Home > Our Professionals > Jahan Alamzad > KPIX Interview Feb. 8, 2005

KPIX CBS 5 Eyewitness News

Tuesday, February 8, 2005, 4:34 pm US/Pacific

New Low-cost Airline Flying to Bay Area

By Len Ramirez



When Independence Air touches down for the first time in the Bay Area next May, it hopes to make a splash with customers.

The Dulles-based upstart airline plans to do that with super low fares like this one: San Jose to Washington, D.C. for $84 one-way.

Independence is making a major West Coast expansion, including San Francisco and San Jose, hoping the new routes will help the airline solve its current financial problems. But its joining what's become a crowded market of new and old names offering low fares and few frills."

Meantime, USAir and United are in bankruptcy and Delta could soon join them, while other large carriers like American and Northwest have been steadily loosing market share on the shorter routes to the low-cost airlines. Airline analyst Jahan Alamzad says the smaller airlines are the future of domestic air travel.

"At the moment, low-cost carriers have 25%," he said. "By the end of this decade, that number will be 50%, if not surpassing it."

Alamzad says older airlines have labor and parts-supply problems and outdated business models that make it hard to compete with their smaller, nimbler competitors.

"They have had for decades, a business model that entrenched them in certain types of operations that are extremely costly," he said.

But one thing the upstarts don't often have is a proven track record, and even today, for some travelers, choosing a no-name airline is still a leap of faith.