Low-Cost Carriers Steal the Show

Low-cost carriers nabbed the spotlight in the second quarter, posting strong profits and surpassing earnings estimates, while the old hub-and-spoke airlines saw deep losses and struggled to right their businesses.

The quarter serves as a good indication of how low-cost carriers plan to make network carriers miserable down the road, by boosting capacity in rivals' key hubs and expanding into profitable markets.

"The network carriers are still losing millions, but at least they're heading in the right direction with costs ... But JetBlue (JBLU Quote) and other low-cost carriers came in gangbusters," said Prashanth Kuchibhotla, senior airline analyst at eCLIPSE Advisors. ...