Originally Posted by
seaav8tor
Since deregulation a significant amount of air travel was built on an elastic demand curve. For every price level, including ZERO, there is a finite number of passengers that will show up to fly. Finally, after 30 years, for the first time I'm going to give airline management credit. They are getting on the same page to shrink supply. It has never worked before due to competitors adding supply. This time, for the first time, they are all saying it together, "Supply must come down". The wild card remains new entrants.
If they are successful,
- Yield will go up
- Ticket prices will go up
- Load on ATC and the nations infrastructure will go down
- Carbon outputs will go down
- Delays will go down
- Pilot shortage, real or imagined will go away
- Pilot jobs will go away
In its current form the industry is unsustainable. Capacity cuts are the answer. If you are in the left seat a third or more up the list where you want to be and your airline makes it, this could be good. For everyone else, not so good.
Dead on. Another thing is...since all the majors are on board with this capacity constraint, it will be very difficult for new entrants to fill the void. In fact, almost impossible because it is a big void. Plus, with $90 oil, new entrants are not exactly coming out of the woodwork. It might just come together.