Quote:
Originally Posted by petep9000
Someone needs to explain this to me because I'm none too bright. People fly more now than they ever did. There is a HUGE demand for flights in our country, domestic and international. People will pay. And people will be brand-loyal in order to score upgrades or free tickets. So, why are the airlines in turmoil? Why are they going out of business, or going into chapter 11? Why aren't they rolling in money?
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While it is true that passenger demand continues to rise, so has the cost of jet fuel. This has been a major factor in the recent bankruptcies- especially in ATA's case. That said, airlines go out of business/file for bankruptcy all the time. Just about every major airline has gone through some re-organization project at one time or another in its history.
Its incredibly difficult for an airline to regularly turn profits, and has been for at least 10 years (even longer for the non low-fare "legacy" carriers, like United & American), mainly due to the unions. Southwest (a direct beneficiary of the Federal Airline deregulation act) is just about the only airline that turns a profit every quarter.