GULLIVER tried an experiment the other day: he visited Kayak, a price-comparison website, plugged in some random dates in December, and looked for flights between New York and Berlin. The lowest fare that came up was a modest $387, with Norwegian Air Shuttle. The second-lowest fare was $419, also with Norwegian. After that came several flights combining legs on Norwegian and other airlines, including easyJet and Iceland’s WOW air, and a full itinerary on WOW. Only after scrolling through nearly two pages of results did the cheapest fare not involving one of these low-cost airlines appear: a $742 itinerary on Aer Lingus.

The lowest fare on an American airline didn’t show itself until page 19 of the results. That round-trip flight, with United, was selling for $2,123—more than five times the cheapest fare, with Norwegian.

That, to put it mildly, is a problem for American carriers. The big American airlines used to compete only with their European equivalents—the likes of Lufthansa, Air France and British Airways—on transatlantic flights. It was a reasonably friendly fight, since they co-operated through codeshare alliances. The...Continue reading