Air Transport World

Carving up the California corridor. (Los Angeles - San Francisco Bay route competition) (Marketing)

Pandora's box was nothing. For true chaos, take eight airports with total enplanements of roughly 50 million passengers per year, split them up between two of the nation's major population areas roughly 350 mi. apart, add in about 5 million passengers per year who want to fly between those two areas. Throw in nine airlines and take away all the constraints on fares. That's chaos.

That's also the California corridor.

However, slowly but surely, the airlines are starting to sort out some form of order through carving niche marketing and/or through concentrating at specific airports.

The California corridor is defined as the 15 routes connecting five airports in the Los Angeles Basin with three in the San Francisco Bay Area. The Basin area airports consist of Los Angeles International (LAX), Long Beach (LGB), Orange County/John Wayne (SNA), Burbank BUR and Ontario (ONT). The Bay Area airports are San Francisco International (SFO), Oakland (OAK) and San Jose (SJC). Of the 15 routes involved, 10 are ranked in the top 250 U.S. markets.

While there has been competition in the corridor since 1928, the real battles date only to the beginning of deregulation in 1978. Airlines large and small started filling the corridor, each trying to get its share of the market. By 1985, 11 airlines were providing 350 daily flights between the two areas.

All were not equal, however. There were really only three key players, with Pacific Southwest Airlines (PSA) and AirCal as the leaders, and United a distant third. The rest were only minor players.

PSA was the biggest and noted as the zany airline, "the airline with a smile." its flight attendants adlibbed flight announcements, joked with passengers during the flights and wore hot pants. it was a fun airline. it also was flying 190 of the 350 daily flights in the corridor and claimed to have more than half of the passengers.

AirCal was the more serious but just barely. It also got a slower start in the corridor, having a 35% share of the market, compared with 38% held by PSA. United was back at about 17%.

At that point, life was still fairly simple. Fares were moderate but holding steady and fuel was relatively inexpensive. And while some competitive discounting was in force on the LAX-SFO route, no major fare wars were going on throughout the corridor.

Early in 1986, however, American Airlines started to look at the Los Angeles-San Francisco corridor as a natural extension of its service into LAX. …

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