What: NPR’s Planet Money podcast
Episode: “The Friday Podcast: The Nasty, Rotten Airline Business,” originally aired on Dec. 9
Recommended by: Kurt Batdorf, Snohomish County Business Journal editor
The pitch: American Airlines recently became a member of a club it hoped never to join — major airlines that have declared bankruptcy. Before American came Pan Am, Delta, United, Northwest, US Airways and Continental.
Sure, fuel costs are high and planes expensive, but why is it that the industry continues to lose money year after year? By economist Severin Borenstein’s count, domestic airlines have lost $60 billion in the last three decades.
Even airline executives don’t deny it. Bob Crandall, the former CEO of American who’s famous for calling it a “nasty, rotten business,” says he used to tell his employees not to buy the company’s stock. Why? “Because airlines don’t make money,” Crandall says.
In this episode, Crandall tells Planet Money contributing editor Alex Blumberg and associate producer Caitlin Kenney why running an airline is so darn hard, and Severin Borenstein explains why all these bankruptcies are actually good news for us, the passengers.
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