Yet the survivors, including United, transformed themselves into more efficient carriers, in many cases based on the sacrifice of their employees, and began to recapture market share. But this edge, too, proved short-lived. In response, carriers such as American, Delta, and United undertook major corporate restructuring aimed at reducing costs and improving efficiency. The subsequent events surrounding the ValuJet tragedy appear to have taken a toll on new entrant carriers and their sources of funding. In fact, Southwest alone has 63 new aircraft on order for domestic service and, due to the long range capability of this equipment, aggressive price competition is expected in many new markets.
Similar forces are at work in Europe s recently-deregulated internal aviation market.
This is not to say, of course, that all of these new entrant carriers are guaranteed to prosper in the increasingly mature domestic aviation market. Indeed, as in any mature market, the prospects for new entrants naturally depend on their ability to create and offer a product that is different, better, or cheaper than what is already available. Some urge government to handicap the competitive strength of the network carriers from curtailing some kinds of vigorous price competition to even imposing direct output or capacity restrictions, purportedly to level the playing field. Others more directly ask the government to bestow on them special favors. And there have even been suggestions that the government should get back into the business of simply dictating fares and capacity.