It looks like I did a smart thing in buying a new bicycle recently—maybe I’ll have to start traveling on a bike instead of an airplane, at the rate we’re going. Two airlines have gone out of business in just one week: Aloha Airlines a few days ago, and now ATA Airlines. Increasing costs, such as rising fuel prices, or competitive factors are making it increasingly difficult for airlines to stay in the skies, forcing them into bankruptcy.

Both Aloha and ATA Airlines were small in comparison with some of the airline industry giants, and thus did not benefit from the economies of scale of other airlines. Yet there are other small airlines that are not feeling this kind of pinch, even in this difficult financial environment. What makes the difference? Is it mismanagement? Lack of demand?

ATA Airlines claims that the loss of a “key contract for our military charter business” is what pushed them over the edge. Aloha Airlines said that it was a victim of “predatory pricing” from Mesa Air Group’s lowcost go! airline. These are certainly valid reasons, and in the end it comes down to one tragic fact: these airlines simply couldn’t compete.

The capitalistic business world is the ultimate crucible of truth and efficiency. The strong will survive and the weak will perish (barring any government bail-outs, that is). Neither ATA nor Aloha had built their airlines to be flexible enough to change with the times or strong enough to withstand the times. Sure, there are many smaller factors that go into the demise of a company, and often little failures build up over time to become a big failure mountain that buries the company, but usually the collapse of a company can be boiled down to a lack of flexibility and financial stability. It is sad, but true, and unfortunately now a few thousand newly-unemployed people are looking for work, and we can only hope they find it with more resilient companies.