To summarize...

Airlines are hoping for a miraculous rebound in traffic that would allow them to raise fares and restore profitability. But many industry officials say it is more likely that several carriers will have to shrink either through bankruptcy proceedings or mergers that eliminate redundant back-office and maintenance operations and give them stronger networks and pricing power.

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The current crisis has exposed huge failings in several areas, including the hub-and-spoke system used by all carriers except Southwest Airlines. As airlines trim flights, small cuts in the system have an exponential impact on profitability.

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The biggest hurdle for airlines is labor costs, which now amount to more than 35% of the expenses at hub-and-spoke airlines. In recent years, unions have enjoyed a run of huge contract victories, exerting pressure with work slowdowns, sick-outs, overtime-refusal campaigns and an occasional strike.