SRT,
The market will take care of any excess capacity in the normal way- its all about supply and demand.
To date demand has slightly outweighed supply with the domestic market growing by 55% over the last 4 years- the growth has been steady- with possible the exception of last year where the market grew over 17% in one year.SAA has shared in this growth as have the other carriers- however SAA no longer has the market power to drive players out the market- simply because the cost structure of the other carriers is lower than SAA's and therefore their propensity to survive a price war is so much better. Hence some fairly radical changes are going to be implimented in SAA to position the company to go forward. These plans will not involve more aircraft than the airline alrady has on the books but will look into the reduction of costs through a more relevant business model. Since SAA's load factors are at an all time high already and its competitiors are still in business- Im sure no one is going to drop out the market because of these changes. What SAA wants is to make more money out of the business it already owns- without increasing/decreasing the fares.
Whether the other airlines stay in business is more a function of how they run their own businesses- flying to places like BFN is not going to keep you in business for long.