wd of veneer aviation analysts have cabbaged on to the silly belief that these are a genre of companies that have been unfairly treated by that Evil Empire called 'Big Airlines'" (Aviation Systems Research Corporation, 1998, p. 1). Aviation Systems Research Corporation (1998) contends that the failure of start-up airlines have failed for reasons other than predatory competition from major airlines. "There are very few industries that can eat money faster with lower potential returns than the airline business" (Aviation Systems Research Corporation, 1998, p. 1). The findings of research performed by the Aviation Systems Research Corporation (1998) indicate that, "since deregulation, start-up jet carriers have mainly served to fill dockets at bankruptcy courts. With some notable exceptions, there has been little market support for such carriers" (p. 1).
Of all of the start-up carriers that attempted to break into large scale scheduled airline service between 1978 and 1992, only two survived. These two are America West, which filed for Chapter 11 bankruptcy protection before getting on track, and Midwest Express, a single-class (business) airline that used the deep-pockets of its parent Kimberly-Clark Corporation to carry it over the rough spots. By contrast, more than 40 start-up passenger carriers have failed since 1978 (Aviation Systems Research Corporation, 1998).
Subsequent to 1992 only Reno Air has been clearly a success as a start-up carrier. Reno Air, however, has since been acquired by American. Frontier and Air Tran continue to make a credible effort, while the remainder either have failed or are on the verge of failing (Aviation Systems Research Corporation, 1998).
There are several formidable problems confronting the start-up, single-class carrier. Among the more important of these problems are the following:
1. Start-up airlines cannot compete directly against established mega-carriers. "There are only a...