Mainlines, LCCs Adding Dropped Markets

The capacity cuts remain in flux as mainline carriers find opportunities in the service cuts of their competitors. In addition, low cost carriers are beginning to fill the void left by American but so far the moves are a drop in the bucket compared to the draconian measures taken by mainlines earlier this year.
So far United Express and US Airways Express have moved in to replace service abandoned by American Eagle, Delta and Horizon. In addition, a Puerto Rican tourism company, reacting to the dramatic cuts by American there, has enticed two low cost carriers and American to maintain connectivity to the mainland.
However, the big question remains as to whether low-cost carriers will go into dropped markets, as they have in the past, thereby limiting the impact of the capacity cuts on fares. While the communities ring their hands about the draconian cuts announced earlier this year, the actual fallout is still unknown.
Flights are expected to drop another 9.3 percent in November, a decline of 9.6 percent in seats, according to Boyd Group President Mike Boyd, who said the cuts will continue through next year, ending in a smaller industry overall when he predicts there will be 15 to 18 percent less capacity and correspondingly higher fares. For a complete report see Monday's issue of Regional Aviation News.