That is the staggering economic reality for American Airlines, as detailed in this recent Fortune story. I’ve never understood the economics of the airline business and, finally, American CEO Gerard Arpey voiced in the Fortune story the fact that cannot be ignored forever:

“There is no business,” he said, “that can go on forever selling its product for less than the cost to produce it.”

Today we learn that American is taking steps to cut costs, including adding a new $15 fee for the first checked bag, laying off workers, and retiring a bunch of its MD-80s, which suck up incredible amounts of fuel.