Warning: vanity alert. I am as vain as the next academic, although I like to think I at least have the decency to be a little embarrassed by it. So stop reading here.

Holman Jenkins of the Wall Street Journal writes on the airline mergers, and notes:

We hesitate to tax a newspaper reader with theory, but a theory that fits is University of Chicago economist Lester Telser's "empty core" — which describes certain peculiar industry structures that are incapable of equilibrium.

Let's take it slowly: Businesses don't exist unless they can cover their costs, and yet airlines exist. Indeed, until Scotty gets the transporter beam working, commercial aviation is a hugely valuable product without a close substitute. But profits are chronically elusive. Why? To oversimplify, because the seats must fly whether they are empty or full, so competitive pressure drives carriers to provide more seats than they can fill and then to fill the seats by cutting fares close to marginal costs — i.e. the cost of a bag of peanuts and the wear a passenger's posterior inflicts on the upholstery.

Now before there was a University of Chicago, another industry faced a similar set of dynamics — scheduled ocean shipping. Steamship operators who were unfettered by certain modern regulatory notions devised a solution to the circumstances they encountered: They engaged in price fixing.

Such price fixing did not make scheduled shipping excessively profitable, but it did discourage shipowners from cutting rates below cost to fill up their ships before their scheduled departures. And their customers actually benefited, because it made the reliable service they sought economically viable.

William Sjostrom, of National University of Ireland, Cork, is your economist of authority here.