They are recycled through the industry. The start of one's airline management career can be traced to their very first business disaster. Most businesses, with the exception of government agencies, require performance and results. The shareholders demand it as do your customers.
When the future airline management jacks up something at company "X", he is let go and gets a job with regional airline "A" in strategic cost management or some such crap. He then will climb the cubicle ladder until he reaches his greatest level of incompetence. Then he will change job titles, perhaps even airlines, until he rinses and repeats. This person will now have to stay with the airlines as a career. Since all airlines are broke or claim to be, a reputable company will not hire on someone lacking the ability to make the company profitable. Most CEO's do not want their managers only claims to fame to be:
1. The employees distrust me.
2. My company never made a dime while I had something to say about it.