They don't make money because they compete on fares, which is because that's all most people care about. Those who care about luxury just fly first, but that's a small percent of the market. Even most people in first got there via free upgrades.
After deregulation, especially in the advent of low cost regional carriers, there have simply been too many airlines. Bankruptcies and consolidation are going to take care of that very soon. This happens all the time in new industries (and the airline industry is effectively new since deregulation reshaped it so much).
After deregulation, especially in the advent of low cost regional carriers, there have simply been too many airlines. Bankruptcies and consolidation are going to take care of that very soon. This happens all the time in new industries (and the airline industry is effectively new since deregulation reshaped it so much).