Tuiflyer From United Kingdom, joined Jan 2008, 206 posts, RR: 0 Posted (7 years 9 months 3 weeks 5 hours ago) and read 2491 times:
The thread title pretty much says it, there are numerous sectors of the aviation industry where there is tremendous over-capacity particularly in the US and Europe and as fuel prices soar we are now starting to see the consequences of this as several airlines have dramatically collapsed and layes off thousands of workers. While airline failure and the massive job losses, travel chaos and financial depression it brings with it are bad things, surely the cut in capacity and the encouragement it gives to surviving carriers to cut costs and make operations more efficient are good for the industry we all love?
TVNWZ From United States of America, joined Feb 2006, 2605 posts, RR: 2
Reply 1, posted (7 years 9 months 3 weeks ago) and read 2423 times:
First, I do not believe there is over capacity--expecially in the US. Almost all airlines are recording record numbers of full planes. I travel about 125-K miles a year. For the last year almost all my flights have been completely full. At the least there have only been one or two seats free on the most open flights.
Furthermore, I do not believe any carrier will get to a stable position. As they reduce capacity, someone will jump in and be able to sell tickets for cheaper on routes where capacity has been reduced. Airtran/ValuJet, JetBlue, Virgin America, Spirit, Frontier, Allegiant, and others got into the business exploiting holes in the legacy's schedules/prices.
Airlines are a service business. There will always be someone offering it cheaper with everyone else having to cut costs to match the new competition and stay viable.