A legacy carrier, in the United States, is an airline that had established interstate routes by the time of the route liberalization which was permitted by the Airline Deregulation Act of 1978 and was thus directly affected by that act. It is distinct from a low-cost carrier (a term fostered as a form of disparagement against post-deregulation start-up air carriers, and the traditional airlines' once heavily unionized work groups), which in the United States are generally new airlines that were started to compete in the newly deregulated industry.
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Background
A typical characteristic of legacy carriers is that they usually provide higher quality services than a low-cost carrier; for example, a legacy carrier typically offers first class and business class seating, a frequent-flyer program, and exclusive airport lounges. Many legacy carriers are also members of an airline alliance through which they agree to provide these services to each other's passengers. Also, legacy carriers generally have better cabin services, such as meal service and in-flight entertainment. The term 'legacy carrier' isn't generally used outside the United States, but many other countries have long-established flag carriers which are owned by or often given preferential treatment by their national governments. These national airlines occupy a position roughly equivalent to the American legacy carriers regarding quality of service and membership in international alliances compared to newer low-cost carriers. None of the American legacy carriers is considered an official flag carrier of the United States.
Since the Deregulation Act, many legacy carriers have folded or merged with other carriers. Those that survived now benefit from the fact that low-cost carriers no longer hold large cost advantages over the major legacy carriers. There are currently three U.S.-based legacy carriers left that operate transcontinental and overseas route networks.
A trend among legacy carriers is to outsource short-haul and medium-haul flights to regional airlines. In 2011, 61% of all advertised flights by American, United, and Delta were operated by a regional airline. This figure was only 40% in 2000.
Transcontinental legacy carriers
Regional legacy carriers
Defunct legacy carriers
Through the mid-20th century, the "Big Four" domestic airlines were American, Eastern, TWA, and United. Additionally, Pan Am focused exclusively on international service and was the unofficial U.S. flag carrier. Many smaller airlines operated concurrently, and some grew into national airlines in the years surrounding the 1979 deregulation.
By the end of 1991, there were seven remaining transcontinental legacy carriers: American, Continental, Delta, Northwest, TWA, United, and USAir. These seven stood for a decade until TWA was incorporated into American. The remaining six stood for nearly another decade until three of them were respectively incorporated into the other three.