Maynard, Micheline. 2005. "Latest Target of Airline Cuts: Number of Seats." New York Times (29 March).
"Big airlines have complained over the last few years that the industry was awash in seats. But despite deep financial losses, none of them wanted to reduce capacity, given the heavy demand for travel."
"... the big airlines are beginning to retire less efficient planes and reduce domestic service."
"United, which has been in bankruptcy protection since December 2002, is cutting seats within the United States by 12 percent, even as it expands its flights overseas with new routes to Asia and Latin America. Still, United has cut its fleet by 69 planes since last summer and shifted some to its low-fare airline, Ted, and its regional carrier, United Express."
"Meanwhile, American and Continental have each said they would cut domestic seats by about 1 percent, although both plan to grow internationally. Northwest, which planned to expand its capacity by 2 percent to 3 percent this year, instead said earlier this month that its 2005 capacity would be flat with 2004. The airline said it planned to retire 30 aircraft, including 24 of its aging McDonnell-Douglas DC-9 jets, some of which are more than 30 years old. That announcement meant the loss of 130 mechanics' jobs in the Minneapolis area, where Northwest is based; the airline said it could cut another 800 jobs later this year."
"Delta is retiring 24 of its Boeing 737 planes, but its seat capacity will grow 5 percent to 6 percent this year, largely because it is also expanding its overseas flights. Delta has also restructured its domestic schedules and operating procedures to wring more out of its remaining aircraft. Still, American's chief executive, Gerard J. Arpey, recently predicted that the industry would be forced to cut more seat capacity because of high fuel prices, which have already prompted three rounds of fare increases."
"Northwest has cut seats from Minneapolis to Kalamazoo, Mich., by 29 percent in 2005 compared with last year, according to an estimate by Back Aviation Solutions, an industry consulting firm. Northwest is offering 28 percent fewer seats from Memphis to Louisville, Ky., and 27 percent fewer seats from Detroit to Kansas City, Mo., than it did last year. Meanwhile, United has reduced seats between Denver and Indianapolis by 58 percent in 2005. It is offering 46 percent fewer seats between Buffalo and Chicago O'Hare and 37 percent fewer between Miami and O'Hare, Back Aviation's numbers showed."
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Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901
