Hard Landing.

Thomas Petzinger, Jr. Times Books, $29.50

"The state of our airline industry is a national embarrassment," said embittered Pan Am chairman Tom Plaskett in 1991, one day after his company had flown its last flight. Pan Am was but one of several major airlines, and numerous smaller ones, that failed in the competitive free-for-all following the 1978 Airline Deregulation Act. Thomas Petzinger, Jr., a reporter for The Wall Street Journal who once worked as a baggage handler, tells the story of the competitive war that left Plaskett so bitter and so many companies bankrupt.

Hard Landing is a vivid and detailed version of what is to some a familiar story, tracing the origins of the defining characteristics of modem air travel: spartan service, polarized pricing, addictive frequent flier programs, and "hubs." Unlike many dry analyses of airline deregulation, this book is foremost a tale, fashioned around the ambitions, schemes, and failures of the mercurial men who have dominated aviation for the last 30 years. Many legendary promotional tactics reflected their inclinations: stewardesses selected for their comeliness and dressed in hot pants, and "booze wars" intended to woo passengers with free liquor before airlines were allowed to compete on price.

The hero, such as there is one, is Herb Kelleher, the fun-loving founder of the enigmatic and consistently profitable Southwest Airlines. The primary villain is Frank Lorenzo, who led Continental into two bankruptcies and Eastern into disintegration. The fierce chairman of American Airlines, Robert Crandall, is a constant Machiavellian presence. The real story, then, is how some of the brightest (and most devious) minds in business exploited their new freedom to set any prices, serve any markets, and make any deals they wanted.

The most important and widely recognized result of deregulation has been, by almost every measure, lower airfares. A more controversial result has been pricing discrimination that metes out the lowest fares to the most flexible passengers. Petzinger relates how such advance-purchase discounts (or late-purchase penalties, depending on your perspective) were devised when American's Robert Crandall decided he needed a way to match the low fares advertised by other airlines, without having to offer every seat on the plane at that price. Another post-deregulation Crandall innovation--the frequent-flier program--has become such a powerful purchasing incentive that many travelers routinely go hours out of their way just to get miles on their preferred airline.

Petzinger zeroes in on one of the less public but vital battlegrounds in the war for passengers--the computer reservation system. American, which owns the Sabre reservation system that many travel agents use to book passengers, routinely listed its own flights ahead of other companies. That gave American a big booking edge, since travel agents often assumed the first flight was the fastest. There were other ghosts in the machine: At one point, discount fares offered by Continental did not appear on Sabre in 49 markets where American competed. The government eventually had to step in.

Unfortunately, some of deregulation's serious downsides get less attention. Petzinger says virtually nothing about the hundreds of small towns that lost jet service when the airlines were allowed to pull out of unprofitable markets. Many of those places are now served by turboprop flights that are adequate but often less comfortable and convenient than jets. Some towns have lost air service altogether. The competitive pressures fostered by deregulation also led to sharp pay cuts for mechanics and flight attendants, as well as for pilots at the lower end of the seniority scale, some of whom today earn as little as $7 or $8 an hour.

Petzinger also closes the book on deregulation too early. By 1995, he argues, a "final consolidation phase" had established a "delicate equilibrium" among the airlines. But recent merger talks could produce more consolidation and upheaval. And the current surge of low-cost startups like Valujet, Reno Air, and numerous lesser-knowns augurs a period of competitive brawls like those prompted by the likes of PeoplExpress over a decade ago. "The show is far from over," said Tom Plaskett as he bemoaned deregulation's fallout in 1991. That's probably still the case. Rick Newman is an associate editor at U.S. News & World Report.