The Friendly Skies Of Deregulation

 

With airlines dropping like wounded mallards, the talk in the last few months has focused on the problems of deregulation. Often overlooked is the fact that deregulation has let a whole covey of new airlines take wing. Some 22 new regional and national airlines have been formed since the 1978 Airline Deregulation Act took effect, compared with none in the five years before deregulation.

The new carriers have not had an easy time of it, but they do enjoy some advantages over the older airlines. For one, they generally are not saddled with union contracts and can compensate employees with, say, profit-sharing benefits instead of high wages.

The most successful also have managed to carve out unique market niches. Houston-based Muse Air, for example, is only for non-smokers, and Chicago's Midway Airlines shifted nimbly from nofrills service to higher-priced service for business travelers.

"Deregulation created an opportunity that wasn't there before, and it's making those who were there smarter," says Michael L. Muse, president of Muse Air. "That kind of competition is good for any business."