cfii2007
New Member
Guys we don't need reregulation. The airlines were making decent profits the past couple years. Oil prices screwed that up. Due to the increase in oil price it means ticket prices will have to go up to make money.
Ticket prices can't go up right now because there is too much competition and too much capacity. Not everyone that flies now will be able to afford to fly when ticket prices to go up to the appropriate level.
It will be a "survivor of the fittest" battle. Capacity will be reduced by mergers AND/OR airline failures. Whoever is left will be able to raise ticket prices and make money.
IMO quite a few LLCs will fail and maybe one Legacy. Either way the market will stabilize itself. No need for gov't interference, unless it has to do with reducing the price of oil
I get so sick and tired of everyone blaming the industry's problems on oil and overcapacity.
Airlines have managed to lose money even when oil was not an issue. They continue to price their product below cost, which is creating a price floor, one that does not allow them to maintain consistent profits.
If oil is such a significant variable, then why don't we see Corporate and Cargo companies laying off and furloughing en masse?
There is not an excess of capacity, just an excess of cheap capacity.
The airline industry is a volume based one, which is partly why they cannot turn a profit with cumulative load factors around 85%.