Quote:
Originally Posted by F15Cricket
I don't know if the majors have learned how to make money through capacity discipline. How much would DAL make this year if they had not flushed your pension? Very little, I would speculate (but am honestly asking). So, in other words, if all the majors had kept their financial obligations, they would either not be profitable or only slightly profitable with today's low oil prices. That may be why they are losing capacity discipline again, because they feel they now "know how to make money" ... And yet are starting to prove they don't.
What's really going on is the endless growth capacity dumpers aren't playing along. The profits you speak of, that are largely the result of industry capacity dicipline, are their motivation to grow into it, hoping the legacies continue to gift them more and more. They all think they can grow at or near double digits while poaching legacy marketshare and there's nothing anyone can do about it. They are about to find out they are wrong.
And its funny how some at airlines that pay less (including less retirement money per pilot) like to get on their high horse about how the evil legacies unfairly lowered their pilot costs in bankruptcy, even though they still have higher pilot costs than the ones making the accusations.
As for the legacies "losing capacity dicipline" they are mostly transferring connection capacity to mainline. The rest is merely regaining a small portion of the capacity that was shed both after 9-11 as well as during the initial waves of the recent mergers.
That's nothing though. We're heading for some brutal capacity/yield wars in the not too distant future.