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From the generation after deregulation of American airlines in 1978, countries and districts around the world gradually deregulated the aviation industry. The authorities of aviation industry permitted free entry and exit, and relaxed the restrictions on price, merging and competition (Harvard Business School, 1994). Many economists predicted that deregulation would improve the established airlines efficiency and consumers welfare through competition with newcomers of airline. Unfortunately, under the increased competition with low-cost airlines over the last two decades, established airlines are confronted with challenges that profits incurred fluctuant, especially in recession and war, they incurred massive losses, even bankruptcy (Harvard Business School, 1994). In contrast, a lot of new budget airlines are making profits steadily and attacking big established airlines that will probably go bankrupt. In this decade, many established airlines are trying to eliminate economic losses and regain the initiative by merging.

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