Airline Deregulation Hits Airlines

30 years after deregulation most airlines lose money. While high fuel prices don’t help they have only played a role recently. The key factors are plummeting demand following 9/11 that left demand weaker in ’09 than it was in ’00 and large cost difference between legacy carriers (LC) and low-cost carriers (LCC). LC costs have remained 30% to 60% higher than LCCs since deregulation, and 40% higher in the last decade.