"The single overriding issue [in the US market] is excess capacity" that keeps US carriers in red ink, Southwest Airlines CEO and Vice Chairman Gary Kelly said Wednesday. Speaking to the Aero Club of Washington, Kelly said, "The market needs to be allowed to run its course. There has been no meaningful reduction of surplus capacity," unlike the experience of the last downturn. The US Airways/America West merger "is a step in the right direction," he said, adding, "The first thing I would do if I was losing money would be to stop buying airplanes."
When his call for reduced capacity was contrasted with Southwest's continuing expansion--its fleet is growing at about an 11% clip this year--Kelly said, "We're adding value, giving more flights, so more people will be flying" at lower fares. http://atwonline.com/news/story.html?storyID=2871
What kind of logic is this? We gotta reduce capacity, but, hey, I'm gonna expand my fleet.