The airline industry has undergone major shift in its operations in the past five years. As of the end of 2005, the legacy or network airlines have reduced their capacity (measured by available seat-miles or ASMs), by 11.2 percent since 2000, while four network carriers, United Airlines, US Airways (twice), Delta Air Lines and Northwest Airlines, filed for bankruptcy. During the same period, low-cost carriers increased capacity 61.1 percent and accounted for nearly one-fifth of all passenger revenue-miles for the year ending 2005 – a 61 percent increase in low-cost carrier market share from 2000. Only one low-cost carrier, ATA Airlines, filed for bankruptcy
|Network Carriers||Low-Cost Carriers|
|Full-Time Equivalent Employees||−33.3%||22.4%|
|Number of Aircraft||−15.2%||41.9%|
|Mainline Passenger Revenue (excluding regional jet activity)||−$12.6 billion||$4.8 billion|
|2000||$77.2 bil||$10.2 billion|
|Operating Expense (excluding Fuel & Regional Contract Operations)||−$13.5 billion||$3.9 billion|
The following comparison of airline performance measures in 2000 and 2005 can be used to explore whether the network airlines’ have improved their operational efficiencies and employee productivity relative to the low-cost carriers during this period in which significant measures were taken to reduce costs by downsizing operations.