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The merger of American Airlines and US Airways is the last significant move in the industry’s consolidation. Staggering losses in the 2000s forced airlines to restructure. They used bankruptcy to cut costs and unbundling to drive revenue. High oil prices made grounding planes sensible, which made raising prices easier. However, real capacity constraint was to be had through consolidation and the elimination of competitors. As a result, the industry is now back to profitability.
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