Jabiman - you're not seeing the point. Airline returns are poor. Yields continue to decline. Capacity is outstripping demand...
The consumer wants a lower price - it is a virtuous circle:
- low fares;
- stimulate demand;
- increases scale;
- reduces cost by leveraging on scale/economies;
- increases capacity and growth; and
- drives lower fares to stimulate demand...
And the cycle continues.
If the costs don't come down with the increase in growth, or they go up exponentially, the lower yield that "simulated the demand in the first place" does not cover costs and revenues turn into losses = unsustainable = collapse.