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Why airlines are always going bankrupt

davidoks.blog

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Re: Why airlines are always going bankrupt

#61

Post by rayiner »

zbentley wrote: post #25
rayiner wrote: post #17

Earlier quoted context omitted.

U.S. bankruptcy law is a foundational social technology that enables the marvelous world around you to exist.

Even if that's true, current bankruptcy law is still really far from socially optimal. There are a lot more points on the "how does your system respond to business failure" spectrum besides low-consequence ch11/better-luck-next-time and debtors' prison.

> Even if that's true, current bankruptcy law is still really far from socially optimal

A 787 isn’t an optimal airplane either, but it’s a damn good design and it’s silly to compare it to things that don’t exist yet.

Re: Why airlines are always going bankrupt

#62

Post by rayiner »

agency wrote: post #18
rayiner wrote: post #17

Earlier quoted context omitted.

U.S. bankruptcy law is a foundational social technology that enables the marvelous world around you to exist.

Is the marvelous world in the room with us right now?

We’re literally arguing with each other over it.

Re: Why airlines are always going bankrupt

#63

Post by rayiner »

bestouff wrote: post #50
rayiner wrote: post #8

Earlier quoted context omitted.

> was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits. That's because this assertion is economically illiterate. Deregulation can lead to increased profits where otherwise companies have monopoly power. But often, the regulation was there in the first place to ensure that companies had sufficient profit to invest in expensive infrastructure. ( E.g. rai…

That also didn't work well. The US is notoriously very poor in railroads.

The U.S. has the best rail infrastructure in the world. It’s just designed for moving cargo across what used to be the world’s largest industrial center instead of moving passengers around.

Re: Why airlines are always going bankrupt

#64

Post by jmpman »

Refreeze5224 wrote: post #41
jmpman wrote: post #13

How much of this is related to the pilots union? It seems like they capture all excess profit in the system during the good times, and fight vigorously to keep their inflated earnings even during the bad times.

How much of your earnings are inflated? Do you safely do a job that potentially risks several hundred people's lives every single day? Do you realize you are infinitely closer to a pilot than a billionaire or a founder or whomever it is you seem to care more about than working people? Class consciousness, solidarity, and workers literally fighting and dying earned you an 8 hour day, social security, and all the workp…

None of my earnings are inflated. My wage is set by the market, not by a group of people threatening to paralyze the economy.

Every pilot I've spoken to is against school teachers unions and yet doesn't realize that pilots are just bus drivers in the sky.

And yes, this does influence me. When a pilot makes $600k/year instead of $300k per year, my ticket price goes up 10%.

Re: Why airlines are always going bankrupt

#65

Post by jmpman »

turrican wrote: post #20
jmpman wrote: post #13

How much of this is related to the pilots union? It seems like they capture all excess profit in the system during the good times, and fight vigorously to keep their inflated earnings even during the bad times.

The article touches on this. Pilot wages are very similar across major US airlines due to heavy unionization and pattern bargaining, so labor is more-or-less a fixed cost (and not the biggest fixed cost). Additionally, pilots can and do take pay cuts in lean times. The pilots at my own airline saw a 20% pay cut in the contract following 9/11 and very reduced wage growth for a decade after that. Management took someth…

It's the same thing I have against government employee unions. I, as a consumer, don't have an option to select a flight without unionized pilots. Every additional dollar a pilot earns in wages is another dollar that comes out of my pocket. Do I get ANYTHING by paying that additional dollar? You're not creating innovation. You're a rent seeking tax on society. The very definition of a zero sum game.

Re: Why airlines are always going bankrupt

#66

Post by turrican »

jmpman wrote: post #65
turrican wrote: post #20

Earlier quoted context omitted.

