Yahoo! News – Airlines Fear

Yahoo! News – Airlines Fear Collapse Without More Help

The debt-ridden U.S. airline industry will be near ruin if the government does not help it reduce costs related to aviation security, the chief executive at the world’s biggest carrier warned Congress on Tuesday.

The airline industry, or at least the part occupied by the major carriers, suffers from unsound economics. The situation is only going to get worse for them in the short term as regional and discount carriers further undermine their crumbling business models. In the longer term, Air Taxi service is likely to erode the big carriers margins even more. Bailing out the industry now, in toto, would be a huge waste of money.

I’m not sure the best thing to do, but one possibility is to just let it ride until some of the weakest carriers fail or are forced to merge with healthier carriers.

Sure, travellers might be faced with more expensive tickets, but its better in the long run that the industry is sustainable.