For the sake of argument I'm limiting this discussion to US based deregulated airlines with a decent business model. It seems that the market favors younger players in the airline business. Labor tends to be the biggest cost to an airline, and as employees gain seniority their salaries go up regaurdless of union/non-union status, so the longer an airline has been in business them more it pays its employees, all other things being equal. The next expense is the aircraft themselves. Aircraft have a finite lifespan, so every airline has to purchase aircraft from time to time, and as aircraft age maintenance costs go up, and newer designs of aircraft are almost always more efficient than the older aircraft in the same category, so the longer an airline is in business the higher its maintenance and fuel costs all other things being equal. On initial purchase of aircraft all airlines seem to be on equal footing. The final expense is technology, but all airlines neet to upgrade and develop technology about the same so I would count this as equal.
It seems that airlines with a good business model start off small; then grow fairly quickly acquiring aircraft, routes, and experience; then they level off for quite a while; then younger airlines come in with a similar or equally good business model and operate cheaper than the current airline, so the current airline shrinks, and may eventually die. Meanwhile the new airline consumes the old airline's routes and passengers and would grow until someone comes in to do it cheaper, thus starting the cycle over again.
It seems to work like about any ecosystem. The individuals are born; have an adolescent type growth; they stay stable for quite a while; then decline as other airlines actively devour their routes and passengers; then possibly fall to be divided among and absorbed into the surviving members during their growth phase.
I guess my real question, is this something that can be predicted? Over history could one assign an easily recogniziable status to an airline like "Birth" "Adolescent" "Mature" "Middle Aged" "Old" and "Dig A Hole"?
And if so, where would you place the current players in todays market?