The Incredible Shrinking Airlines

Throughout the summer, as gas prices soared to $147 a barrel, the airlines threatened repeatedly that their only path back to profitability was through downsizing. Well, the flight data for the month of September is now in, and the airlines have proven true to their word: The downsizing has begun.

[[American Airlines | American]], still the world’s largest airline, flew 7.0 percent fewer ASMs (available seat miles, the industry measure of capacity) in September, compared to the same period last year. [[United Airlines | United]] was down 8.6 percent. [[Continental Airlines |Continental]] shed 8.8 percent of its capacity. Even [[JetBlue]] shifted into slim-down mode, taking 11.5 percent of its capacity out of circulation. [[Southwest Airlines | Southwest]] was the only large carrier posting a year-over-year increase, albeit a paltry 0.8 percent.

The goal of the capacity cuts is simple. In general terms, a scarcer product commands a higher price. And in the travel realm, fewer flights should allow the airlines to charge higher ticket prices.

It remains to be seen whether the cuts will generate the desired increase in fares without dissuading too many from flying altogether. It’s a delicate balance, and the current economic uncertainty could undermine consumer demand more than anticipated, forcing the airlines back into aggressive discounting to fill empty seats.

While those higher prices, if they materialize, won’t be welcomed by the traveling public, there is one salutary effect of reducing the number of flights jockeying for takeoff and landing spots at the nation’s airports—better on-time departure and arrival performance. According to the Fort Worth Star-Telegram, the major airlines were on time about 83 percent of the time during September, the best they’ve managed all year.

American and United were the worst of the large carriers, both operating on-time flights just 79 percent of the time. The best was [[Virgin America]], at 91 percent, followed by [[Northwest Airlines | Northwest]] at 90 percent and Southwest at 88 percent.