Contestability and Deregulation in the Airline Industry

Abstract

The global airline industry is an important part of the world economy, because it is a major economic force for transportation, technology, manufacture and many other areas. Nowadays, air travel remains a growing industry and it continues to promote economic growth international investment, world trade and tourism. With low cost carriers providing direct services and hub-spoke carriers enlarging their network systems, the airline industry has shown dramatic development over the past 20 years. With the airline industry developing faster and faster in a competitive market, a global market gradually formed. In order to achieve seamless travel, the airline industry uses alliances, which permit member carriers to share profits through a formula-based system and offer extensive code-share options for its customers. As a result, an airline can offer greater value to passengers by extending its network with other airlines.