We can’t say that unprofitable airline is unsafe. Its reason is that if you ask that these airlines are unsafe, it means that you are asking these airlines to have empirical measures of the accident. No doubt, in order to cut their costs, these airlines try to cut the margins on engineering and some other operations. There are many ways to increase the profit of an airline. For example, you can increase the profit of an airline just by extending the operating hours between the services. Here, experts of cheap dissertation writing services will discuss unprofitable airlines.
The first and the most important reason for the failure of some airlines is that these unprofitable airlines continue to fly. Its reason is that an industry which is considered as an unprofitable industry should not continue its business. The owners of this industry should try to consolidate and rationalize their business and try to find out some better ways to do business. Most of the stakeholders can’t stop the business of unprofitable airlines because if they close these airlines, millions of people will lose their jobs and thousands of travellers will be disturbed. Mostly, government airlines are unprofitable because the government is providing some discounts from their residents.
The second cause which is becoming the reason for the failure of these airlines is high fixed and variable costs. There are many factors behind these high fixed and variable costs. First, these airlines are very expensive and the airline companies have to pay a huge amount as lease or loan repayments. The average lifetime of commercial jets is just 25 to 30 years only. Secondly, there require large labour forces in order to run the complex operations of these airlines. Thirdly, the payrolls of airlines are also very expensive. Fourthly, after the 9/11 incident, these airlines are also spending a huge amount on their security. Fifthly, the oil prices of the commercial jets are also very high.
The third cause which is becoming the reason for the failure of these airlines are the exogenous events that can suddenly affect the demands of these airlines. In these exogenous events, there come terrorism, political instability and natural disaster. No doubt, these exogenous events are drastically affecting the operations and demands of the passengers. Due to the 9/11 attacks, it is estimated that the US airline has to face a loss of almost $7.7 billion. Due to the closure of the European airspace, the European airline has to face a loss of almost $2.2 billion.
The fourth cause of their failure is the reputation for hassles and poor service. There are some airlines whose passengers have lengthy lists of the complaints. In these complaints, there come inconvenient schedules, cramped seating and poor services etc. Due to these poor conditions, it is almost impossible for them to charge an extra amount in order to earn some profit. Along with these unprofitable airlines, there are also some airlines that are earning handsome amounts. In these airlines, there come Delta airline, United airline, Ryan airline and Easyjet airline etc. The unprofitable airlines should follow the policies of these successful airlines in order to earn a profit.