Out of that list of reasons the airline industry would be so profitable, some do point toward healthy profitability in the form of risk premium (profit which ca

Out of that list of reasons the airline industry would be so profitable, some do point toward healthy profitability in the form of risk premium (profit which can be used in a corresponding volatility buffer), but some support factors of pathological profitability. For instance, the high degree of regulation has costs, but it also makes it far more do difficult for competitors to enter the market. Regulation is especially profitable in an industry like aviation where the major airlines are known to exert a great deal of control over their regulatory body, even compared to other industries. Commoditization can also increase profits, by providing another barrier to entry; when flights are compared (automatically) by price, new firms have less opportunity to distinguish themselves and the economy of scale and start-up costs are especially painful for a hypothetical new airline. In a working economy, competition is the check against profiteering; all of these factors making it difficult to run an airline ensure that nobody else can start, regardless of how profitable it would be to do so.