pstarr wrote:Tanada, your article argues that low fuel prices will cause airlines "to backslide on their new-found religion against deploying too much capacity." Why should that be bad?
It seems that adding capacity (on the assumption that lower fuel cost reduce overhead) will allow the airlines to attract additional passengers and lower ticket prices for all passengers. How can that be a bad business decision?
Well here is the way I see it. Toledo express Airport is the closest airport to my home and it has six terminal gates for airlines to use. Over the last decade it has fallen in use so far that there is very rarely more than one or two flights per day. So say Northwest or United decides to add flights to Toledo because fuel is cheap. Will that actually make even a tiny difference in the life of people from this area? Detroit Windsor International airport is 60 minutes north taking I-75 and Cleveland International airport is 90 minutes east on I-80/90.
When Toledo airport started out they had direct flights to places people wanted to go like Orlando, Florida or New York City, but when the hub and spoke model came into existence it was switched from being a direct flight airport to being an airport you could reach only by flying from a connection in Detroit, Cleveland or sometimes Chicago. Under the new spoke model none of the national carriers give a hoot about adding a flight to Toledo because it is not seen as a destination city and there is not enough travel leaving Toledo to justify a direct flight pattern.