ABSTRACT
At the dawn of deregulation it was believed that the threat of entry by a new airline with new ideas and low cost structure would cause the incumbents to strive to fulfil customers' needs and wants at a price they are willing to pay, producing the highest obtainable total utility for the users. New-entrants started to appear soon after deregulation stimulating exciting changes in the market. Soon it became apparent, however, that the new-entrants had problems surviving as the post deregulation years passed. From 1978 to 1989 about 88 jet-operating airlines were formed (scheduled, charter and cargo) of which 83 failed, the survivors (scheduled and charterlscheduled passenger) being Southwest Airlines (est. 1967), Midwest Express (est. 1984), America West (est. 1981), Tower Air (est. 1982) and World Airways (est. 1948/scheduled services 1979). Another important fact is that of the scheduled and mixed (charterlscheduled) carriers only 26 operated for three or more years. Some of the failed airlines operated for much shorter period of time than three years and others under more than one name following stints of reorganisation attempts.
