Originally Posted by
gloopy
I worry about a modified repeat of the LCC revolution of 2001-2010, especially with all this "capacity dicipline" and an AA tie up. If we really start to cull capacity, while the MBA spreadsheet guys are autoerotically actuarializing their paper gains on yields, the LCC's of the world will cut in line again and add between 8 and 15 seats for every 10 we cut...especially if it appears to be "working" with sky high yields. We will see another wave of AT/SW/JB/F9/NK and now VX expansion that will shred anything we hope to make by employing such a myopic quarter to quarter long term strategy. I hope our guys are smarter than that but we have serious reason to doubt most of them are.
The difference now from them is the route networks are totally different. DAL is at a point where further domestic cuts hurt the domestic route system, and as a result up-gauging and frequency pulldown will rule the day. It is also why in a few instances, better geographic hubs are need. UCAL has an issue with CLE. We have issue with four Midwestern Hubs, Two Western Hubs that are too close to each other; SLC and SEA(though not a base) and not having a hub in the South Central part of the US. MIA is also a key growth spot for DAL. This is the next phase of energizing the domestic route network to kill the ULCC's. (Ultra Low Cost Carriers)
If we fail to do it, yes, you could be correct and NKS could in fact take delivery of all 75 320's they ordered. Bad for us, and that is why on many levels AMR and these possibilities are important in the domestic realm. Do not even get me started on the wider game of imploding or greatly hurting one world.