however, dropped 44.8 percent to $383.9 million by 1990 (Collins, 1991b, p. 252). At the same time that increasing operating costs and price discounting was eroding operational profitability, depreciation on the new aircraft ordered by the airlines was increasing enormously (Standard & Poor's, 1991, p. A1. Industry depreciation in 1987 was $1.5 billion, while depreciation for all of 1991 was $2.5 billion (Collins, 1991b, p. 252). Increased depreciation charges will push the industry as a whole into a negative profitability situation for all of 1991, as the estimated industry net loss for the year is $270 million (Collins, 1991b, p. 252). The industry net profit margin in 1987 was 4.4 percent, while the net loss in 1991 is projected at 0.6 percent. The industry is projected to return to marginal profitability (twopercent net profit) in 1992, and to increase its net profit margin to 3.5 percent by 1996 (Collins, 1991b, p. 252). Total longterm debt in the airline industry in 1991 is $10.8 billion, or 0.9 times shareholder equity (Collins, 1991b, p. 252).

The plight of many individual carriers is much worse than the average conditions for the industry. This point may be illustrated through an examination of profitability at six of the nation's major trunk carriers in 1991American Airlines (the largest American carrier), Continental Airlines (the fourth largest American carrier), Delta Airlines (the third large

Research hypotheses will not be developed or tested with respect to the above research questions. Statistical hypotheses will test the data collected for these hypotheses. These statistical hypotheses will be used to eliminate, if possible, the null.

Mandel, M. (1987). You can't bank on deregulation. Dollars & Sense, (10), 912.

6. How has the airline nearmiss frequency changed since 1979?

259). Depreciation increased from $81.8 million in 1984 to 623 million in 1988. Subsequent to 1988, the carrier has reduced its depreciation charges by selling much of its newer aircraft. Continental appears "to be holding its own" under Chapter 11 protection; however, there are no firm estimates on when the airline is likely to return to profitability (Collins, 1991c, p. 259). Continental's longterm debt exceeds that of American. At the end of 1989prior to Chapter 11 filing, the carriers longterm debt was $4.9 billion, or 9.2 times the company's negative equity at that time (Collins, 1991c, p. 259).

Operating profitability reached a postderegulation peak 15 percentat USAir in 1984 (Sharav, 1991c, p. 266). By 1990, the carrier reported an operating loss; however, for 1991, an

1. How have airline fares changed from 1979 to 1992?

Deregulation in the American Economy

Collins, Bridget A. (1991c, 28 June). Continental Air. Value Line Investment Survey, 259.

3. Has the number of airline destination cities changed since 1979? If the number of destination cities has changed, how and to what extent has the number changed?

Collins, Bridget A. (1991b, 28 June). Air transport industry. Value Line Investment Survey, 251252.

largest American carrier. Continental, Pan American, and USAir had, in 1991, sought protection from cre