Archive for April 18th, 2017

Are airlines ruthless profiteers?

April 18, 2017

A short course in airline economics

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First. let’s establish that I’m no fan of of traveling … especially commercial air travel … via cattle-herding airlines.

That said, I scratch my head when folks characterize airlines as ruthless profiteers.

They may be ruthless but, I think, to be a profiteer a company has to make money, right?

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Below is a chart that’s a bit dated, but makes a directional point.

The graph shows cumulative net income of US air carriers since 1938.

What is says:

Since that fateful day when Orville & Wilbur took off, U.S.  airline companies have — as a group — LOST money.

There has been some recouping in the past decade — due mostly to consolidation  — but not enough to get the industry back above the birth-to-date Mendoza line.

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What’s going on?

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