I recently overheard a discussion in which it was claimed that the airline industry has generated more losses than profits when we take its whole history into account.

This is basically a repeat of Warren Buffet's claim in 1999:

Here's a list of 129 airlines that in the past 20 years filed for bankruptcy. Continental was smart enough to make that list twice. As of 1992, in fact--though the picture would have improved since then--the money that had been made since the dawn of aviation by all of this country's airline companies was zero. Absolutely zero. Sizing all this up, I like to think that if I'd been at Kitty Hawk in 1903 when Orville Wright took off, I would have been farsighted enough, and public-spirited enough--I owed this to future capitalists--to shoot him down. I mean, Karl Marx couldn't have done as much damage to capitalists as Orville did.

That claim was still being repeated in 2006 in the Guardian:

It is often said that no one has made a profit from running an airline since the Wright brothers first took to the sky. Peter Morrell, a professor specialising in air transport economics and finance at the College of Aeronautics at Cranfield University, points out that this is not entirely true, as Ryanair and easyJet make money, as do some Asian carriers; in the US, however, airlines have made an overall cumulative loss over the past 120 years. Flying has always been about a kind of pig-headed denial of observed reality.

I wonder if this claim is true? Does it hold for both the US and the worldwide airlines?

(Note the claim is about the airlines themselves, and not about, for example, aircraft manufacturers.)

  • skeptics.stackexchange.com/q/14994/104 may be the "similar claim" you've read before, which talks about banks losing as much money as they make in the long term.
    – Golden Cuy
    Jun 1, 2014 at 23:43
  • The two claims are different. The first one is "There has not been a gross profit over the entire industry", and the second is that "Nobody has made a profit" - well, the second one is demonstrably false. Anyone who owns shares in an airline, received a dividend, and then sold their shares at the same price or higher, has made a profit from the aviation industry. Jun 2, 2014 at 3:16
  • nvm I missed the second part of the second claim where they line up with the first claim. Jun 2, 2014 at 3:26
  • @Oddthinking: What was wrong with the title? Jun 2, 2014 at 7:33
  • To my mind, the "airline industry" includes Boeing, bolt manufacturers and pilots. But when I read the claims, it seemed to me that they were talking about the airlines themselves: United, KLM, QANTAS, etc. I edited to try to avoid that confusion.
    – Oddthinking
    Jun 2, 2014 at 10:10

1 Answer 1


For the industry as a whole, limited as you said to airlines, I think this claim is true. This 2008 law review article provides a summary of profits from 1955 to 2008, and claims that "By the end of 1991, the U.S. airline industry had lost all the profit it had earned since data began being collected..." (427). This 2011 working paper confirms the dismal situation since deregulation of the industry in 1979, and adds continued losses through 2009.

  • 1
    It could be that the US airline industry has not been profitable, but this doesn't mind that the whole industry is unprofitable. It could be that people prefer to use european or other non-US companies instead.
    – SIMEL
    Jul 6, 2014 at 7:45
  • Ah, yes. My understanding of Buffet's claim was that it was for the US industry only, so that's what I researched. Given that the US market is about 1/3 of the world market, and that the pattern of profit/loss is similar for the world market, the odds are good that the claim holds for the world market, too. But I don't have specific numbers at hand.
    – szarka
    Jul 6, 2014 at 8:03
  • Presumably this means that some individual airlines have operated at a profit for some periods of their existence. The next question would seem to be "Are there any individual airlines that are net profitable over a run in excess of, say, thirty years?" (that span chosen to let them develop a mature pay structure, which presumably weighs established player down compared to new entrants). Jul 6, 2014 at 13:37

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