Monday Insight - March 2, 2026

Points to  Consider This Week

FAA & O’Hare: Capacity Cutbacks – Welcomed By AA/UA?

The Federal Aviation Administration has announced that they intend to monitor and reduce thruput at Chicago/O’Hare for the coming summer.

In light of the recent frequency build-up at American and United, one would logically conclude that both carriers would be mightily disappointed. The last 90 days has been a blizzard of announcements of new and increased market frequencies at ORD.

But take a look at the official responses from both AA and UA. Almost gushing thanks and support for expressed to FAA Administrator Bryan Bedford. They are fully aware that a jump from @2,600 operations to over 3,000 was going to be a recipe for major system operational damage. Just a couple of perfunctory Friday-PM thunderstorms over ORD, and the system fun will start.

As it stands today, the FAA can barely manage the current level of operations, let alone a major increase.

Watch for: AA and UA culling their low-feed markets. Watch for the smiles at some smaller airports that are expecting new AA or UA service this summer to fade fast.

Bet on frequencies at some markets still served with 50-seat jets to be on the chopping block by the end of March.

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Mid-East: USA Carriers Are In The Revenue Crosshairs, Too

Take a look at the map.

Just about anything flying between the EU and Asia, particularly the Indian Sub-Continent, is routed right over the region affected by the fighting around Iran. We are talking from Cyprus to the eastern boarder of Pakistan. Closed air space.

If this situation continues for another several weeks, some airlines will be trapped in a nasty financial Venus Flytrap. No flying, no revenue. Plus, overflight shifts will bounce route costs up somewhere close to Mars.

Do some first-thinking on how this will affect USA airlines – which on the surface have minimum exposure.

But that’s not accurate. American, United and Delta feed thousands of passengers from the US to points affected by the hostilities, by way of connections over their alliance partner hubsites.

Keep in mind that the oneworld alliance feeds AA traffic connecting over partner’s hubsites to points affected by the hostilities. United’s feed traffic routed over Frankfurt will get zapped, also. Traffic flows to points in the Eastern Mediterranean are likely going to dry up, and that’ll affect UA at IAD and ORD. AA and DL will find the boardings at JFK that are destined for anywhere roughly east of Greece will go dead.

No estimates of the financial hit to these USA carriers – yet. But it will be a hit.

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Mexico – It’s Now A Civil War That’s No Longer Regional

The violence in Puerta Vallarta, where the federales managed to whack a major drug lord, quickly spread to several other Mexican cities. The cartel or cartels involved had no problem expressing their displeasure in losing their glorious leader. So they went ahead with a demonstration that included shooting up or blowing up wide areas of Mexico.

These cartels are not random gaggles of banditos, but are well-established military organizations defending and expanding their various dark enterprises. Reportedly they have de facto control of wide areas of the country.

Point: for USA carriers, most of the 27 million O&D between the US and Mexico are leisure travelers. As I pointed out in this week’s Touch & Go™ letter, having to watch a Mexican re-make of the Tet Offensive from their lavish beach hotel suites was not likely included in the sales brochures.

First-Thought Consideration: This will affect Mexico as a vacation destination. The civil war is no longer isolated to the boondocks. Watch for attempts at remediation on the part of the resorts and leisure-product stakeholders.

Don’t know if that’ll work.