Why are airlines such a tough business?

American Airlines bankruptcy is 189th in US since 1978

When American Airlines filed for bankruptcy protection last week, it was the 189th time an airline in the US had gone down this route since 1978, when the government there deregulated the industry. Most of these bankrupt companies survived. But keeping an airline afloat is an increasingly pricey business as labour costs (highly specialised jobs demand higher salaries), volatile oil prices, economic recessions, low-cost competition, expensive aircraft, fear of terrorism and natural disasters from volcanic ash clouds to disease outbreaks push airlines closer to the edge.
US airlines have lost $54.5 billion over the last ten years and have failed to collectively make a profit in seven of those ten years.
[pictured: Finnair Airbus A330; courtesy oneworld]


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