Low cost carriers own 30% of domestic airline biz, growing fast

Southwest (LUV), JetBlue (JBLU), AirTran (AAI) and others have grown rapidly, using an approach that keeps cost in check to deliver lower fares. In an industry that's always been price-drive, this is a winning strategy. And, in the worst recession in seven decades, it's even more effective. While Delta (DAL), United (UAUA) and other large carriers are struggling in today's economic climate, their smaller, cheaper and more nimble competitors are gobbling up consumers hearts and minds wallets.

Conventional airlines have had to cut flights and routes, pull out of cities and shrink their presences at hubs. Delta and US Airways (LCC), for example, are switching takeoff rights and other assets to boost Delta at LaGuardia Airport in New York and make US Airways more substantial at Reagan National Airport in Washington, D.C.

This major change has developed fairly quickly. In 1999, the low cost sector had only 10% of the domestic market: its share has tripled in size in only a decade.

There's more to the change than price. Some passengers are citing the availability of flights when prices are similar in both the low cost and full-service segments. Ten years ago, low cost airlines didn't have access to as many cities. Now, their reaches are broader, making it easier for passengers to turn to them as a first choice. And, the amenities cut by larger airlines mean that their offerings aren't all that different from their low cost competitors.