I wonder if Gary Chase got any sleep last night?

This morning, the Lehman Brothers analyst was out with another interesting research note. Every Friday Gary updates investors on the industry’s capacity moves. Today? He had some interesting news concerning Virgin America’s trans-cons in his pre-update capacity note.

Gary reports that Virgin in pulling down capacity in its trans-con routes.

Clearly, this is primarily good news for JetBlue. But it also is good news for other airlines that fly a notable portion of their RASMs in trans-cons as well, including American, United, Delta, and Continental.

According to Gary, Virgin  today pulled about 14% out of its JFK-SFO schedule and 6% out of its JFK-LAX schedule for Nov, Dec, and Jan period (deepest reductions come in Dec).  JFK-SFO went from 4x daily to 3x daily and JFK-LAX went from 4x to 3x (in the off-peak parts of the month) in the schedule tapes.  The adjustments begin in late November. As Gary noted, “It may be only for the off-peak period, but it sure is better than the previous schedule.”

So is Virgin merely moving the capacity elsewhere? Nope. Gary reports that there does not appear to be any offsetting additions by the airline.

Gary’s overall take on the news? “We don’t think Virgin would be drawing down capacity if they were eating everyone’s lunch in these markets and shifting large market share.”

Tickers: (UAUA:Nasdaq); (CAL:NYSE), (AMR:NYSE), (JBLU:Nasdaq)

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