It all started back in 2008 when the industry was hit with ultra-high oil prices and tightening credit markets. This helped keep new players out of the industry and capacity in check — so no oversupply or pressure on pricing.

At the same time, high fuel costs lead to a wave of consolidation in the industry. Delta Airlines (NYSE: DAL) bought out Northwest in 2008, then United Airlines (NYSE: UAL) merged with Continental in 2010, Southwest (NYSE: LUV) purchased AirTran in 2011, and, finally American Airlines (NYSE: AAL) combined with US Airways in 2013. Now, these four airlines control 80% of the U.S. airline market.

Major airlines enjoyed a number of “good” years, with shares of Delta, United, and Southwest up more than triple the S&P 500 over the last five years.

Then, hedge funds and investment banks caught onto the story. Wall Street even created an exchange-traded fund last year to take advantage of the hype, the U.S. Global Jets ETF (NYSE: JETS). Funds have piled into airlines and started pumping the industry hype to retail investors. However, since then, airlines have been relatively dead money.

Shares of United Airlines have tumbled 14% in the last year and American Airlines has fallen 22%. But there’s still a lot of smart money in the names, yet, when investors realize that airline investing is still a fairy tale (just as it was for so many decades), there will be a mass exodus. This will put even more downward pressure on the space.

This comes as the promise of low oil as a tailwind for airlines hasn’t really worked out. Soon, airlines will fall back into their old ways of competing on price, which means lower prices for consumers, as well as lower margins for airlines. So, in a way, the extreme consolidation has taught the remaining players nothing.

What’s more is that consolidation doesn’t always work, case in point is United Airlines. This is the airline whose CEO recently returned to work after suffering a heart attack and getting a subsequent heart transplant.