04 April 2008

Three airlines fail this week

Three days ago, Aloha Airlines called it quits.

Yesterday, it was ATA.

Skybus, just founded last year, is operating its last flights tonight.

The airline industry is looking desperate again, with three airline failures just this week. I sympathize with the plight of the various employees of the airlines concerned, especially flight attendants, as they pay for the bad business decisions made by their executives.

The key factors appear to be the high fuel prices and the worsening economy. In any case, it feels like a repeat of the early part of this decade, when many airlines went bankrupt, including Sarah's employer United, which came very close to liquidation if I remember correctly. Sarah ended up losing her job. And even though United recovered, and Sarah was eventually recalled, her pension plan was destroyed.

The larger airlines look safe for now, but if high fuel prices and the recession continue, something will give. And the sad truth is that passenger airlines, like passenger railroads, are a money-losing proposition. I wish the airline industry and its rank-and-file employees good luck.

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