The airlines’ “capacity” and “profitability” margins kept prices low for consumers

Scott Phillips, chief investment officer of The Motley Fool, says the airlines’ “capacity” of higher profit margins has kept prices low for consumers making it a “tough industry.”

“This has been a horrible industry for 50 years because there was always just too much capacity compared to the profitability of those airlines,” Phillips told Sky News Australia.

“Which was great for us consumers.

“They didn’t lower prices to compete for seating capacity.

Individually, they said, let’s not add seats; why would you do that?

“Let’s make sure the planes are really full; let’s make sure we maximize profit per seat mile.”

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