Market Share in NYC

In an unrelated story about United Airlines in the New York City area, some interesting statistics were noted by the Dallas Morning News.

The two SuperLegacy carriers, United Airlines and Delta, have 24.7% and 21.3% market share respectively.  No giant surprise but let’s look at what the next two airlines are in that market:

jetBlue:  13.3%

American Airlines:  12.3%

Yes, jetBlue beats AA in that market.  Let’s look at the next two airlines:

US Airways:  4.4%

Southwest:  2.8%

If we combined American Airlines, US Airways and Southwest in the NYC marketplace, we would have an airline with just 19.5% share of the market.  Still less than Delta and still considerably less than United.

And be mindful of the fact that SWA isn’t even considered a player in the NYC market as they’ve been unable to obtain gates or additional landing slots at the airports.

Care to guess who comes after Southwest?  That would be British Airways and Air Canada.  Yes, two foreign carriers are next in line with shares of 1.4% and 1.2% respectively.

On the tail end are Spirit and Virgin America with about 1% of the market each.

So when we talk about how there is an imbalance in the marketplace, let’s be mindful of the fact that the top two largest airlines (United and Delta) combine to own nearly 50% of one of the most competitive markets in the world.

And if you combined both AA and US Airways, they would still be at a significant disadvantage with just 16.7% of the NYC market.

I don’t disagree that the combination’s dominance in Washington D.C. should require divestiture of slots by those two airlines.

But the economic pricing power that the two SuperLegacy airlines have today are so great that they will gain more share over time rather than less with the current market conditions.  More of that market share means even more pricing power which means even greater increases in air fares.

But, hey, far be it for me to introduce rational thought in the US Airways / AA merger argument.

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