Originally Posted by
SHVC
There is an impending capacity war coming, I think July we will see this. Fares will drop to pre COVID levels the question is how low can the likes of Rex and Bonza go and be prepared to stay that low.
That is a concern for all. Bonza and Rex have an edge however, small fleets means flexibility when demand drops, they can intelligently cherry pick yielding routes and move where the gravy is. VA, QF and J* have large fleets with large overheads, if demand falls off a cliff they still have the large overheads but no income on the lower performing routes, with no way to redistribute the fleet as they are already covering the trunk ones to capacity. As seen in the US the large operators tend to hit the wall first in downturns as they have way too much capacity built up and wrung up debt very quickly with empty aircraft and leases to pay down.