Matt D From United States of America, joined Nov 1999, 9502 posts, RR: 47 Posted (14 years 8 months 6 days 19 hours ago) and read 785 times:
Even though what prompted me to write this is under an existing thread, I thought I'd start a new one with some of my own 2 cents. There really isn't any one reason why new airlines go under. There are several, and it may be a combination of these that conspire to kill a new entrant.
1. Someone mentioned that many reasons many upstarts go under is inadequate funding. This is true, but not the only reason.
2. Mismanagement/short sighted corporate greed.
3. Over expansion too fast.
4. Fare wars with established airlines (anyone remember the tussle between Reno Air and Northwest a few years ago?)
5. This is a big one: ADVERTISING! Or more specifically, the LACK of it. If no one knows that a new airline is out, who is going to fly them? example...TriStar (flew BAe 146's out of LAS during '95-'96) Airlines. I had never even HEARD of them until I saw their planes and did some research. I never once remember seeing a TriStar ad on local TV, the newspapers or radio.
Incidentally, the first major US bankruptcy was (the original) Braniff International in '82.