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The economic impacts of air transport liberalization


  • Grancay, Martin


Air transport liberalization constitutes a whole new level of globalization. The impacts it brings can be divided into direct, indirect, induced and catalytic. The magnitude of impacts is determined by various factors, including air transport liberalization multiplier, market saturation and the degree of liberalization of other sectors. Airlines profit from increased efficiency derived from economies of scale, economies of scope and density economies. On the demand side, the passengers enjoy better range of available destinations, higher frequency of service and new business models, such as was the entrance of low-cost carriers to the EU market in the second half of the 1990s.

Suggested Citation

  • Grancay, Martin, 2009. "The economic impacts of air transport liberalization," MPRA Paper 16590, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16590

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    References listed on IDEAS

    1. Button, Kenneth & Taylor, Samantha, 2000. "International air transportation and economic development," Journal of Air Transport Management, Elsevier, vol. 6(4), pages 209-222.
    2. Forsyth, Peter & King, John & Lyn Rodolfo, Cherry, 2006. "Open Skies in ASEAN," Journal of Air Transport Management, Elsevier, vol. 12(3), pages 143-152.
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    Cited by:

    1. Anushka Wijesinha & Deshal de Mel, 2012. "Liberalization of Air Services in South Asia: Prospects and Challenges," Chapters,in: Regional Integration and Economic Development in South Asia, chapter 5 Edward Elgar Publishing.

    More about this item


    air transport; liberalization; multiplier; elasticity;

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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