The problem Delta has, and it's the problem every US airline except for Southwest has, is that they're operating in starvation mode. Their business model is that if they lose $5/ticket, they'll make up the difference in volumn. WTF? Well, here's the reasoning - if they undersell everyone else to the point where they go bankrupt but can claim a huge market share, then the federal government will be more likely to bail them out yet again. United got this free ride, and I think Delta is heading that way. Just continue the price war by selling tickets waaay under actual cost per seat-mile, make a good show of forcing your employees to take salary cuts and make work environment concessions to *prove* that they're really trying (honest!), and then when they go bankrupt hopefully the govt will help with the bailout. So they've increased market share by racing to the bottom of the bankruptcy well, knowing full well that the govt will bail them out if they get to the bottom first with a huge load of customers who are paying well under actual costs per ticket.
My solution is to add one govt regulation - that every single route MUST show a profit over the fiscal year. If it does not, the airline loses their permit to run that route and it opens up for any and all competitors at whatever fare rate WILL turn a profit. One regulation, that's it.
If they can't hack it, they go out of business WITHOUT the ugly slashing of pensions, employee benefits, and govt bailouts, because they LOST. The routes won't go away... There is enough demand that whatever airline can make a profit will run the route, hire the pilots/maintainers/support infrastructure, etc. It'll cause a shuffling in the industry, but overall capacity will keep growing and prices will only rise to whatever is required to break even or show a slight profit. The airlines bleeding some routes dry just to keep market share to protect their bailout option won't have that crutch, and they'll either adjust prices and costs to survive or they'll die, AS THEY SHOULD.
