The combination of these factors means that for an airline to succeed it must manage costs more efficiently. In conjunction with this, airlines have narrow profit margins implying that airlines have restricted cash flows in the event of an input price increase. The increased competition has also made it so airlines cannot easily pass on costs to consumers. However, it has not had the same favorable effect on airlines. These have worked out as a tremendous advantage for passengers. Due to competition, the price premium that airlines are able to charge has fallen 20% over the past two decades ( Borenstein, 2011). However, airlines are still having a difficult time staying profitable. The total number of travelers has more than doubled since deregulation of the U.S.
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