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Until the execs get it through their heads that you cannot sell things for less than the cost of providing it, airlines are screwed.

It's business 101. If you can't provide something for cost plus, then don't provide it.

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I'm just curious what you think drives ticket prices? First of all the total profits the major airlines made during the 90s is attributable to their yield management systems which maximised revenue by constantly manipulating fares to get the most revenue from each flight. When I came to work we operated with load factors in the 40s. Some days of the week, and sometimes for whole months, we flew empty. Delta also had less than 4,000 pilots. It was yield management and a deregulated environment that lead to huge growth that is the reason many have jobs in the industry, possibly including Doug. I know it was a huge factor in me getting a job in '79. Delta was looking to grow in deregulation. I got hired and in just a year or so there were 500 guys behind me. Unprecedented. They had to run the training center around the clock.

This system really worked great through the 90s as the tech boom spurred business travel growth and the yield management systems made sure they paid a premium and kept the airplanes full on the non-business days by offering lower fares to get people in the seats. During that time the whole pricing system became transparent when it moved to the internet. Fares weren't such a mystery anymore. Anyone who wanted could shop days and times and instantly see what fares the yield management systems were offering.

All of this ran headlong into the downturn in business travel that probably started in 99. The booms of the 80s and 90s had driven airlines to rapidly expand. There were hubs everywhere, didn't matter, you could not not make money in that enviroment, even as thin as the margins were.

So a tsunami of too many hubs chasing a shrinking market of business travelers combined with a completely transparent and elastic pricing system runs into a growing LCC market and out of control costs and debt at the legacies. Now the airlines continue to try to generate as much revenue as possible using yield management in an environment where everyone is desperate to feed their hubs. Where being $5 above your competitor means a significant number of customers click on the other guy. Where every seat that goes out empty is a lost revenue opportunity forever.

Note that as soon as a legacy tries to get away from that system. Trying to stabilize prices and lure customers away from the internet bazaars, the immediate cost to the industry is in the hundreds of millions in revenues. Putting the lie to the idea that the legacies haven't been trying to maximise revenue. They've been doing it continuously since the 80s.

Back to "business 101". Which parts are you having trouble with? Basic supply and demand? The high elasticity of prices? Too many hubs leading to all of the legacies fighting for the same customers? Your suggestion that smart executives should just stop providing the service or product is well taken. It does need to happen. So which should throw in the towel first? Delta? United? Given that "business 101" tells all these people that if they can keep their businesses alive until some competitors finally capitulate and supply and demand stabilizes at price above cost, would it be good management to just quit now?

To borrow your phrase, I'm amazed that airline employees don't get this. How can people engaged in the industry not understand how critical yield management has been to the airlines making any profits at all? You go into any airport of any size and see every gate filled with the livery of every legacy carrier and yet not realize how desperate the competition is out there to fill seats? You have people who sincerely believe that the difference between the profits then and the losses now is that executives "remembered" back then to add enough on to "cover the costs." That system ended in 1978 with airline deregulation and guess what, even under that system some airlines couldn't make money.

And of course the biggest canard is the idea that it's the customers fault. Their misguided expectations about how much things really should cost is the whole problem. We all operate that way. I know personally when I'm comparing the prices that are being offered to me, the first thing I do is set a lower price level, below which I will not go, so I can insure that company makes a profit. I don't care that six or seven companies are fighting for my business. I just want to pay what's fair. Yeah, that's what's wrong with the airline business, dumb customers. Maybe a new marketing campaign. If you're dumb enough to want to save money on air travel, get the h*** off our airplane.