Airlines are adding capacity for cash flow reasons.
There is demand. There is not overcapacity. There IS
the ongoing cost differential between the LCC's and Legacy carriers.
We are seeing the same demand for air travel as we did pre-9/11--in fact, we should see more because of the rebound in the economy(despite the political rhetoric downplaying this).
The LCC's are experiencing a financial letdown because of the jump in fuel prices. The Legacies are continuing to hurt because of the jump in fuel prices AND
the fact that they are STILL 5-6 cents above the CASM for the LCC's while generally being forced to charge the same fares.
has much more cost cutting to do before they are in the clear. Tick, tick, tick... The race against time.
Their plan to generate a 30% revenue premium over the LCC's is looking suspect.TC