Several things are working against airlines:The mentality of the airlines is that if they don't match each other on price, they will lose the customer to the competition. That is why you see the airlines rescind any fare increase they try to take if one competitor doesn't match them.Customers are so used to paying low fares from airlines trying to fill up empty seats that a majority wait to buy until a fare sale comes along or decide not to travel. Airline travel is more discretionary than someone who has to drive to work, store, etc.There is lots of money out there that for some reason think starting an airline is a great thing (romanticism?). Why do you think there are always start-up airlines waiting in the wings that think they can do things better than current operating airlines. Heck, the Skybus founder is already talking about starting up another airline!
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