IMPACT OF DEREGULATION ON INVESTMENT AND PRODUCTION STRATEGIES IN THE COMMERCIAL AIRCRAFT INDUSTRY

The impact of the Airline Deregulation Act of 1978 on the U.S. aircraft manufacturing industry is investigated. The ways in which the removal of fare and route restrictions precipitated a restructuring of the investment and production strategies of the two major domestic airframe manufacturers are explained. On the basis of a series of interviews with informants in the airline and aircraft manufacturing industries, it is concluded that deregulation has affected the commercial aircraft industry in four significant ways: (a) fleet analysis procedures were transformed following deregulation, (b) the emergent hub-and-spoke system precipitated major fleet reconfigurations, (c) there was a rise in manufacturer and institutional financing and leasing agreements, and (d) airlines were saddled with aging and multiple-model fleets. Manufacturers have responded to these developments by assuming an increased share of the risks associated with aircraft acquisition, incorporating customer concerns in aircraft design, and reducing capacity while increasing productivity.

Language

  • English

Media Info

  • Features: References; Tables;
  • Pagination: p. 37-42
  • Monograph Title: Public-Sector Aviation Issues. Graduate Research Award Papers 1993-1994
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00712971
  • Record Type: Publication
  • ISBN: 0309061180
  • Files: TRIS, TRB
  • Created Date: Oct 10 1995 12:00AM