Buried in an article in the Dallas Morning News a couple of weeks back were some revealing comments from Donald Carty, CEO of American Airlines, regarding the 20% across the board capacity cuts that just about all the US airlines took after Sept. 11. What's interesting is that this guy wants antitrust immunity for his partnership with British Airways.
Who's cheating?
Cutting capacity
Many carriers have taken the same road to what they hope is financial salvation – they're cutting their capacity in response to fewer passengers flying. Fewer seats for sale can mean fuller airplanes and higher average fares eventually as the airline industry recovers from the terrorist attacks that devastated their business. However, the carriers are keeping a close and suspicious eye on one another as they shrink an average of 20 percent to make sure no one poaches their customers. They want to see equal sacrifice from everybody.
"Cutting capacity won't make sense if all the revenue on that capacity goes to another airline," Mr. Carty said. "That will be the trick, as to whether the industry has enough discipline to stick with it through the winter. I've never seen this industry cut capacity by 20 percent, so I'm reasonably hopeful."....
'Who's cheating?'
Mr. Carty said only three major carriers have cut their February schedules by 20 percent so far. It may be that the others haven't adjusted their schedules yet, Mr. Carty said. But it's something that each airline tracks, he said.
"The question as we go through November, December, January, February is: Who's cheating? Who's making the '20 percent' 19, 18, 17? I guarantee you, at every airline, every airline is watching it every day."...
