seems to me as though they are "buying" market share at poor margins.
Its one of two options. Grab market share on the back of cash reserve and or outside finance, when a couple of competitors withdraw from the routes, or go bust, increase the margin. If the timing is right, they could come out the other end a bigger outfit with less competition and betters margins to pay of the loans.
Option two, is maintain margin and tough it out, being prepared to contract the size of the company as predators capture market share. Trouble is, as load factors drop, so does the profit while you sit and hope the competition have overcooked it and run out of money.
If I was an airline CEO (thank god I'm not), I'd be spending a lot of time hanging around my competitors dustbins, keeping an eye out for the waste paper and discarded computer disks.