Why making a profit is dangerous for an airline’s stability
The industry has broken with its dismal profit trend but as BA has found out pilots and investors are aggrieved
10 September 2019 - 05:05
In the airline business there’s nothing more damaging to a company’s internal harmony than making a profit. The pilot strikes that have grounded almost all British Airways (BA) flights for the next two days are a case in point.
Unlike most industrial sectors, the usual state of affairs for airlines is spending vast sums of money for little return. (Warren Buffett famously opined that this makes the sector a trap for investors.) In one respect this lousy reputation is actually helpful: unionised staff won’t drive as hard a bargain for higher wages if they think it might make their employer go bust...
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