The names of various major airlines have appeared many times over the last few decades, often due to bankruptcy, sometimes more than once. Some of the major names of a generation ago aren't even around anymore. Why does this keep happening?
2. Introduction
David Pflieger is a major airline executive with
years of experience in the industry.
The names of various major airlines have
appeared many times over the last few
decades, often due to bankruptcy, sometimes
more than once. Some of the major names of
a generation ago aren't even around anymore.
Why does this keep happening?
3. About the Airline Industry
Some of the problems are simply inherent to
the industry. Airplanes are expensive, require
constant maintenance, and their operating
costs are highly sensitive to changes in the
price of fuel. Airports are expensive, too, and
in sharply limited supply. The number of
runways restricts the number of flights
possible, and building new runways and
airports is expensive as well.
4. Conclusion
Another factor contributing to this, however, is
that many of the best-known names suffered
after deregulation, hobbled by an outdated
business model, with high labor costs and the
use of perks rather than price as an incentive
to customers. Against the low-fare newcomers
to the field, many have had great difficulty
competing, and some are just now adapting to
the new industry environment.