So where does capacity go?

The bankruptcy reorganisation and (anticipated) shutdown, sale, or liquidation of Independence Air has excited some analysts and observers, who think that its exit would take some capacity out of the super competitive East Coast market and so eliminate some of the low, low, below-cost fares that have bled airlines flying up and down the eastern seaboard and At Washington's Dulles, the Independence base.

Not so fast. Within hours of the Independence bankruptcy filing, AirTran said it would expand its Dulles operation with new service to Boston Logan and added flights to Orlando. Both have been routes on which Independence relied. Now comes one of the most feared challengers in the business, jetBlue, which plans to add Logan flights to its Dulles roster. Its eight daily roundtrips rival Independence frequencies at their height. All these services begin in January. The clear beneficiary may well be Logan and Boston travellers, but the moves are nails for the anticipated Independence coffin. And they boost the boast of the many Dulles backers: the Virginia airport is going to be a low-fares bastion. Independence may well go away, but that doesn't mean competition is going away, too