(FORTUNE Magazine) – The market for luxury airlines just may not exist. Since 1983, five carriers have tried to win business away from the majors by offering amenities that first class, before deregulation, used to provide: French champagne, quails' tongues, stiff linen, plenty of legroom, and no riffraff. All five have pulled out. Now MGM Grand Air, operating three flights a day between New York and Los Angeles, stands alone. Even with the luxury market to itself, its 727-100s aren't sucking in any profits. Yet oh, how hard MGM is trying. Unlike predecessor Regent Air, which charged 2 1/2 times standard first-class fare, MGM, at $898 one way, is competitive. Where Regent relied on direct sales, antagonizing travel agents, MGM courts agents with generous incentives. Flights can be booked easily through computer reservation systems like American Airlines' Sabre. MGM's clientele is formidable. When Manhattan attorney Bruce Davis flew a birthday party of eight to Los Angeles for dinner, he found his return flight filled with ''powerful, bicoastal people,'' including Mary Tyler Moore and Sean Connery. Of the plane itself, configured to seat 33 passengers instead of the usual 110, Davis says, ''You get the ambiance of a chartered plane for very little more than first class.'' The food aboard was as good as his birthday dinner at trendy Spago. Why isn't the effort paying off? For one thing, the carrier's few mistakes have been costly. In December, intending to expand, it spent $16 million for three DC-8s and $7 million more for refurbishing. It then discovered the planes are noisy and stirred resistance among airport area residents. Factors beyond MGM's control have hurt, as well. ''The entertainment industry is vital to us,'' says Charles Demoney, MGM Air's president and CEO. ''The writers' strike had quite an adverse impact.'' -- A.F.