I think this guy at Stifel Nicolaus has it generally right, that the airlines that survive this shakeup will emerge with a fundamentally different model, selling a mid-priced product for the moderately affluent and affluent, rather than a cheap transportation commodity.
Based on that assumption coupled with generally declining oil prices, the brokerage issued a buy order on American, Continental, Delta and United. That's not a bet I'd be rushing to make, but still, the assessment of the new air-transport model seems about right to me.
With airlines slashing domestic capacity, we're witnessing the end of a 25-year-long era of dirt-cheap, wildly abundant air-transportation options. And it's not going to return.
Totally left un-addressed in Washington: What kind of a national air-transport system will we be left with, once the new model emerges? Who gets left out? What options will they have, if any? What is the overall effect on the hugely important tourism industry?
Airlines are busily parking planes. Mostly, it's regional jets and older single-aisle mid-sized jets that are ending up in the Sonoran and Mojave deserts -- each one reflecting a diminution of domestic capacity that won't be replaced.
Meanwhile, airlines are now figuring, anxiously, that they might be able to reconfigure themselves and make it, barely, if oil dips to around $80 a barrel. But as Kevin Mitchell, the chairman of the Business Travel Coalition, told me the other day: "Operating with $80 oil, nobody is going to be replacing fleets."