To achieve higher yields, airlines like BA, LH, KL, AF, DL, AA, UA will have to cut frequency and capacity. The money they have in the bank is not to fly empty planes but to keep empty planes parked. I don't really understand what you are arguing about.
You don’t really seem to understand that the airlines are not all shrinking to the same size.
Yes BA has higher fix costs, but they are not shrinking down to 30-whatever planes. Post-covid they will be smaller than before, but still a lot larger than VS. That means they can earn more revenue to cover the higher costs. VS is shrinking to 30 whatever planes because of their current size, not because that is some optimal number that all airlines should be at and all the market will support post-covid.
Owned planes are cheap to park (essentially you are just paying storage fees) and cheap to get rid of if necessary.
Nobody is arguing that BA will be bigger than VS. That's the whole point. BA will retire the planes it owns and it will still be left to pay for the planes it cannot retire nor can profitably fly. In the next 2-3 years, BA and all of the big carriers are going to be stuck with more planes than they can profitably fly. This should be pretty obvious.
Your point is not at all obvious. There have been plenty of excellent thoughts given already, but they all boil down to just one:
And have you ever considered economies of scale?
VS will have fewer revenue-earning opportunities than BA due to BA's larger fleet.
The list of destinations served plus the frequency offered matters now as well as later this year.
At a certain level of demand, BA will deploy the appropriate sized aircraft on a frequency to match. The numbers will be awful, but that is revenue to offset against the losses being incurred.
With such a small fleet of large aircraft and restricted to no more than a couple of rotations in a day, VS are much more limited in what they can do.
There comes a point where size really does matter.
For instance, looking into the data (if it is correct), VS has 67% of its fleet (28 frames) leased from 10 lessors. The only lessor to have exposure of more than 5 frames with VS is AerCap with 8.
Worse still for VS, is that the entire A330 fleet and 5 of the 7 B747 fleet are leased. These are the thirsty aircraft that they would prefer to keep parked up (as they currently are) and not having to pay leases on them, rather than operate long-haul. Yes, price of oil is way down, but how much is being purchased at previously hedged prices?
Compare this to BA. 53% of its fleet (146 frames) is leased from 22 lessors. 5 lessors are exposed with > 10 frames with BA. BBAM has ~40 and Itochu ~20.
None of the B747s and only 6 of the B777-200s are leased. That's 67 older, thirstier and outright owned aircraft that are not needed if the economics don't stack up. The newer, more efficient and leased 77Ws, 787s and A350s could be the bulk of the flying long-haul fleet for the rest of the year.
What's the old saying? If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
I expect BA to be able to renegotiate more favourable lease terms given the numbers of aircraft involved, whereas VS would appear to be in a less commanding position.