Still, there is good news. On the demand side, we have seen continuing strength in business traffic...and there seems to be room for improvement. The key metric, revenue per available seat mile (RASM, revenue per unit of capacity) has seen strong gains, and pricing is good (though not as strong as the peak).
One of the reasons pricing has gone up is capacity is lower...so greater demand, lower supply.
The big sword hanging over the airlines' head: will they increase capacity? Now that oil prices have spiked, there is continuing talk about taking out capacity because oil is still not far from $100, and at those prices many routes are still not profitable. So the relatively higher prices are still forcing them to be more disciplined.
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