The article touches on this. Pilot wages are very similar across major US airlines due to heavy unionization and pattern bargaining, so labor is more-or-less a fixed cost (and not the biggest fixed cost). Additionally, pilots can and do take pay cuts in lean times. The pilots at my own airline saw a 20% pay cut in the contract following 9/11 and very reduced wage growth for a decade after that. Management took someth…

It's the same thing I have against government employee unions. I, as a consumer, don't have an option to select a flight without unionized pilots. Every additional dollar a pilot earns in wages is another dollar that comes out of my pocket. Do I get ANYTHING by paying that additional dollar? You're not creating innovation. You're a rent seeking tax on society. The very definition of a zero sum game.

I’m really sorry you feel that way.

I’m very thankful for the stability and opportunities being a union member has provided my family since I left the tech field, and I wish my friends still in tech could enjoy the same QOL rather than all of us being worse off and upper management being even richer.

Re: Why airlines are always going bankrupt

#67

Post by bestouff »

rayiner wrote: post #63
bestouff wrote: post #50

Earlier quoted context omitted.

That also didn't work well. The US is notoriously very poor in railroads.

The U.S. has the best rail infrastructure in the world. It’s just designed for moving cargo across what used to be the world’s largest industrial center instead of moving passengers around.

Yeah well not everybody agrees : https://sites.lafayette.edu/engineers-in-bonn/2025/04/22/us-...

Re: Why airlines are always going bankrupt

#68

Post by jfengel »

DangitBobby wrote: post #45
dwd wrote: post #31

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.

But _why_ is it a losing business? The article also mentions frequent flier programs.

It's a losing business for exactly the reason they sold us on deregulation in the first place: "Competition drives down prices". It's hard to understand why they fought so hard for it, because they got exactly what they said we'd get.

Consumers compare prices and will always take the cheapest one, even if it's only by a few dollars. They don't think about which airline would be more comfortable, so they make comfort worse and worse. There's very little room in the market for a less-uncomfortable plane. They can auction off exit row seats, but for the most part it's "cattle car" and "first class" at ten times the price (for the people who don't care about price at all).

Frequent flier programs try to stem the flow of people to the cheapest airline, but it doesn't help all that much. They get to charge slightly more than they would otherwise, especially since everybody has a frequent flier program (so everybody gets to raise prices and nobody gives you the even-cheaper alternative). But the various benefits that they use to entice you eat up most of the profits.

Basically they're hoist by their own petard. They promised lower prices but didn't think they'd have to deliver. Instead consumers took them up on it, in droves.

Re: Why airlines are always going bankrupt

#69

Post by rayiner »

bestouff wrote: post #67
rayiner wrote: post #63

Earlier quoted context omitted.

The U.S. has the best rail infrastructure in the world. It’s just designed for moving cargo across what used to be the world’s largest industrial center instead of moving passengers around.

Yeah well not everybody agrees : https://sites.lafayette.edu/engineers-in-bonn/2025/04/22/us-...

The second sentence of your article addresses my point:

> As tourists and students studying for a semester we aren’t going to interact with electrical or plumbing related infrastructure that acts behind the scenes as long as it works. The infrastructure we are most concerned about as people traveling is transportation, specifically passenger transportation.

The U.S. isn’t a tourist country and hasn’t optimized its rail infrastructure for moving tourists around. Its infrastructure is optimized for moving raw materials and finished products around a huge single market.

Re: Why airlines are always going bankrupt

#70

Post by jmpman »

turrican wrote: post #66
jmpman wrote: post #65

Earlier quoted context omitted.

It's the same thing I have against government employee unions. I, as a consumer, don't have an option to select a flight without unionized pilots. Every additional dollar a pilot earns in wages is another dollar that comes out of my pocket. Do I get ANYTHING by paying that additional dollar? You're not creating innovation. You're a rent seeking tax on society. The very definition of a zero sum game.

I’m really sorry you feel that way. I’m very thankful for the stability and opportunities being a union member has provided my family since I left the tech field, and I wish my friends still in tech could enjoy the same QOL rather than all of us being worse off and upper management being even richer.

I'm sorry you don't see your arrangement as parasitic to society. And I apologize for being the first person to point it out to you.
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