Airline Profits Soar Leaving Passengers Sour & Employees Sore

from the Democratic Socialists of America's Talking Union blog:



Wall Street is jumping up and down because airlines are making money again, big money. The nine largest US passenger airlines posted cumulative net income of $1.45 billion for the three months ending June 30, according to Air Transport News. This is four times the income generated last year. These are not exceptions.

Passenger revenue in September increased by 19% for all the major carriers, the ninth consecutive month of gains. The good times don’t stop there. The top ten U.S. airlines will bring in profits of $2.8 billion for the current year and $3.5 billion for 2011, predicts Vaughn Cordle, founder of AirlineForecasts LLC.

But how did airlines turn their fortunes around and what does it mean for passengers and employees who can both arguably be described as long-suffering victims of greed in the sky?

While it definitely is a remarkable turnaround for the beleaguered industry it is neither a big mystery how it happened nor a big surprise that it does not necessarily bode well for either the travelling public or airline workers.

Aside from mounting industry consolidation which generates its own profit dynamic resulting from a monopoly of the skies, the profitable excesses are being accomplished the old-fashioned way: charging more fees and higher ticket prices, cramming more people into each flight and reducing service staff. ............(more)

The complete piece is at: http://talkingunion.wordpress.com/2010/10/24/airline-profits/

EACH WAY for my unaccompanied minor. Each way on a nonstop 58-minute flight. It made a $250 flight cost $450. And they didn't tell me until I dropped him off. And when I paid for the one way, they didn't tell me I'd have to pay on the back end. Cha-ching.

Remember how it was supposed to be temporary to cover fuel costs?

care much for airline stocks.


The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

— Warren Buffett, annual letter to Berkshire Hathaway shareholders, February 2008. (Great Aviation Quotes)