How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry
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.
"How Airlines Market Work...Or Do They? Regulatory Reform in the Airline Industry," is forthcoming as a chapter in Economic Regulation and Its Reform: What Have We Learned?, edited by Nancy Rose and published by University of Chicago Press. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
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?, Rose. 2014