Comment by vadym909 | Hacker News Reader

Comment by vadym909 | Hacker News Reader

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I agree. Transportation companies just don't tend to be profitable. Airlines are super competitive and minimally profitable. The airlines folks have a saying- they can only be as profitable as their dumbest competitor- and these are people that actually own or lease their planes and have airports and routes granted to them. Even monopolies like taxi cab companies weren't that profitable if you consider the costs of the medallions. Its just hard to make money in transport- drivers make peanuts, car companies have razor thin margins, oil is too volatile, customers are too cost-conscious. Very different than enterprise software or pharma.

Airlines have had trouble with this for a long time. "The Sporty Game", by John Newhouse (1982) tells this story from the aircraft builder perspective. Over the history of airlines, the industry was a net financial lose. As of 1982, the only aircraft product lines to make money were the Boeing 727 (because so many were made) and the 747 (because it was so big).

The US used to have a highly regulated airline industry. The Civil Aeronautics Board decided who could fly where. Then came airline deregulation. Suddenly there were lots of new airlines, most of which went bust. Now we have fewer airlines than before deregulation, worse service, and constantly changing fares. On the aircraft side, airlines are buying new copies of the antiquated Boeing 737, because it's cheap. The B-757 and B-767 are being phased out in favor of the old, narrow 737.

Airfare is cheaper than it was in the past. You can still get good service but you have to pay more.

The 767 is being replaced by the new, widebody 787. The new 737s don't have much other than the name in common with the 737s from 30 years ago.

All 737s have the same old 3.53m cabin diameter.

I agree. The reason why insurance is so profitable, companies don't actually incur huge expense.

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