How can so many airlines be going bankrupt when prices are ridiculous, services are less, & flights are full??

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mikey D

First looking at the cost of flights today compared to 1970's the cost is almost the same. Take into consideration all of the costs for basic operation have gone up and the fact that airlines sell about 60% of the seats at a loss. hopig to make it up in cargo mail etc. Why this industry has never learned how to operate at the break even point is beyond me. Hedging fuel is the best way to cut costs but yet the more expensive it gets the less they hedge the bigger the losses. I cannot think of a CEO that is not overpaid for the poor judgement they display. Look at American Continental and Delta. Continental and Delta replaced the MD 80 fleet with B737's about 5 years ago. Operationaly they have 4 planes now that the crew is interchangebl on the 737 300,500,700,800, and 900 may all be in place. Fleet commonality is a huge scheduling and training expense. That is the benefit of the Airbus fleet a pilot can fly almost all of them with only a few days of ground training rather than months of it.

rodolfo s

I am a Travel Agent since over 30 years and have seen many airlines coming and going.

Bad Management is #1 reason.

the fuel, salaries, taxes are hitting all airlines alike and the donÂ´t go all bankrupt.
But the Dinosaur Airlines have Managers higher up and in the Middle Management who do not know what they are doing, they are to slow to react. Often I wonder how they got this position. I could write a book of all stupid decisions airlines have made ...and finally ended in bankruptcy.

Munchen008

People don't understand how expensive it is to run an airline and when adjusted for inflation, fares are less than they were in the 1960's and 1970's. You get what you pay for, the airlines are a business, not a charity. A business cannot lose money indefinitely and not fail. In the next few years, you will see more go out of business or merge. There isn't a lot of other options available.

James

Wages and petrol

sandy_dfw

Mostly the cost of fuel. But the salaries of management and pilots are a major factor also.

suncatcher

if the airline you chose to fly with is giving you less in the way of snacks, ect it sounds like you got a budget flight not
full fare also people use fly by points for free flights
the cost of fuel is going up , airlines have to pay tax landing and taking off staff ect so there for they could go broke if
airlines are not managing things properly ,there are all soets of reasons they go broke
look at Centro properties they have great shopping centre , but are in trouble world wide for over committing themselves
with , properties and shares

dumplingmuffin

price of fuel,and employees wages,electricity and leases and everything else inlife that has gone up recently

potatochip

There are many reasons and I think everyone to some degree mentioned it. The airlines have a high fixed cost such as aircraft, airport operations and salary expense. These costs will be there even if the airline does not operate a single flight. Fuel is now the number one expense for an airline. It used to be employee salary. You would be surprised at how many seats the airlines have to sell in order to break-even on a flight.

The legacy carriers have really high salaries that they pay to employees and many of their aircraft are older so the maintenance on those aircraft cost more. Also the older aircraft are not as fuel efficient as some of the newer aircraft that you see today. The low-cost carriers have newer aircraft which save money both on fuel and maintenance costs. Also many of the low-cost carriers do not have unionized employees. Therefore the people who work at those airlines earn less money.

Also please know that even though an airplane is packed, it does not mean it is making a lot of money. If the destination that flight is going to is a leisure city, the ticket price will not be super-high because leisure travelers are more price sensitive and are only willing to pay up to a certain amount before they either choose a different city to fly to or decide to drive there.

Sophia S

The best way for you to understand the vicious cycle is to watch A Week in the Life of American Airlines which CNBC has been featuring on their network news channel as a documentary. A typical example was when they featured American's flight 1 from New York to Los Angeles. American uses a Boeing 767 on that flight that fits 167 to 225 passengers. With the cost of fuel, plus amenities, manpower all calculated, the flight was also full, they only made a profit from that flight to the tune of a whopping $200. Try checking the programme schedule for CNBC and see if they will be showing that documentary anytime soon. Interesting stuff.

dtadd@xtra.co.nz

well they have so maney people to pay that work there

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