YB writes:

While it seems that some low cost airlines including Denver based Frontier Airlines were working some very thin margins, this article from the economist hints that fear and hope may be the primary drivers behind major airlines merger talks. From the article,

“Alitalia may experience a similar fate unless a takeover by Air France-KLM, sabotaged by unions and Italy’s newly elected prime minister, Silvio Berlusconi, can be revived. Nothing links these airlines, which span every conceivable business model in aviation, other than their inability to cope with the brutal economics of the business, especially the near-doubling of fuel prices in the past 18 months.”

And I thought that having LaValle’s hit $3.47 / gallon was crazy! Tough economic times hit those that are skating on thin ice first. And let’s be clear, gas prices were only one piece of the story that took these companies down

Brian Regan has his own ideas about what’s going on at the airlines…

photo credit

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