{"id":15482,"date":"2019-02-23T08:15:40","date_gmt":"2019-02-23T08:15:40","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=15482"},"modified":"2019-02-25T11:02:01","modified_gmt":"2019-02-25T11:02:01","slug":"airlines-are-going-bust-in-droves-so-why-do-so-many-people-try-to-launch-them","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/airlines-are-going-bust-in-droves-so-why-do-so-many-people-try-to-launch-them\/","title":{"rendered":"Airlines are going bust in droves, so why do so many people try to launch them?"},"content":{"rendered":"

Loizos Heracleous<\/a>, Warwick Business School, University of Warwick<\/a><\/em><\/p>\n

Yet another airline has collapsed \u2013 this time<\/a> British operation Flybmi, costing almost 400 jobs as hundreds of flights were cancelled at short notice. It is the latest in a string of<\/a> recent European airline failures, including Air Berlin<\/a>, Alitalia<\/a>, Monarch<\/a>, Primera<\/a>, Azur<\/a> and Cobalt<\/a>. This is despite years of good growth<\/a> in worldwide air passenger demand, including<\/a> in Europe. So why are so many airlines going out of business?<\/p>\n

Aviation is an unattractive industry from an investor point of view at the best of times, notwithstanding the passenger growth. Aeroplanes are expensive assets with few alternative uses, which limits the ability of airlines to reduce their capacity during lean periods \u2013 compared to, say, a manufacturing business that can close a plant and lay off workers. Airlines also have to deal with fluctuating expenses like fuel, which accounts for around a third of total costs. There is also extensive regulation, combative unions, relatively low barriers to entry and the fact that travellers can so easily shop around.<\/p>\n