> From its deregulation in 1978 to the end of 2025, the airline industry has cumulatively lost money: its net profit over those 47 years sits at negative $37 billion.
That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits. My understanding is that before regulation, routes were allotted by the government. So an airline might own New York to Boston, so they didn't have to compete. Obviously de-regulation changed that.
The article doesn't go into it, but unions are also a challenge. Much of the airline industry is unionized. So you have situations where pilots that have been there a while get a lot more money. You have people doing essentially the same job but some are getting paid 3x as much just because they've been there a long time. In most industries, there is higher pay for senior talent, but that's because they're more effective at their job, and produce higher output. In this case it's just a legacy cost that makes some airlines incredibly uncompetitive through structural features.
A race to the bottom on pilot pay won't help anything. Well it may lead to less qualified pilots. You can ask Boeing how well screwing over labor has worked for them if you like.
All US airlines have the same labor costs for pilots and it isn't their highest cost anyway. That would be fuel.
If you want to divvy up costs that way: Boeing is probably the biggest problem. Both them and Airbus eat up all possible excess profit on the back end via the cost for airliners. Break up Boeing, bring back competition in airliner manufacturing. People who want to screw over labor don't usually frame things in those terms for some reason.
How exactly does Boeing drive up the cost? The cost of the aircraft is less than 20% of the lifetime cost of operating an airliner and a lot of the maintenance cost is not related to the cost of parts from Boeing, since most parts that get replaced on an aircraft are not made by Boeing and airlines do not go through Boeing to buy them.
For US commercial airlines it is my understanding that there are effectively no non-union pilots. That's good for the pilots (higher wages), but bad for the flyers (higher ticket prices).
> was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits.
That's because this assertion is economically illiterate. Deregulation can lead to increased profits where otherwise companies have monopoly power. But often, the regulation was there in the first place to ensure that companies had sufficient profit to invest in expensive infrastructure. (E.g. railroads).
For passengers, yes, but primarily it’s poor for passengers because the infra is owned by freight companies that aren’t interested in passenger service. And rail freight service in the US is mostly pretty good.
And, at the time, they needed a lot of rail across huge distances. The transcontinental rail lines were hugely expensive and had immense amounts of graft involved in every step of their construction, but they got built. Also enabled the crushing of Native Americans, which was a usually-somewhat-tacit (though sometimes very explicit) goal in Washington.
The U.S. has the best rail infrastructure in the world. It’s just designed for moving cargo across what used to be the world’s largest industrial center instead of moving passengers around.
The second sentence of your article addresses my point:
> As tourists and students studying for a semester we aren’t going to interact with electrical or plumbing related infrastructure that acts behind the scenes as long as it works. The infrastructure we are most concerned about as people traveling is transportation, specifically passenger transportation.
The U.S. isn’t a tourist country and hasn’t optimized its rail infrastructure for moving tourists around. Its infrastructure is optimized for moving raw materials and finished products around a huge single market.
The US, before deregulation, had a whole lot of railroads going bankrupt. This was partly because factories closed but the railroad couldn't abandon the line that served those factories, because of regulation.
I mean, they are still regulated, and they still have to go through regulators to abandon a line (IIUC), but it's much faster than it was.
> That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits.
It really depends on the market. In a potentially competitive market, deregulation can work as a function to drive down margins.
Air travel is such a market. Prior to deregulation, routes were set by government action and competition was limited. With deregulation, it's not that hard to setup a commercial scheduled airline, and new airlines popup relatively frequently to address routes where there is margin. It doesn't take that much capital to start an airline; you can lease the aircraft and contract out maintenance (might be part of the lease) and start with a single round trip per day. You don't need to start with a big network or a lot of aircraft. It's not so easy to get slots at busy airports, but you don't have to start there either.
Where deregulation ends up leading to outsized profits is where the market leads to natural monopoly and regulation provides an upper bound on margin, rather than a lower bound. Things like last mile utilities, where it's difficult to run multiple networks in the same space: ex water, sewage, electricity, telecom. In situations like that, to promote competition you want to do regulated unbundling, so there's one organization that runs the last mile and choices for service over the last mile: ex you pay the last mile for delivery of water per acre foot and also your water supplier who must deliver the same number of acre feet to the water network. (or probably a little more, water networks have shrinkage)
That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits.
I've held the belief that an occasional bankruptcy is basically a sign of healthy competition within an industry: those companies going down literally didn't know how to be any more efficient or they could've survived.
Regarding airline business, a crapload of more people are flying now with better prices than before the industry was deregulated. Sure it must hurt someone at one end, eventually. Part of the business is standing through price wars because someone will always lose: the best companies can endure that. While airline industry probably fluctuates as described in the article there are plenty of other cyclic industries. Churn itself isn't anything new.
