Originally Posted by
okrogius
Demand in't constant. Given the different routes each airline flies, demand variations based on time aren't the same. Similarly, even across the same airline it's a combination of flights being removed and added - and demand varies by route.
Your statement is true demand is neither 100% elastic, nor inelastic, but the premise of my statement is also true. Airlines have reduced capacity (or added with discipline) the past few years (in conjunction with consolidating airlines) in order to assure higher yields. Just about any finanical report on any of the US based network carriers over the past few years will emphasize the fact that airlines have learned from the past and reduced flying to maintain yields, or added flying in smaller quantities then the past for the same reason.
A side benefit that helps AA of reducing flyin a few % is that aircraft utilization drops, which means a) older more mechanical prone aircraft are not being flown (i.e. less mechanicals) or b) all/most aircraft are bing flown less, giving less stress and more fix time.
I'm not knocking the business practice, it makes sense, but it also is an easy way to show gains to these metrics compared to an airlinethat expands, which will have a tougher time getting the same stats.