Why does the airline industry always need bailouts and government subsidies and operates very inefficiently?
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Air travel goes through boom and bust cycles in line with overall economic cycles — people and businesses cut discretionary travel in recessions, for example. Fuel costs are also super variable and have a huge impact on flight operating costs. But it’s hard for airlines to just cut unprofitable routes short term between locations because people have booked far out, because airlines have to bid/own gate slots, because of importance of having a network connecting smaller cities to big hubs. Having a functional network of flights and airports is critical to the economy as a whole, so the government sees it as beneficial to provide bailouts rather than have airlines decide it’s not profitable to fly into/out of second and third tier airports and cut off places like Omaha, Toledo, and Albuquerque
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