Airline Deregulation: The American Experience and Prospects for Europe
AbstractThis paper provides an exhaustive discussion of the impact of airline deregulation in the U.S., followed by a discussion of the likely effects of deregulation in the EU. The paper argues that the benefits of U.S. deregulation, as manifested in lower fares, were generated in part by the reorganization of route structures into hub-and-spoke networks. The same reorganization is identified as a means for improving airline efficiency in the EU, which is currently far below that of U.S. carriers. Such an efficiency improvement is necessary if EU deregulation is to lead to lower fares, as in the U.S. However, the paper identifies convenient rail service, which reduces the willingness of passengers to undertake circuitous airline trips, as one impediment to the formation of hub-and-spoke networks. Another impediment is airport congestion, which is more serious in the EU than in the U.S.
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Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 149.
Date of creation: 01 Jan 1997
Date of revision:
Find related papers by JEL classification:
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
- F00 - International Economics - - General - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
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