> What happens when you compete with low-prices, but are burdened by the high-cost structure of a legacy airline, such as Delta? Song was disbanded in 2006, after considerable losses.

Actually, Qantas in Australia did pretty with Jetstar. They avoided cannibalization of existing customers by running from non-mainstream airports, being a lot stricter with check-in times (trading time for money), having cheaper flight staff, and doing most of their businesses online.