Why do airlines go bankrupt so frequently?
Airline bankruptcy
Airline bankruptcies happen so often that it's a wonder people still fly. Yet the industry is still thriving, and those of us who have no other choice but to fly, keep flying. So what exactly is going on?
Skybus airlines
A few years ago, a new airline called Skybus started up in Columbus, Ohio. It promised low prices on air travel to nearby cities like Chicago, Detroit, and Pittsburgh. This was great for people living in the area because ticket prices were now half what they'd been with the other airlines.
But Skybus couldn't hold on to its low prices forever or get enough business from these smaller cities to make it profitable. Less than a year after its start-up, Skybus went bankrupt.
Airlines going bankrupt frequently
A lot of them do survive, and those that don't are usually small regional carriers looking to fill a niche. The main reason that airlines go bankrupt so frequently is because of the high cost of maintenance and fuel for their planes. Since they can't charge any more for tickets than competitors already are charging, they have to find ways to reduce their operational costs while continuing to provide good service.
High cost of fuel
If a company is in business long enough, it's bound to go bankrupt. It seems like airlines go bankrupt every other week, but why do they keep failing? A lot of people think that airlines are just poorly managed, but there are plenty of poorly managed companies that don't end up filing for bankruptcy protection. It turns out that the intense competition in the airline industry and the high cost of fuel are the biggest factors in bringing down airliners.
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