Deregulation of the Airline Industry

Abstract

Airline transportation is an indispensable part of the world economy. The deregulation of the airline industry has received much attention as it has historically been regulated. Since deregulation, this industry has improved in many ways. At the same time, deregulation also negatively affected carriers. This paper surveys the empirical literature on the airline industry, using the U.S. airline industry to analyze the effect of deregulation. The research primarily looks at the merits and demerits of the deregulation of the airline industry, and analyzes changes using industrial organization theory. In this paper, six main issues are addressed: background, achievements, market structure, competitiveness, welfare, of the U.S. airline industry, and the global airline industry. Through a thorough analysis of these six issues, this paper will review the path of deregulation and reform in the airline industry. Keywords: Airline