[magellan]

"It's called over-capacity."

Right. The airlines have already decreased capacity, but there is still overcapacity. But the capacity is not going empty. It is being sold. At too low of a fare.

A simple question: If Delta (and Nortwest and the rest), cut their capacity in half, and double their prices, what would be the effect on their economics?

A round-trip airfare between Atlanta and Washington D.C. is $145. A round-trip bus fare on Greyhound is $125. Does anyone really believe the value of a one and a half hour airplane trip is only $10 more each way than a sixteen and a half hour bus trip each way? That's 67 cents per hour for the extra time spent on the bus.

Airline management is simply incompetent. They cannot even price their product based on its value to their customers.

[safisoft]

A simple question: If Delta (and Nortwest and the rest), cut their capacity in half, and double their prices, what would be the effect on their economics?

Every airline employee in America has been asking this question for the past 5 years. We are always given the same answer, "Yield management will not allow us to reduce unit costs." It is the weirdest thing. In the old days, and airline was making money at 65% load. Now, at 85% they are losing the farm. They CLAIM that what changed was the Internet provides a view to the lowest cost, so that is all they can chase - lowest by one penny.

When we all work for Southwest or JetBlue, then the prices will climb < grin >