Airline bankruptcies are a tale as old as time. Southwest has lost a historical cost advantage it once enjoyed, as its labor costs per seat have risen by 32% while competitors have used bankruptcy to beat expenses down. Today, southwest’s labor costs exceed its competition by 10-20%. Unless they can collectively find a way to get passengers to pay more, labor is looking at a haircut, by cooperation or force. We discussed this and more on Tuesday’s Power & Money with David Asman.
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