How can airlines move billions of people and still make almost nothing?
[Repost from AirLab] Airlines are projected to make a record USD 41 billion next year. That sounds massive until you divide it by passengers. The profit comes out to about $7.90 per person, less than what Apple makes on a phone case. Apple earns over $150 per iPhone sold. Hotels often run margins between 20 and 40 percent. Credit card companies sit at around 25 percent. Software companies can exceed 70 percent. The net profit margin of the industry remains unchanged at 3.9% in 2025. (it never went higher then 5%) In my days at WestJet in revenue, we'd hit some quarters of 10-12%, and we were considered one of the best in the world! Of course, next quarter, it would dip to -3%... Everyone around air does well. Airports, credit cards, aircraft manufacturers, loyalty programs, and booking platforms all extract value. Airlines carry the risk, absorb the disruption, and operate on margins under 4 percent. This explains why fees keep rising, service feels thinner, and policies get stricter. It is not greed. It is survival in an industry that has almost no room for error. When you see air this way, expectations shift and strategy gets clearer. What changes in how you think about air when you realize how little airlines actually make per passenger?