Compass airlines: 1 December 1990 to 20 December 1991 what went wrong?—part 1

Abstract

Economic deregulation of the Australian domestic aviation market came into force on 1 November 1990. One airline, Compass Airlines Pty Ltd, was prepared for entry well before this. Almost exactly one year on, with no other new entrants, Compass ceased operations. The debate on this event aroused intense public interest and there has been concern by some that this spelt the end of economic deregulation, with a return to higher fares. This paper presents and analyses the evidence and arguments about the collapse of Compass, focusing attention on the workability of deregulation and on the lessons to be learned by new entrants.

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