In the last month we have one carrier declare bankruptcy and another threaten it. After 3 attempts to unsuccessfully raise fares, AA and CO have decided to cut supply to perhaps ARTIFICALLY raise demand and get higher fares. US Air after being permitted to buy and fly RJ''s now want to cut mainline service. But SW has now cut fares for last minute travelers from a maximum $399 to $299. And that fare cap was now matched by DL and AA (I assume others will follow).
So the current strategy for the majors'' profitability seems to be cut service, cede marketshare to low-fare carriers then match SW business fares.
-* I fail to see how this latest strategy is going to help the airlines become profitable.
-* NW seems content to do their own thing, not matching price increases and, as of yet, not cutting capacity. Has their unwillingness to play along been motivated by competitive pressures or is it more strategic (drive weaker carriers out of business)?
So the current strategy for the majors'' profitability seems to be cut service, cede marketshare to low-fare carriers then match SW business fares.
-* I fail to see how this latest strategy is going to help the airlines become profitable.
-* NW seems content to do their own thing, not matching price increases and, as of yet, not cutting capacity. Has their unwillingness to play along been motivated by competitive pressures or is it more strategic (drive weaker carriers out of business)?
