Abstract
In the North Atlantic market, with carriers supplying far more seats than required by the passengers, a situation of over-capacity has been created. This made many international airlines to compete vigorously among themselves to get good share of the market by attracting the maximum number of passengers to fill as many of the empty seats as possible in a desperate move to receive new revenues; but that resulted in a deterioration in their financial results due to low yields and higher costs. The major aim of the work is to examine the state of competition occuring between international airlines, with many carriers coming to the market bringing or introducing innovative low fares, and to ascertain whether this competition has had any role in causing the over-capacity in the supply of seats and the overall influence on the industry. The work suggests formulating a remedial action of co-ordination between all those parties associated with the industry to reach a better multilateral understanding build on the optimal balance to serve the interests of all for the best of the whole air transport industry. The performance of the airlines and their financial stability need some form of regulation in off setting the results of deregulation and to refrain from extreme system of either way as the unilateral action by one party to impose its own views and practices can prove very difficult for others.