SOME PROBABLE EFFECTS OF DEREGULATION ON AIRLINE INDUSTRY ECONOMICS

The larger U.S. airlines will probably continue to face severe economic difficulties throughout this decade. The reason for this pessimistic projection is that the established carriers will face a prolonged erosion of their overall profits (in relation to their costs) from sustained low-fare competition by low-cost specialist carriers that entered the air transportation industry after deregulation. This erosion of profits could be exacerbated not only by the expansion of low-fare, new-entrant passenger carriers of various specialty categories, but also by the diversion of heretofore profitable belly cargo to the vertically integrated services of specialist freight, mail, and package-express companies. The conclusion drawn here is that the danger of deregulation in the longer term may be in producing the opposite of what it intended; for example, less competition, half a dozen mammoth air transportation companies, and few small- or medium-sized carriers above the regional carrier category.

• Record URL:
  • http://onlinepubs.trb.org/Onlinepubs/trr/1984/958/958-001.pdf
• Summary URL:
  • http://scholar.google.com/scholar_lookup?title=SOME+PROBABLE+EFFECTS+OF+DEREGULATION+ON+AIRLINE+INDUSTRY+ECONOMICS&author=J.+O'Callahan&publication_year=1984
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• Supplemental Notes:
  • Publication of this paper sponsored by Task Force on Economics of Air Transport. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.
• Authors:
  • O'Callahan, Juan C
• Conference:
  • 63rd Annual Meeting of the Transportation Research Board
  • Location: Washington District of Columbia, United States
  • Date: 1984-1-16 to 1984-1-20
• Publication Date: 1984

Media Info

• Media Type: Digital/other
• Pagination: pp 1-3
• Monograph Title: Issues in air transport
• Serial:
  • Transportation Research Record
  • Issue Number: 958
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Airlines; Deregulation; Economic impacts; Profits
• Subject Areas: Aviation; Economics; Highways; Planning and Forecasting; Society; I10: Economics and Administration;

Filing Info

• Accession Number: 00391035
• Record Type: Publication
• ISBN: 0309037042
• Files: TRIS, TRB
• Created Date: Dec 30 1984 12:00AM