Six years ago, JP Morgan analysts predicted that low-cost carriers "will eventually inherit the Earth." It’s a big planet. But low-cost carriers are certainly taking an ever-larger share of the U.S. domestic market.

And while they might not yet be the masters of the universe that the financial gurus prophesied, a Travel Weekly analysis of Transportation Department data reveals that low-cost carriers continue to grab domestic market share as legacy airlines focus ever-greater attention on international routes.

Industry analysts predict that the shift to low-cost carriers should dominate the industry for some time, but especially for the duration of the Great Recession. As a result, they predict, passengers will benefit with lower base airfares while carriers struggle with lower yields.

"The LCCs have had an incredible impact in terms of costs and fares and at the same time are putting the fear of God in the legacy carriers’ hearts," analyst Darryl Jenkins of the aviation industry economic website the Airline Zone said of low-cost carriers.

In 2000, the major legacy carriers — Alaska, American, Continental, Delta, Northwest, US Airways and United — controlled about 89% of domestic traffic, compared with 11% for the low-cost airline group, which includes AirTran, JetBlue, Spirit and Southwest, according to revenue-passenger-mile data provided by the DOT.

Gradually but steadily, the low-cost carriers gained ground through the rest of the decade, with those airlines garnering 26% domestic market share by August of this year, the analysis shows.

The shift is a function of the low-cost carriers’ ability to jump into markets quickly with cheaper fares, according to analyst Vaughn Cordle of the AirlineForecasts consultancy.

The legacy carriers, he said, are losing the war of attrition: "They are losing the battle to those not burdened by the baggage of the past."

That excess baggage includes high debt and labor costs, he said. "After they emerged from bankruptcies, even though they had lower debt and lower labor costs, they still had overleveraged balanced sheets."

Low-cost carriers took advantage, and they grabbed market share.

"The net result," Cordle said, "has been lower fares."

Average fares have seesawed a bit over the past decade, but the gradual dip has been from $340.28 at the beginning of 2000 to $301.26 by the second half of this year.

But, Cordle argued, the drop has been much more dramatic when airfares are viewed in real terms, accounting for variables like inflation. He estimated that accounting for inflation, fares have dropped by a bit more than a third over the past decade and a half.

While airlines were able to secure higher fares to help them survive the 2008 oil price hike, the subsequent recession and accompanying drop in demand have led to deep discounts and fare promotions.

In that environment, many industry mavens now say, the low-cost carriers are likely to continue to grab market share.

"They can sustain better during a recession," said Bill Miller, senior vice president of the online travel company CheapOAir.

Southwest CEO Gary Kelly told Wall Street analysts in October, "The low-fare brand in particular is very, very strong."

Southwest is the unquestioned king of low-cost carriers, accounting for about 64% of the category’s traffic in the second half of this year, the DOT data show.

Kelly said the airline did not plan to change.

"We’ll be a low-fare, low-cost carrier that’s preeminent in the U.S., and we’ll have ample opportunities to grow our route map, not only in the U.S. but also in the near international markets," he told analysts.

But the current low-fare environment, coupled with the loss in business travelers due to the recession, has even some low-cost-airline executives concerned these days.

"Like other companies in our industry and elsewhere, our results were impacted by the effects of the economic recession," JetBlue CFO and Executive Vice President Edward Barnes told analysts in October. "Our total revenues declined by 5%, or $48 million, year over year, driven largely by the reduced demand for air travel, which has pressured fares."

This pressure on fares and yields has been particularly prickly for legacy carriers, which have higher cost structures to support. "They have to get more yield," Miller said.

So while low-cost carriers have been gaining ground in the overall domestic market, legacies have been focusing on other markets where they can get that higher yield.

"They concede some market share to the low-cost carriers because they make more money in other markets," Miller said.

Since the middle of this decade, many of those other markets for the legacies have been in the international arena, which low-cost airlines in the U.S. avoid for the most part.

Airlines increased their international traffic as a percentage of their overall traffic to 39% in 2008, from 32% in 2000, the DOT data show.

There is a dark side to that growth, however. When the recession spread around the globe, cutting especially deeply into international corporate travel, the legacy airlines’ increased reliance on those routes put them at greater risk.

"Our large Pacific presence has been particularly vulnerable in this recession," United President John Tague told analysts in October. "A high exposure to business and premium traffic made us more susceptible to reductions in corporate travel spending."

Legacy carriers take heart in fare increases that airlines have been able to impose in the latter part of this year and through the holidays, thanks to the capacity cutbacks most carriers have implemented to counter a recession-driven drop in demand.

But most analysts predict airfares will, on average, continue to stay low or even drop as the low-cost carriers continue to break into more markets and expand their geographic reach.

"Airlines, to a degree, have become commoditized," Miller said. "Consumers don’t understand airlines per se. They just want to get online and buy a product at a good price."