This factoid has been cited in enough business publications with enough supporting graphs and documentation that I believe it.
But it also doesn’t mean very much, because it mostly compares apples to oranges.
It is true that in the past few years the airline business has lost billions of dollars. Why this is true has a hundred explanations and an intrinsically flawed business model is just one of them.
Airlines have always been a precarious business. You can either have small airlines that cater to a small elite of customers or larger airlines that cater to the mass base, but either way you have an expensive way to transport a limited number of passengers. Combining the two models, as most major airlines do today, is extremely hard to pull off and seems to be the intrinsically flawed model people keep talking about.
But for most of the first several decades of airlines, the first model was in operation. For all their glamor and name-recognition, these airlines were relatively small businesses, just as Cadillac is a relatively small part of General Motors. Even if they made money, their profits were measured in tens of millions or less.
So a loss of tens of billions in a year, as has happened recently, could easily equal the total profits for the first several decades of flight. It’s true but it implies nothing about the airline business in those decades.
It doesn’t even say all that much about the business today. Or any business, for that matter. AOL Time Warner posted a formal loss of $99 billion dollars in the last year or two. That might wipe out all the profits from all tech firms since the invention of the PC. Does that mean that the computer (entertainment/news/television/tech/magazine) business is intrinsically flawed? It might be, for all I know, but this number doesn’t prove it.
Whenever someone comes out with a soundbite about numbers, believe nothing until you have taken apart all the assumptions behind the numbers.