The article does discuss union collective bargaining agreements and labor cost structure in several sections.
> Labor costs might seem variable, but they’re actually not: pilot, flight attendant, and mechanic compensation in the United States is governed by the Railway Labor Act of 1926 (which was extended to airlines in 1936), which stipulates that collective bargaining agreements don’t actually expire but rather remain in force until they’re replaced. So even your wage bill is more or less fixed over multi-year horizons.
> Chapter 11 bankruptcy protection—which allows a company to continue operating while it restructures its debts under court supervision—is practically the only mechanism by which an airline can renegotiate its rigid cost structure, from aircraft leases to collective bargaining agreements. Oftentimes this renegotiation takes on a rather predatory character. When United Airlines filed for bankruptcy in 2002 in the aftermath of the September 11th attacks, it terminated its pension plan...
> So Chapter 11 is a relief valve for airlines struggling under the weight of their fixed costs; but it doesn’t really do much to help the system as a whole. For airlines, bankruptcy rarely culminates with liquidation; airlines that emerge from bankruptcy proceedings, having voided pension obligations and rejected aircraft leases, can operate at a fundamentally lower cost basis than their competitors. So bankruptcy doesn’t really restore the industry to a competitive equilibrium that can cover the cost of capital: it resets the floor at a lower level, from which a new round of ruinous competition can begin.
Airlines are popular employers specifically because they offer a clear vision of future pay increases and better, more prestigious, schedules. People, especially pilots, are willing to put up with a lot early on because they are confident that sticking with the plan will eventually allow them to earn double and triple their early-career salaries.
Same thing happens in law, investment banking, etc... the hardest workers are often the youngest and least-paid. They do it because they know big money may come later.
Of course rules are circumvented. Maybe even frequently. But that doesn't mean on the margin none of this stuff has an impact and is not worth the effort.
It's the whole "kids are going to drink anyway so I may as well buy them booze" brain rot.
It looks like mutual funds pass the gains, and the tax, onto those holding shared of the mutual fund.
> Because mutual funds are pass-through vehicles, they are required by law to distribute most of these gains to shareholders each year. These are called capital gains distributions.
Other types of funds don't necessarily have this problem, or lessen it.
> Holding mutual funds inside an IRA, 401(k), or Roth IRA shields you from annual tax bills.
> Index funds: Passive funds trade less frequently, leading to fewer gains.
> Tax-managed funds: Specifically structured to reduce taxable events.
> Exchange-Traded Funds (ETFs): Use an “in-kind” redemption mechanism that avoids triggering taxable sales.
> other than the should-be-illegal process of putting debt on the acquired company's balance sheet.
This is silly. No different than buying a house w/ borrowed money based on using that house as collateral.
Banks aren't stupid. If it's very likely to fail and the interest doesn't cover the risk, banks won't risk. There's typically no upside to banks. At best they get their interest and at worst they lose everything.
Even a cursory familiarity with the history of the industry shows both that this is untrue but also that it’s leaving out many of the core reasons why finance is regulated. Bankers do make mistakes, but also their focus is on what makes them a profit now rather than what’s good for their client or the country long term. The bank does not care if GameStop goes bust as long as that happens after the loans are repaid or, most likely, sold. None of the guys who sold incredibly dodgy mortgages—if you weren’t in the market in the late-2000s, they would literally let applicants pencil in their income and not check it—went to jail for packaging those mortgages up so many times removed that they couldn’t reliably prove the loan even existed and reselling them with inflated ratings, and absolutely none of them had to repay their bonuses. Once they found a buyer for an “AAA” derivative, foreclosure was a problem for the retirement fund left holding it after a couple of sales.
That’s what I’d expect here, too: they’ll make some flashy announcements to juice share prices (“AI powered auctions paid in crypto!”) and sell that debt, spin whatever’s left into a subsidiary which splits off, and then profess complete surprise when that goes bankrupt.
> Even a cursory familiarity with the history of the industry shows both that this is untrue
The modern trend of believing that “history” is made up of one or two things that everyone saw on the news is actually really entertaining. Definition of “cursory understanding” tbh.
The banking industry, historically is far from stupid.
This particular story is just basic PR driven market manipulation and has nothing to do with the banking system.
> The modern trend of believing that “history” is made up of one or two things that everyone saw on the news is actually really entertaining.
It would be useful if you could provide a more detailed version of your argument. I don’t think you seriously believe that banks don’t make mistakes but the way this is written does sound like you’re saying it’s highly unlikely while ignoring the other half of the sentence you quoted.
I think you’re missing a basic fact here. No bank has offered to finance this deal.
Furthermore, historically, banks generally don’t make mistakes. You can find news stories from over the years showing that some banks have made some mistakes, but that would only reinforce my general point about people confusing one or two things they see in the media with “history” as a whole.
