By David Field in Washington

Low-cost, low-fare carriers are driving airline industry growth globally and in the USA, where they are entering smaller markets and making inroads into territory long dominated by the legacy carriers.

Globally, the low-fares sector provided 16% of capacity in July - double its 8% share just five years earlier, according to OAG Worldwide's Mike Navin. In the USA, their market share is 26% - up from 18% five years ago.

Much of the US growth is driven by JetBlue Airways, which is taking delivery of a fleet of 100-seat Embraers that bring it into play in smaller cities. In June and July, JetBlue launched services in three new cities - Jacksonville, Pittsburgh and Charlotte, the latter two of which had been US Airways hubs and both of which had eagerly courted a low-fares player.

© Boeing 

Using both its Embraers and its Airbus A320s, JetBlue has begun new routes, including between Washington's Dulles and New York's JFK, between Burbank in California and both Las Vegas and Orlando, and between Boston and Buffalo, New York. The carrier has also announced a new service for Columbus, Ohio; Hobby Airport in Houston, Texas; and Tucson, Arizona, later in the year. These last three put it directly into Southwest Airlines territory.

JetBlue has also announced its seventh Florida destination, Sarasota/Bradenton, which brings it deeper into the most intensely competitive low-fares region in the USA.

At AirTran Airways, growth has been so strong that the carrier plans to hire about 3,500 extra staff over the next five years - a 45% increase in workforce. AirTran has also resumed its service to the hurricane-ravaged Mississippi Gulf coast with service to Gulfport and continues its build up at Boston Logan, which brings it into more head-to-head rivalry with JetBlue.

Meanwhile, low-fares pioneer Southwest is experimenting with changes to one of its hallmark features - its open seating. The 35-year-old carrier has never assigned seating but has given passengers boarding groups, usually three to an aircraft, based on when they check in. Southwest is now experimenting with several methods of assigning seating on flights originated at San Diego, but says it may not necessarily embrace any one method and in any case would make no decision before 2008.

Southwest also plans service from Washington Dulles airport later this year, its second move deeper into the legacy territory dominated by United Airlines after its entry into Denver earlier this year. Southwest said in July that it would serve Tampa, Orlando, Chicago Midway and Las Vegas from Dulles, starting in October.

Southwest also plans non-stops between its East Coast hub, Baltimore/Washington, and the main Detroit airport, a new route that will put it into direct competition with AirTran.

AirTran has accelerated delivery of its larger Boeing 737-700s, which supplement its original Boeing 717 fleet and give it access to longer-distance routes and larger markets. It will add 80 of the type over the next five years. ■

Source: Flight International