Contrary to legacy airline management belief, you cannot lose $100 per ticket sold and make it up in volume.
Right now, on Orbitz, a round trip ticket from Atlanta to D.C. is about $145. To rent a car for two days and drive there and back would cost about $230 ($50/day for the car, 30 mpg, and $3/gal for gas) and take sixteen additional hours (another $210 at the average salary after taxes). For a family of four going on vacation, an increase in airline ticket price would probably cause one to drive. But for the typical business customer, the ticket price could double and it would still be cheaper to fly.
It is better to have a smaller customer base and be profitable, than have a larger customer base and loose money. This is the secret of Southwest Airlines and other so-called low cost carriers.
For Delta, the world will not end if they have only 25 roundtrips per day between Atlanta and New York instead of 36 round trips. Unfortunately, as a result of Chapter 11, they will end up with fewer round trips than before, but at a lower average fare price than before, only making the situation worse.
The entire American airline industry is a house of cards, and somebody at the table is about to sneeze. Southwest is depending on fuel hedging which is always a temporary measure. Soon their fuel costs will double. JetBlue is financed by Airbus Industries deferred payments, which will come due soon. The legacy carriers will use bankruptcy to eliminate their pension obligations. They already have cut their labor costs below the low cost carriers (U.S. Airways has the lowest operating costs of any American carrier. Southwest airlines has the highest paid pilots of any U.S. passenger carrier).
In short, the playing field is about to be leveled. At that point, expect the next carriers facing problems to be Southwest and JetBlue.
The solution to airline problems will only come when they charge a fair price for their product based on the cost of the goods sold, and the value of the product given those costs. While that may result in a smaller traveling public, and a smaller airline industry, it will be a healthier airline industry, which is better for the traveling public.
I think part of the problem is that Delta has all of those planes, employees, and slots. I don't know that reducing the number of daily flight from ATL to IAD will result in better coverage of fixed costs. It isn't a matter of losing $100/ticket but making it up on volume. Businesses must do their best, in the short run, of covering their fixed costs.
I agree that there are huge changes coming in the industry, and I have no idea where we'll end up.