It is different. You need somewhere to live. Buying a second home with what would presumably need to be at least a 90℅ mortgage is at best questionable.
Why can companies access and share information more easily than consumers?
I get about a dozen fliers in the mail every week advertising deals that are surely loss leaders for the grocer. Then there's extreme couponing forums.
Have you worked in a large organization? I can't imagine it's easy to coordinate much less have someone make actual decisions.
There is no monopoly. Grocers are incredibly competitive and have low single digit margins (~1-3%)
There are things you can do to lower prices like prosecuting theft. In this case technology is part of the solution. Adding red tape and restricting technology will do the opposite.
I think McDonalds dynamic pricing is great. Every time I checkout the app there is some crazy deal. Sure its not always something I want but I'm not necessarily competing w/ the other items on the menu. If there's no deal on something I want, I check BK or similar chains.
Am I right to conclude all these AI platforms that do things like code review are just increasingly irrelevant wrappers around the top models? No one is actually training or even fine tuning models at this point, right?
I remember when you had to put in these little hacks like to get LLMs to reply to complete the phrase:
me: England
llm: London
me: France
llm: ?
And on every iteration you need less and less clever engineering. At this point I don't even need to specify where to look for things, the LLM will just figure it out. And my overly specified prompts sometimes even hurt me as it's too narrow. I think I read that Harvey for law for instance actually scores worse on legal exams than just using the models out of the box.
These companies that build rails for these system and use clever prompts can't be adding value. And if they are, they'll have to completely re-engineer everything every 6m when a new model comes out.
There is value in rails for sure, but those will likely be general rails like Open Claw and even that will be incorporated into the base layer
I don't think the GP is calling contributor guideline restrictions a form of DRM.
I think the GP is focusing on:
> I guess we're giving up on the idea that you're free to do whatever you want with software you own? ... But I see this as no different from DRM and user hostile
If I clone an open source git repository, I should be free to point an LLM to review it in any way I choose. I can't contribute code back, but guess what, I don't want to. I want to understand the codebase, and make modifications for me to use locally myself. I don't have a dev team, I have a feature need for my own personal use.
The LLM enables that. The projects that deliberately sabotage the use of LLMs cease to be providing software that meet the 'libre' definition of free software.
I think the other way to think of it is: You're still free to do whatever you want with a the repo. The restriction is happening on the LLM's end, so ultimately it's the LLM's fault, so use a LLM without the restriction you want to avoid.
> The projects that deliberately sabotage the use of LLMs
They don’t though. They add a mild inconvenience for users of a specific restrictive AI provider which has bizarrely glitchy checks.
In a way they are doing you a service if you are this serious about libre software you shouldn’t be using a closed platform which employees dark patterns to begin with.
> Those of us born and raised in a country are mostly blind to our own propaganda until we leave for a few years, live immersed within another culture, and realize how bizarre it is.
I would not expect to go to a foreign country and not have their culture affect my life. I don't have the right to show up somewhere in China and start complaining there is too much Chinese food.
What is a country to you? You call it "propaganda". Is there some neutral set of human values that is not "propaganda"? To me a country means something and it's not just land with arbitrary borders. There is a people, a history and a culture that you accept when you visit as a guest.
Why wouldn't you want AI to promote your countries values? This will be highly influential in the future. You want your kids interacting with AI and promoting what exactly?
> Why wouldn't you want AI to promote your countries values?
Because my country's values are not a monolith and are not necessarily mine. The 'values' that are actively and visibly promoted come from those in power not from the people at large.
Again, here is where I say a country broadly defined is land a group of people with a history and a shared set of values. Politicians or rich people can't control values. They can try to impact them. But it's out of their control as its organic.
The good news for you is that there is competition in AI models. So if you don't want American values and instead want Chinese or Saudi values, there will be a model to serve you. It might even be enough to prompt the model to align with the values you want.
Where you are wrong is about controlling values. Axioms, incentives, and rhetorical framing are not "organic" in that they happen without a controlling force. See Prussian education, Rockefeller medicine, and your good ol' idiot box.
That was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits. My understanding is that before regulation, routes were allotted by the government. So an airline might own New York to Boston, so they didn't have to compete. Obviously de-regulation changed that.
The article doesn't go into it, but unions are also a challenge. Much of the airline industry is unionized. So you have situations where pilots that have been there a while get a lot more money. You have people doing essentially the same job but some are getting paid 3x as much just because they've been there a long time. In most industries, there is higher pay for senior talent, but that's because they're more effective at their job, and produce higher output. In this case it's just a legacy cost that makes some airlines incredibly uncompetitive through structural features.
https://www.thrustflight.com/united-airlines-pilot-salary/
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