Prior to deregulation, the consensus among many economists was that removal of governmental barriers to entry and pricing for airlines would result in a healthy competitive environment, one perhaps approaching that of perfect competition. Destructive competition, whose purported existence gave...

Though the early 1990s brought about a proliferation of new entrant airlines, the late 1990s was an era of bankruptcies, liquidations and retrenchments for upstart airlines. Five new airlines per year emerged from 1990 to 1995. But from 1995 until early 1999, not a single new airline began...

This essay is divided into several sections:1. The first is theintroduction.2. In the second, we examine the empirical evidence of predatory conduct. We examine how major airlines behave in three scenarios: (1) major airline vs. major airline; (2) major airline vs. Southwest Airlines; and (3)...