point of potential investments.
Until 1978, air transport rates were approved by the government, which meant that price was not a primary competitive factor. Instead, airlines would compete on service and image. The airline industry was characterized by giants (American, United, TWA) which offered nationwide and some international service, and by regional carriers, such as Southwest, which offered short trips between airports not served by the nationals.
The deregulation of 1978 introduced a situation in which the national and regional carriers were suddenly able to compete in an environment that resembled a free market. Rate schedules were lifted, price fixing was eliminated and route management was removed. The main factors that affected whether an airline could serve a particular city was whether or not that city had enough gates for the new carrier, and whether the carrier was able to afford to purchase them.
ValuJet is a low-priced airline that offers inexpensive tickets for regional travel. Based in Atlanta, the airline serves the Southeastern United States and competes with Continental Airlines as well as with other regional carriers. It serves 31 cities in its service region, and 19 states. Florida has been one of the airline's staple destinations; the airline began its service with flights to Tampa and Orlando from Atlanta in 1993. The no-frills strategy paid off for the fledgling airline, which posted half again as many revenue passenger miles in April 1996 as it did in April 1995. However, the company announced that it was slow
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