When a chartered Imperial Airlines Constellation plunged into a swamp outside Richmond, Va., in 1961, killing 74 army recruits, the struggling nonscheduled airline industry seemed to crash with it. Irked by poor safety records, corner-cutting operations and complaints from tourists stranded when companies ran out of moneyand armed with a tough new law from Congressthe Civil Aeronautics Board cleaned house. Some 20 carriers went out of business, and the survivors were forced to adhere to rigorous standards.
Today, self-rechristened as "supplemental" airlines, the 13-company industry has bounced back to become the fastest-growing...