JAILBREAK?

I started this on Saturday. Stared at it yesterday. Then, this morning #HunterKeay at #WolfeResearch put out a research note that supported the revenue v. capacity idea.

Two posts ago, I wrote about the Prisoner's Dilemma. You know, what's good for me might not be good for the industry and vice versa.

Keay wrote: "estimates are generally too high, and many airlines are adding back capacity too fast relative to a modest demand recovery tempo. In a low demand environment, the impact of a few can be material. We believe the actions of AAL, JBLU, and SAVE alone are enough to derail a growing supply/demand mismatch at an industry level."

Yep, we want passengers back on airplanes signaling the safety of flying again from a health perspective. But capacity at what price? Keay talks about some assuming a V-shaped recovery in yields.

He reminds the reader that it took 18 months for yields to recover after the Great Recession. Remember -- the industry engaged in "Capacity Discipline" that restricted capacity. And other catalysts were in play that led to higher ticket prices.

Delta and United have already gone soft on new capacity after Labor Day. Has Southwest gone eerily quiet about its year-end capacity plans?

You can always fill an airplane.

#swelbar