Although sympathetically written Matt, I absolutely disagree wth your analysis. There are many highly profitable airlines around the world, who operate effectively without subsidy. The US market is massively distorted. The airlines fought for "de-regulation", meaning they can charge what they like and have little or no regard for the cosumer, but they do not want to compete in a genunely deregulated market. They lobby hard to prevent foreign owned competitors, they fight any attempt to allow normal business rules to apply to them. For examle, state attorney general's consumer protection divisions cannot enforce actions against airlines. They also seek anti-trust immunity to allow them to have local monopolies and take over competitors and block them out from their fortress hubs. It is from this position of power and control that the airlines are able to abuse their customers. It never ceases to amaze me that people in the US, strong advocates for free markets internationally, accept this status quo in their domestic air market and put up with the abusive practises. The airlines are the new robber barons and they seem to be getting away with it.
The banrkruptcies of the major airline groups are due to poor management. AA stayed out of bankruptcy for decades... but their decision to file had more to do with their desire to rip up the employee agreements that they themselves had signed than for normal ecoonomic conditions. They are immune from the consequences of their bad management. Normally a badly managed airline would fail and a hungry more efficient start up would replace it. Here, instead they are saved and continue, after walking away from their obligations. The system encourages bankruptcy. Delta, US Airways, United and American have all benefited from this bizarre system, whilst peddling the myth that this is the 'only way" .
On the specifics, Virgin have behaved abominably and I am shocked. During times of crisis, such as New Orleans or Sandy, (both once in a century scale disasters), people have to resort to self help. In this case, the airline could not get them back in a timely fashion and they set out to find their own way via Chicago or Philly. In such circusmstances, it is immoral to profit from the disaster and this is precistely what Virgin have done. Has America lost its moral compass? Making money from a disaster on the scale is repugnant.
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