janders wrote:jayunited wrote:The only way we all will know which airline made the right decision in Q2 is by patiently waiting for each airlines Q2 report.
I am not sure looking at Q2 numbers would really prove which was better.
If United(or Delta for that matter) indeed had offered a much more aggressive schedule which means many more seats chasing a small number of customers, it could just mean an even more disastrous result, everyone including AA.
Pricing is not the primary driver of travel today, so demand is not elastic as it normally would be in defining the customer market size. Ultimately could just mean be even more seats chasing about the same number of passengers at rather crappy yields.
What United instead has done with its more limited capacity is actually being able to employ some yield management and not sell its seats at rock bottom prices, but instead seek to earn a bit of a premium compared to peers.
I agree. I don't think Q2 results will tell us who made the right decision here. At this point, it seems that UA and DL has burned a lot less cash than AA but has lost out market share. It's hard to say whether or not that's permanent loss of some ff. I've seen some praises of AA online. And part of AA's "success" has been the much quicker demand recovery in Texas, Arizona and Florida. They've been able to advertise a much larger schedule and run 25% schedule for June. So that has obviously helped their cash burn.
Things I think will be different in July/August. All ULCCs have brought a lot of capacity. Same with WN, B6 and AS. And legacies are doubling capacity also. At the same time, COVID infection is accelerating in those 3 states. We could very well see another crash in those markets with a lot of refund in July/August. And then you will have AA canceling last minute and burning cash from both operating more flights and cash refunds. You'd have LCCs flying empty planes to Florida. And Kirby could end up looking like a savant.