ABSTRACT
Following airline deregulation in the United states, many new airlines entered the market, causing airfares to plummet 40 per cent in real terms between 1978 and 1997, and more than doubling the number of passengers. Airlines like Southwest were able to successfully expand, while new low-cost carriers like America West, Reno Air, and People Express emerged with varying degrees of success. With North America experiencing a wave of low-cost carrier start-ups following US airline deregulation, Europe experienced a "second-wave" of low-cost carriers following the liberalization of European airspace. Both Air Canada and Delta launched low-cost carriers that utilized employees from the mainline carrier. Ticket distribution costs are another major area where the entire airline industry is attempting to reduce costs. Another central focus of success for low-cost airlines is a high level of aircraft utilization. Since an aircraft is not earning money while sitting on the ground, the more an aircraft is flying, the more passengers the airline can carry.
