Airlines lost nearly $60 billion in the 32 years since deregulation. A new paper by Severin Borenstein at NBER concludes that weak demand has been the biggest challenge, worse than fuel cost, taxes or competition.
Contrary to what you might think, legacy airlines like US Airways and Delta have been drastically cutting ticket prices to prop up demand.
Here’s a look at the real ticket price, including fees, since 1979. Flying has never been cheaper:
And here’s a look at GDP-adjusted demand. Will we ever recover from 9/11 and the Recession?
Ironically customers become angrier the more legacy airlines cut costs. Thus US Airways is the fifth most-hated airline in the world.
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