How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry
NBER Working Paper No. 13452
Following a brief review of the U.S. domestic airline industry under regulation (1938-1978), we study the changes that have occurred in pricing, service, and competition in the 28 years since deregulation. We then examine some of the major public policy issues facing the industry: (a) the sustainability of competition and volatility of airline profits, (b) possible market power of dominant airlines, and (c) congestion and investment shortfall in the airport and air traffic infrastructure.
Published: How Airline Markets Work…Or Do They? Regulatory Reform in the Airline Industry, Severin Borenstein, Nancy L. Rose, in Economic Regulation and Its Reform: What Have We Learned? (2013), University of Chicago Press