Billion … with a B

February 28, 2006

Tonight’s local news (Detroit) showed some footage of Northwest Airline pilots, picketing at the airport today, for what they believe are unreasonable concessions demanded by the company. Unfortunately for Northwest’s pilots, as the market becomes more competitive, demand for any particular airline becomes more elastic - and consequently, the power of the unions is greatly diminished. Need I remind them that NWA lost 2.6 billion dollars in 2005?

That’s “billion,” with a b

Or, in other words, about as much money as Southwest Airlines turned in profit during the same period.

Of course, despite the fact that most airlines lose money hand over fist, and require massive federal bailouts, Southwest has turned a profit, if I’m not mistaken, every year of its existence. Southwest is the product of a competitive, deregulated market, whereas Northwest is a dinosaur, struggling to find sustenance in the economic “ice age” of competition.


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