Looking at the Top 25 carriers overall in the latest Top-Performing Airlines rankings, readers might be tempted to ask about the absence of the industry's “big names,” including airlines that seemingly have been around forever. And where, in particular, are the large U.S. and European legacy carriers, which are typically prominent players in the industry?

The smaller airlines (with revenues under $2 billion) constitute four of the Top Six airlines overall, and eight of the Top 15 (see overall rankings at AviationWeek.com/tparanking). Only three carriers from the large category (revenues greater than $6 billion) are in the Top 15, and one of those, Ryanair, with revenues of $6.36 billion, barely meets the category cut-off point. Interestingly, the other two large-category airlines are both based in Asia: ANA and Singapore.

Another surprising fact is that many of the top-rated carriers didn't exist as of 1970. Only two of this year's Top 10 airlines were extant in 1970, and only nine of the Top 25. Why 1970? The advent of the Boeing 747 marked the start of the widebody aircraft era. Subsequently, the first modern low-cost carrier (LCC) appeared on the scene in the form of Southwest Airlines, in 1971; and Singapore Airlines assumed its present identity (having previously been a part of Malaysia-Singapore Airlines) in 1972.

In addition, it is also noteworthy that none of the Top 10 airlines operate using a classic large hub-and-spoke system. Only Singapore, Turkish Airlines and Air China fit this description among the Top 20 overall, and the Turkish and Air China hubs are relatively recent developments in terms of airline history. Indeed, it is necessary to go down to the 22nd-ranked carrier, Lufthansa, before a true large legacy hub operator is encountered. And the highest-ranked U.S. legacy carrier? US Airways in the 29th spot. The best of the U.S. “Big Three”? Delta Air Lines, at No. 47. (In fairness, Southwest, ranked 28th, is not in the Top 25 either.)

It should be obvious from the results that longevity, large size and hub-and-spoke traffic flows are not necessarily guarantees of financial success in today's airline business. This is not to say that the three characteristics just cited necessarily cause failure; they do not. However, the newer/smaller/more nimble airlines generate better overall results than their older/larger/possibly less-nimble competitors.

This has relevance from both policy and investment perspectives. In the U.S. and Europe, “mega-mergers” have been approved in recent years creating giant airlines, or groupings of them, but as we see in reviewing the TPA results, this has not produced entities that outperform their smaller competitors. They may have become “too big to fail,” or, from a political perspective, too big to let fail, but to date, they have not demonstrated their inherent superiority as businesses, even with advantages such as restricted-entry international routes and, in much of the world, control of airport slots at important locations.

From a financial perspective, it is worth pointing out that in the U.S. market, the new mega-legacies all stem from recent application of the bankruptcy-protection process. Should investors, particularly in the equity sector, be concerned? Who can say this cannot happen again, or spread to other areas and markets?

There has been considerable discussion of the need for fewer, if any, restrictions on cross-border ownership (and control) of airlines. A related question should be whether it is better to continue with the existing cast of carriers, or to evaluate if key industry assets such as slots and route rights might be deployed in different, and possibly more economically effective, ways. This would mean that carriers would not necessarily continue to exist either as standalones or as part of mergers that simply combine both networks. While this would be painful for the stakeholders (shareholders, employees, debtholders) of those existing airlines that didn't make the cut, a better global airline system might result.

The concept of a more radical restructuring is worth consideration in a world that is both economically interdependent and which relies increasingly on air transportation for the effective functioning of the global economy. This is not a proposal to eliminate old and large carriers just because they possess those characteristics; after all, ANA, which fits both descriptions, is in the TPA's Top 10. What's needed is a more in-depth look at why the Top-Performing Airlines have managed to achieve this status, followed by an effort to see how the appropriate attributes of success can best be applied across the global airline business. The results could prove to be both interesting, and possibly, disconcerting.

Overall TPA Rankings, by total score, 2012
1 Allegiant Travel Co. 74.8
2 Regional Express Holdings 69.3
3 AirAsia 68.3
4 Copa Holdings 67.8
5 WestJet Airlines 64.4
6 Spirit Airlines 64.2
7 Ryanair Holdings 62.1
8 EasyJet 61.5
9 All Nippon Airways 61.0
10 Alaska Air Group 60.4
11 Air Arabia 58.6
12 Cebu Air 55.7
13 Singapore Airlines 55.2
14 IcelandAir Group 53.9
15 Vueling Airlines 52.0
16 Air New Zealand 51.5
17 Turk Hava Yollari 51.5
18 Hainan Airlines 51.1
19 Air China 50.9
20 Aer Lingus 50.7
21 Chorus-Jazz Air 49.9
22 Deutsche Lufthansa 49.2
23 Aeroflot Russian Airlines 48.3
24 Qantas Airways 47.1
25 Garuda Indonesia 46.6
26 EVA Airways 45.3
27 Grupo Aeromexico 45.0
28 Southwest Airlines 44.9
29 US Airways Group 44.5
30 Kenya Airways 44.3
31 China Airlines 44.0
32 SkyWest 43.4
33 Cathay Pacific Airways 42.8
34 Avianca Holdings 42.4
35 China Southern Airlines 42.4
36 Republic Airways 42.4
37 Shandong Airlines 42.2
38 Finnair 42.2
39 Hawaiian Holdings 41.6
40 Thai Airways 41.1
41 JetBlue Airways 41.1
42 Norwegian Air Shuttle 41.0
43 Transat A.T. 40.9
44 Air Canada 40.7
45 China Eastern Airlines 40.1
46 Virgin Australia 39.9
47 Delta Air Lines 39.6
48 Comair 39.2
49 Flybe Group 38.6
50 Aegean Airlines 38.5
51 Transasia Airways 37.5
52 United Continental Holdings 36.8
53 Tiger Airways Holdings 36.8
54 Air France-KLM 35.3
55 Latam Airlines Group 34.9
56 AMR Corp 34.9
57 Korean Air Lines 34.6
58 International Airlines Group 33.7
59 El Al Israel Airlines 32.6
60 Air Mauritius 31.9
61 TunisAir 31.5
62 SAS 30.7
63 Air Berlin 30.4
64 Malaysian Airline System 29.4
65 Asiana Airlines 27.4
66 Jet Airways (India) 25.0
67 PAL Holdings 22.8
68 GOL 17.2
69 SpiceJet 9.1
70 Pakistan International Airlines 8.2
71 Meridiana Fly 1.0