The airlines have consistently been losing money year after year. Many people have attributed this trend to a combination of high fuel costs and high taxes. However, this article maintains that this does not tell the entire story. Since the airlines were deregulated 30 years ago, they’ve lost a total of around $60 billion. However, in those years, high fuel costs only were a factor for the first few years and the last few years; the years in between, the cost of fuel was low and they still were not consistently posting profits. They also argue that taxes have not been the main cause of this, either. Rather, legacy airlines have higher operating costs than the low-cost carriers which has kept them from being very competitive. Read the entire article for the full explanation of this situation.

Source: Freakonomics Blog

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