DEREGULATION: A FACT OF LIFE FOR TODAY'S AIRLINES

The impact of deregulation is considered, comments are made on financing for re-equipment and it is noted that in the future, airlines will be operating on an unregulated oligopoly. Price deregulation was the most significant element in trunk operations in 1978. When a market is price elastic, a percentage reduction in price will produce a percentage increase in volume that is greater than the percentage drop in price. Evidence suggests that the trunks would not have fared nearly so well in the particular environment of 1978 in terms of revenue and profile without the injection of price competition. U.S. airlines will face the problem of obtaining an estimated $60 billion for fleet replacements in the 1980's. Three specific developments are noted: fares generally are being made toward industry consolidation into fewer but stronger companies as competitive pressures increase the attractiveness of merger; and the excuse of Iranian oil reduction is being used to prune high/cost routes.

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  • Corporate Authors:

    Reinhold Publishing Division, Penton/IPC

    600 Summer Street
    Stamford, CT  United States  06904
  • Authors:
    • Stanley, M M
  • Publication Date: 1979-5

Media Info

  • Pagination: p. 27-28
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00197176
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 28 1979 12:00AM