Friday, December 03, 2010

Airlines Slowly Adding Capacity; Wall Street Doesn't Like This

Airlines are slowly adding seat capacity. Delta, for example, said today that its systemwide capacity was up 7.5 percent in November compared with Nov. 2009. Traffic was also up 7.5 percent, Delta said.

That suggests that supply and demand, which airlines have massaged in the last year to a formula that enables them to be profitable, is still under control, even if supply is rising.

Wall Street, which understands nothing but the primal scream of fast money, does not approve. In the last month, on worries that airlines might be adding capacity to serve growing demand, Delta's stock has been driven down 4.72 percent.


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