering a 'me-too' environment." Bankrupt UAL's=20 United Airlines, Delta Air Lines and Midwest Express have unveiled plans to= =20 start low-fare carriers to compete with rivals that have gobbled up market= =20 share. AMR Corp.'s American Airlines Inc. also has said it was mulling the= =20 idea. But experts worry that even if more travelers buy cheap tickets, the= =20 new discounters might cannibalize each other's sales or fall short of=20 Southwest, JetBlue Airways and AirTran Airways. Joseph Schwieterman, a=20 professor and transportation expert at DePaul University in Chicago,=20 expects less than 4 percent annual passenger mileage growth through 2010.=20 "Existing discount airlines are already expanding, and that limits the=20 opportunities for new start-up airlines to quickly carve a niche," he said. PAYING PEANUTS Delta's low-fare subsidiary, called Song, and United and Midwest Express'=20 concepts =97 as yet unnamed =97 face a daunting challenge. The history of= large=20 U.S. airlines forming low-fare units is littered with the carcasses of=20 Continental Airlines Inc.'s Continental Lite, bankrupt US Airways Group=20 Inc.'s MetroJet and United's own Shuttle by United, which was scrapped=20 after Sept. 11. But with passengers weary of tight security, hub airport=20 bottlenecks, bad food and skimpy legroom, airlines are recognizing that=20 more travelers now insist on paying peanuts =97 even if they will not get= any=20 once on board. "The customer base is furious (and) trying budget carriers=20 in increasing numbers because the majors are not delivering=20 price-for-performance on almost any dimension," said Robert Lamb, a=20 professor at New York University's business school and expert on airline=20 strategies. By 2005, more than twice as many American and European=20 travelers =97 or about 40 percent of them =97 might be flying low-cost=20 carriers, Lamb said. Michael Boyd, an airline consultant in Evergreen,=20 Colorado, said the low-cost model works best only in big markets where=20 airlines schedule many flights with quick turnarounds. "The low-fare model= =20 can't be expanded ad infinitum," Boyd said. "If everyone were like=20 Southwest, 75% of the United States wouldn't be served." An abundance of=20 low-fare carriers and dearth of premium service might also turn off=20 business or leisure travelers willing to pay extra for perks. "Airlines are= =20 being very foolish," Rust said. "Someone, eventually, is going to have the= =20 guts to counterposition against this trend and be the 'high-service'=20 airline, charging a little bit more." BIG CHALLENGE Analysts have said United could have a tougher time than rivals in=20 launching its low-fare unit, particularly because it will compete on some=20 routes with United's mainline service.Southwest Chief Executive Jim Parker= =20 said Delta's Song might succeed but would not threaten Southwest, while=20 United's carrier might struggle. "It is certainly a big challenge to try to= =20 manage two cultures within a single company, to manage two sets of customer= =20 expectations," he said.Schwieterman, however, was more optimistic about=20 United's plan because of its broad route network and ability to negotiate=20 lower labor costs through the bankruptcy process.Low-fare travel does not=20 have to mean bare-bones and still leaves room for experimentation, experts= =20 said. Midwest Express, known for serving meals on real china, said its discount=20 carrier will not do the same but will still offer its signature fresh-baked= =20 cookies.Yet cookies alone will not ensure success for the new discount=20 airlines, NYU's Lamb said. "It can work if the unions and the government effectively allow a two-tier= =20 strategy, you subsect the market and you choose your shots," Lamb said. "If= =20 everyone goes head-to-head, everyone loses." *************************************************** 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: http://www.dbombo.net/muddyangels/ TnT Webdirectory: http://search.co.tt *********************************************************