A great time to fly, unless you're a major airline

"They really can't compete against low-cost carriers," says Rich Gritta, an aviation economist at the University of Portland, in Oregon. "For it to be possible, the unions have to be willing to cut back their demands major league, and management has to get their financial strategies in order."

Prof. Gritta notes that the low-cost carriers share of the market has gone from 16 percent last year to 25 percent this year, and some analysts are predicting they could account for as much as 40 percent of the market next year.

And with global competition forcing most American industry to compete for lower prices, business travel experts say their clients are now permanently sensitive to costs when they fly.

"The longer major network airlines delay in appreciating the new reality and accepting it, the more of the share they will loose to low-cost carriers," says Mr. Mitchell.

But other analysts are far more sanguine, contending that once the economy picks up steam those business travelers will be back in the high-priced seats, helping the major carriers to right themselves financially.

"For those people who are out there telling us that business travel has fundamentally changed forever, I say, 'No way!'" says Terry Trippler, an airline analyst for cheapseats.com. "I lived through the '70s when we were told we would 'never again' be able to turn our thermostats above 60 degrees, when were told we'd 'never again' be able to drive anything other than a Chevette because there would be no fuel for us. But look where we are today, you could put two Chevettes in the back of an SUV. It's cyclical, the business traveler will be back."

That said, Mr. Trippler contends that the majors' survival is also dependent on their ability to respond creatively to the increased competition from the low-cost carriers - so they can survive until that big-spending wingtip crowd does come back. He says that United, USAirways, and American have to come up with the kind of flexibility, team spirit, and penchant for penny pinching that have helped both Continental and Northwest weather recent turbulent years.

For instance, there's what Trippler calls the "battle for Philadelphia."

Southwest will come into the market this spring, giving USAirways stiff competition. USAirways plans to drop its prices the day Southwest boards its first plane. But Trippler wants to know why USAirways is waiting.

"Why doesn't USAirways drop its prices right now and hook those people before Southwest comes in? Why wait?" he says. "If you lower your prices now, by the time Southwest comes in their lower prices won't be a big deal. This is what I don't understand about the legacy carriers."

Other analysts contend that at least a few of the legacy network carriers may end up in bankruptcy, USAirways possibly for a second time, simply because it's the easiest way to go through the painful process of restructuring for the large carriers to survive.

"We know that none of the legacy network carriers can survive with their costs in their current form because they can't charge the prices it would take to cover those costs," says Michael E. Levine, an airline expert at Yale University Law School. "Most likely we'll see more of these guys in bankruptcy; what we don't know is whether they'll succeed in their reorganization or go on to liquidation. And to a considerable extent that will depend on their labor forces."

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