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Bloomberg
U.S. carriers climbed the most in almost two months after Southwest Airlines Co. said it would slow capacity growth next year, bringing the supply of seats and flights more in line with demand and possibly relieving pressure on fares.
Capacity will expand less than 4 percent next year, down from this year’s pace of 5 percent to 6 percent,
Dallas-based Southwest said in a US regulatory filing.
About two percentage points of next year’s increase will come in the domestic market, with one to two percentage points in international service, the biggest discount
carrier said.
Carriers have been discounting fares for more than a year as capacity growth has run ahead of demand, putting U.S. airline stocks on track for their biggest drop since 2011. A Bloomberg index of U.S. airlines advanced 5.1 percent at 10:25 a.m. in New York, the biggest intraday increase since July 12.
“The 2017 capacity guide should allay overcapacity fears and is supportive of all the U.S. carriers given Southwest’s sizeable market position,†Julie Yates, an analyst at Credit Suisse Group AG, said in a report.