Simply because flying passengers is a losing business.
The ones that make money operate as financial services from selling points to their partners via their frequent flyer programs.
Why airlines are always going bankrupt
31–40 of 76 posts
Re: Why airlines are always going bankrupt
#32> From its deregulation in 1978 to the end of 2025, the airline industry has cumulatively lost money: its net profit over those 47 years sits at negative $37 billion. That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits. My understanding is that before regulation, routes were allotted by the government. So an airline might own New York to Boston, s…
A race to the bottom on pilot pay won't help anything. Well it may lead to less qualified pilots. You can ask Boeing how well screwing over labor has worked for them if you like. All US airlines have the same labor costs for pilots and it isn't their highest cost anyway. That would be fuel. If you want to divvy up costs that way: Boeing is probably the biggest problem. Both them and Airbus eat up all possible excess…
> Break up Boeing, bring back competition in airliner manufacturing.
Sounds backwards. Pilots have a total monopoly. Boeing doesn't.
Re: Why airlines are always going bankrupt
#33Simply because flying passengers is a losing business. The ones that make money operate as financial services from selling points to their partners via their frequent flyer programs.
United’s pre-flight safety notices make it appear as if they spared no expense…
Re: Why airlines are always going bankrupt
#34Earlier quoted context omitted.
A race to the bottom on pilot pay won't help anything. Well it may lead to less qualified pilots. You can ask Boeing how well screwing over labor has worked for them if you like. All US airlines have the same labor costs for pilots and it isn't their highest cost anyway. That would be fuel. If you want to divvy up costs that way: Boeing is probably the biggest problem. Both them and Airbus eat up all possible excess…
> Break up Boeing, bring back competition in airliner manufacturing. Sounds backwards. Pilots have a total monopoly. Boeing doesn't.
sure, airlines have a choice among tens of US aircraft making companies other than Boeing... oh wait...
Re: Why airlines are always going bankrupt
#35> From its deregulation in 1978 to the end of 2025, the airline industry has cumulatively lost money: its net profit over those 47 years sits at negative $37 billion. That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits. My understanding is that before regulation, routes were allotted by the government. So an airline might own New York to Boston, s…
> That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits.
It really depends on the market. In a potentially competitive market, deregulation can work as a function to drive down margins.
Air travel is such a market. Prior to deregulation, routes were set by government action and competition was limited. With deregulation, it's not that hard to setup a commercial scheduled airline, and new airlines popup relatively frequently to address routes where there is margin. It doesn't take that much capital to start an airline; you can lease the aircraft and contract out maintenance (might be part of the lease) and start with a single round trip per day. You don't need to start with a big network or a lot of aircraft. It's not so easy to get slots at busy airports, but you don't have to start there either.
Where deregulation ends up leading to outsized profits is where the market leads to natural monopoly and regulation provides an upper bound on margin, rather than a lower bound. Things like last mile utilities, where it's difficult to run multiple networks in the same space: ex water, sewage, electricity, telecom. In situations like that, to promote competition you want to do regulated unbundling, so there's one organization that runs the last mile and choices for service over the last mile: ex you pay the last mile for delivery of water per acre foot and also your water supplier who must deliver the same number of acre feet to the water network. (or probably a little more, water networks have shrinkage)
Re: Why airlines are always going bankrupt
#36It might not be that significant of a cost all things considered, but I have always felt the peculiar existence of "professionally happy" cabin crew, in-flight meals, screens and other pointless "comforts" glaringly unnecessary in what's generally meant to be just 2-3 hours of sitting on an average for the passengers. You could just operate a plane like a dumb bus and save up on a lot of costs and turn it into competitive advantage.
Re: Why airlines are always going bankrupt
#37The more interesting question is why airlines go bankrupt in such spectacular fashion.
Every airline that goes belly up always does it with a bang. All flights cancelled, effective immediately. Stranded customers. Tens of thousands of jobs instantly lost. Every time.
It's not like startups or even established companies wherein the time of death takes forever to get to, despite EVERYONE knowing that the body is a corpse.
It's as hilarious as it is depressing.
Re: Why airlines are always going bankrupt
#38It might not be that significant of a cost all things considered, but I have always felt the peculiar existence of "professionally happy" cabin crew, in-flight meals, screens and other pointless "comforts" glaringly unnecessary in what's generally meant to be just 2-3 hours of sitting on an average for the passengers. You could just operate a plane like a dumb bus and save up on a lot of costs and turn it into compet…
Budget airlines have tried all of these things. Planes doing short haul routes often don't have comforts like screens, let alone meal service.
It turns out that in-flight entertainment helps minimize unruly passengers, and flight attendants are there for safety, not just to serve passengers. Same for legroom requirements (egress).
Re: Why airlines are always going bankrupt
#39The more interesting question is why airlines go bankrupt in such spectacular fashion. Every airline that goes belly up always does it with a bang. All flights cancelled, effective immediately. Stranded customers. Tens of thousands of jobs instantly lost. Every time. It's not like startups or even established companies wherein the time of death takes forever to get to, despite EVERYONE knowing that the body is a corp…
Often airlines engage in merger rather than collapse. See US Airways (bankrupt) + America West, and later American Airlines (bankrupt) + US Airways.
I think the bankruptcy process does tend to lead toward spectacular failure when the cost of operating is too far above the revenue from operating. Decreasing operations during bankruptcy makes the company less attractive and may not even significantly help the net revenue situation. You really need to be solvent or nearly solvent to have an orderly winding down. That said, wikipedia says they did reduce scheduled flights by 25% in Nov 2025, and I think they reducsd the size of their fleet in a similar time frame, so it could have been that much more confusion and delay.
Re: Why airlines are always going bankrupt
#40Maybe we need Uber for airlines. Pilots don't lose their skills, passengers always have demand, the issue is that pricing is too predictable. You could see this with skiplagged, there really is room for fare pricing innovation. Start by capturing the private luxury market, work down to commodity.