Have you flown in Europe? If you have then you know the US airlines are way overpriced.
As for Razor thin margins, United made $379 million in profit in Q3.
The airline industry already has huge barriers to entry. Airplanes are really expensive, but in the US that is just part of the cost. We also have the exorbitant cost of government regulation that drives up ticket prices. Now I'm not saying all regulation is bad, just that the TSA is a huge waist of space. The combined IQ of all TSA agents almost makes a functional adult.
Because of these added barriers to entry, if all the airlines in the US suck, no other airline can come along and displace them. This has the added benefit that if one airline is in trouble, no new company can fill the void. Thus, we the tax payers have to bail them out or lose large travel areas.