In 1978, the federal government deregulated the airline industry, cutting it loose from acres of red tape and allowing the free market to determine ticket prices, schedules and service levels. A quarter of a century later, the airline industry is a hopeless, money losing enterprise, squandering decades of government handouts and employee sacrifices.
How bad is it? If everyone in America sent the airline industry $100, it still wouldn't cover the nearly $30 billion the industry has lost since 2001. And it's always been this way. Since deregulation, the nine largest airline carriers have posted losses in 12 out of 26 years, racking up a cumulative loss of roughly $16 billion, according to data from the Air Transport Organization.
In a cyclical industry, these downturns are expected. But the current tidal wave of red ink has some carriers on the brink of destruction. United Airlines has been bankrupt for two years and there's no end in sight. US Airways is begging the court to break its labor contracts or it says it will have to liquidate. Delta Air Lines is fighting to avoid bankruptcy, as well.
This month marks the 26th anniversary of the Airline Deregulation Act. As another year passes and the losses mount, this is why the industry has failed and will continue to do so, unless drastic changes are made.
http://www.blacktable.com/gillin041013.htm
How bad is it? If everyone in America sent the airline industry $100, it still wouldn't cover the nearly $30 billion the industry has lost since 2001. And it's always been this way. Since deregulation, the nine largest airline carriers have posted losses in 12 out of 26 years, racking up a cumulative loss of roughly $16 billion, according to data from the Air Transport Organization.
In a cyclical industry, these downturns are expected. But the current tidal wave of red ink has some carriers on the brink of destruction. United Airlines has been bankrupt for two years and there's no end in sight. US Airways is begging the court to break its labor contracts or it says it will have to liquidate. Delta Air Lines is fighting to avoid bankruptcy, as well.
This month marks the 26th anniversary of the Airline Deregulation Act. As another year passes and the losses mount, this is why the industry has failed and will continue to do so, unless drastic changes are made.
http://www.blacktable.com/gillin041013.htm
