THE EVOLUTION OF U.S. AIRLINE COMPETITION. IN: AIR TRANSPORT

This paper reviews the evolution of the domestic airline industry since the late 1970s, when most regulatory constraints on pricing, entry and exit were removed. The competitive issues that have arisen since deregulation are examined along with the conclusions and consensus that economists have reached on these issues. Since deregulation, the industry has experienced a wave of new entry and mass exit, while survivors have reorganized to focus on hub and spoke operations. Movement towards economic equilibrium has been slow because the structure of the new equilibrium has not been clear. In the long run, the number of major airlines might be reduced to just a few, probably as a result of marketing devices that give strategic advantages to larger firms and incumbents operating hub and spoke systems. Policy makers need to make sure that efficient production and competition rather than anticompetitive marketing devices determine the winners and losers in the airline industry as it moves towards a new equilibrium.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/isbn/1840645490
• Supplemental Notes:
  • This paper was originally published in Journal of Economic Perspectives, 6(2), Spring 1992, pp 45-73.
• Corporate Authors:

  Edward Elgar Publishers

  William Pratt House, 9 Dewey Court
  Northampton, MA  United States  01060-3815
• Authors:
  • Borenstein, S
• Publication Date: 2002

Language

• English

Media Info

• Features: Figures; References; Tables;
• Pagination: p. 418-446
• Serial:
  • Classics in Transport Analysis
  • Issue Number: 2
  • Publisher: Edward Elgar Publishers

Subject/Index Terms

• TRT Terms: Airlines; Barriers to entry (Competition); Competition; Deregulation; Economic analysis; Equilibrium (Economics); Hub and spoke systems; Market structure; Marketing; Policy analysis; Pricing; Productivity
• Subject Areas: Aviation; Economics; Policy;

Filing Info

• Accession Number: 00961852
• Record Type: Publication
• ISBN: 1840645490
• Files: TRIS
• Created Date: Aug 22 2003 12:00AM