It should be an industry in which it is easy to make profits, there are high barriers to entry the infrastructure and aircraft are expensive, there are not many routes that have more than 3 or 4 airlines and as people get richer they travel more and further.
For the legacy carriers the demand especially business travel, is tied to the economy so there is 5 to 10 year cycle in profitability. For LCCs the demand is price sensitive thus there will always be an emphasis on cutting costs.
Perhaps the industry is not as unprofitable as it would appear and it is using the current economic downturn to reform working practises that it inherited from a world where airlines were monopoly operators controlled by the state. This leaves employees in a difficult situation they have little market power and there is no shortage of new entrants willing to work at any wage