US airlines have a surprise for you: A decade-long profitability streak
While the peanuts get staler and seats get smaller... the profits are growing. US airlines are about to post their 10th straight year of profits — that's their longest streak in over 40 years. Here's why it's shocking:
- 80%: The percentage of Americans who'd never flown on a plane in 1965 (air travel used to be a mega-luxury — now it's sweatpants).
- 1978: The year the Airline Deregulation Act passed. Before it, the government basically guaranteed airline profitability by limiting competition and keeping ticket prices high.
- 50%: The amount flight prices have fallen since Uncle Sam unleashed competition in the skies. Air travel is way cheaper now as low-priced carriers took off.
- $59B: The massive losses of the US airline industry from 1979-2009.
Experiencing turbulence... In 1974, an airline couldn't charge less than $1,442 for a NYC-LA flight. After deregulation, airlines struggled as cheaper absolutely-no-meal-included flights went mainstream. Then this happened:
Maintaining cruising altitude will be hard... It's not just less competition and a rising economy — airlines profited the last 10 years by cramping seats, charging your luggage, and barely paying crews more. But flight attendants read this Snacks too and want a piece of airline profits. Next year, airlines are set to negotiate with over 120K unionized airline employees (and their salaries are already airlines' biggest expense).