The incredible shrinking airline
July 02, 2009 | Online Travel
U.S. carriers long accustomed to elbowing their way to market share by adding planes and routes and destinations are now scrambling to see who can shrink the fastest, changing the entire business model, writes Travel Weekly.
Arne Haak, AirTran’s CFO, captured the current mindset of the airline industry when he told analysts at this month’s Merrill Lynch investors conference in New York that “minus-4% is the new growth.”
While negative growth describes everything about the industry today, from routes to new plane orders, Haak was talking about capacity as carriers are now preparing to cut more deeply through the rest of this year than they had initially planned.
For example, Delta, which earlier had said it would cut capacity 6% to 8% this year, said in June that it planned to trim 10%. American, whose previous forecast had called for a 6.5% cut, is now saying it will be closer to 7.5%.
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