Bankruptcy is better than a merger. Or that’s what U.S. airlines seem to think.

Almost every U.S. legacy carrier has been through a bankruptcy at some point; many have been through Chapter 11 twice.

And things, once again, are turbulent.

After racking up $35 billion in losses and finally emerging from a five-year slump in 2006, you would think the major carriers, suffering partly due to the threat of low-cost competition, would see the sense in consolidating.

Two of them did. Delta and Northwest said in April they would merge to create the world’s largest airline.

You would think more talks would follow. They did. You would think more mergers would follow. They didn’t.

Merger talks between United Airlines and Continental Airlines picked up steam after the Delta-Northwest deal. Continental pulled away, and the talks died.

Then, merger talks between United Airlines and US Airways picked up steam. The airlines have now decided not to merge amid concerns about labor opposition and integration costs.

But the industry is expected to lose $7.2 billion this year. Oil prices have hit all-time highs, roughly doubling in the past year. United CEO Glenn Tilton sees the fuel bill for U.S. airlines going up by $20 billion this year. Some airlines are raising fares and charging passengers for one checked bag. Let’s face it — times are bad. In fact, times are terrible. 

Still, they refuse to consolidate. Perhaps bankruptcy is easier? In bankruptcy, they’re off the hook for plane leases and labor contracts. In fact, in many ways, it’s the best time for them to merge.

And, unlike the auto industry, where a bankruptcy would be brutal for sales, airlines operate just fine during Chapter 11. Air tickets don’t need a warranty of any sort, and many passengers are usually unaware they are flying a bankrupt carrier when they travel.

In fact, seven small airlines have filed for bankruptcy or stopped operating in the past five months.

And that trend will continue unless the industry cuts capacity. Several airline executives have said there is too much capacity in the U.S. skies. And the “Open Skies” agreement, which eases barriers on Trans-Atlantic travel, will only increase capacity. As more foreign arilines will come into the United States, they will increase competition and lower prices.

For now, the airlines may think they can stick together and raise prices like one big, happy family. But ultimately, if oil stays where it is and consumers get more options, the airlines could once again find themselves facing the Hobson’s choice: merger or bankruptcy.