20 March 2008

US Airlines panic and yank on the handbrake

When I was a lot younger - I, (and many other young Brits) used to practice what we called "Handbrake Turns". In small English cars like an A40 or a Mini this was quite effective at dramatically changing direction of the vehicle. The US Airline group seem to be wanting that kind of change now.

There is just a blizzard of stories coming down the wires about how the US Airlines are falling over themselves trying to cut capacity.

Delta is telling everyone it is now "an international" airline and will cut dramatically its US point to point routes. Look for CVG to take a hit again. 3000 staff will be shed and many older aircraft idled. (With the 733s ad 762s now all gone that can only mean the MD88s of which some are already parked). And you can kiss that merger goodbye.

United is spreading doom and gloom everywhere. As it should - its in a very weak position

The list goes one with Alaska, Frontier and Jetblue also hastening departures from their fleets. For these 3 carriers these will be low time aircraft.

About the only one person who can be happy with this is Southwest. If everyone else panics and slashes capacity - then WN will benefit. Can you say Texas Hold'em?

Chaps - slashing your way to success is a poor strategy. Think about your businesses in totality. Slashing the US domestic feed spells trouble for Delta. Putting all your eggs in one basket (International) which is much more volatile and risk prone to me is a poorly thought out move.

Come back Jerry - all is forgiven.

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