Big Airlines Rein In Capacity Amid Fare Softness

By | April 27, 2015

Air travel demand is fairly strong and airplanes are pretty full. Airlines are raking in profits. Fares are flat or down. Where will they go from here?

Predicting airfares is risky, with wild cards in the form of fuel prices, competition and the economy. Fundamentally, fares are a function of supply and demand. An imbalance there created some fare softness this year, but the bigger airlines are looking to regain stability.

With consistent healthy demand, the metric to watch is capacity. The game for a while has been all about discipline . . .

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