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Comment by supertrope | Hacker News Reader

I have no love lost for airlines but they operate in a commoditized industry where customers sort tickets by price. All of the fat in the industry has been squeezed out and they have to claw for $20 here and there on a sale.

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> All of the fat in the industry has been squeezed out

I don't know where you live but in the US this is patently not true.

Airlines are an abusive oligopoly there, with landing slots and the like cementing control of certain markets for certain airlines.

Ticket prices are much higher than they used to be and are much higher than Europe (for instance).

The airline industry is famously unprofitable; it is commonly said that on net, the sum total of airlines have made $0 over the course of their history. It is true that there are periods where they do make a profit, but these periods are offset by times when they make massive losses (such as during COVID, after the Great Recession, and after 9/11).

Globally, big airlines seem to be doing fine:

https://www.aerotime.aero/articles/most-profitable-airlines

I think there are lots of airlines that are propped up by governments that lose money leading to the meme you're quoting. Many industries were affected by the events you quoted, those sorts of things aren't specific to airlines.

There are two issues with doing a static analysis on something like this:

1) Survivorship Bias: you are only looking at airlines that currently exist, and ignoring ones that have gone out of business.

2) Recency Bias: you're examining them at a time of relative prosperity and stability, ignoring their pasts.

Plane tickets in the US are, inflation adjusted, historically low. Further, the airlines themselves seem to be on perpetual life support and have variously gone into bankruptcy and resuscitated.

You see an oligopoly, but the barrier to entry is as much defined by the thin margins and high capital cost as anything else.

Airfare in the US costs less today than it did in the 90s, adjusted for inflation: https://www.bts.gov/newsroom/2024-annual-average-domestic-ai...

Its not even the same product. When one consider the crowd level at airports, the lines at security, the size of airline seats, or size of food tray which matters specially on international routes.

Though I blame no one, if people want comfort they can pay more or travel less (if possible)

> Not included: Fees for optional services, such as baggage fees.

This entire article is about how airlines are unbundling their offerings and doing market segmentation through "optional" add-ons...

Average airfare isn't a useful stat in this respect. What would be useful is comparing fares for individual routes over the years, which would tell a different story.

Average fares are skewed by low cost carriers entering the market.

>Airlines are an abusive oligopoly there

>Average fares are skewed by low cost carriers entering the market.

The large carriers, created through mergers that should never have been allowed, have the most popular routes locked up through ownership of landing/takeoff slots and similar. On those routes, fares have substantially increased due to a lack of competition.

The low cost carriers business model is to fly new routes (to secondary airports if required) at low prices, often creating new demand (Breeze is a classic example of this).

The math is very straight forward if you consider what each group is doing in the market.

Airlines make roughly no money.

OTOH, from TFA: "By 2017, US airlines were among the most profitable in the world, and some Senators pointed to things like Basic Economy as evidence that consumer interests were being undermined for the sake of extra profit."

Both statements could be true simultaneously, of course.

Airlines have substantial earnings (greater than flying?) from credit card marketing and loyalty programs.

The factoid that they make all their profit off of loyalty programmes is just a repackaging of the fact that they make pretty much no money overall. So you can pick any one part of the airline operation, account for it in a way that makes it profitable in isolation, and go "oh ho airlines really make all their profit from fuel price arbitrage between different countries" or what have you, and it's sort of true but not really reflective of reality.

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