Airline ‘capacity’ and ‘profitability’ margins kept prices low for consumers

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The Motley Fool’s Chief Investment Officer Scott Phillips says airline “capacity” has been higher than profitability margins which kept pricing down for consumers making it a “tough industry”.

“This has been a terrible industry for 50 years because there has always been way too much capacity relative to the profitability of those airlines,” Mr Phillips told Sky News Australia.“Individually they’ve said, look let’s not add seats; why would you do that?

“Let’s make sure the planes are really, really full; let’s make sure we maximise the profit per seat mile.”

 

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