Economics of the U.S. Commercial Airline Industry: Productivity, Technology and Deregulation
Economics of the U.S. Commercial Airline Industry: Productivity, Technology and Deregulation

Author: Ivan L. Pitt

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 200

ISBN-13: 1461550319

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Economics of the U.S. Commercial Airline Industry: Productivity, Technology and Deregulation illustrates the impact of upstream technological change in capital goods (aircraft and aircraft engines) on demand, productivity, and cost reduction in the U.S. airline industry for the years 1970-1992. The aim is to separate supply-side technology push from demand pull in determining investment in aircraft in the US airline industry. The focus of inquiry in this study is at the company level, so the measures are sensitive to company differences such as financial costs, payload, and existing aircraft inventory rather than industry averages. This monograph builds on the new developments in econometric modeling and has a substantial technical component. The quantitative results lead to implications for understanding technology and its impact on the airline industry, as well as for formulating regulatory policy.

The Evolution of the US Airline Industry
The Evolution of the US Airline Industry

Author: Eldad Ben-Yosef

Publisher: Springer Science & Business Media

Published: 2005-07-13

Total Pages: 316

ISBN-13: 9780387242132

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The Evolution of the US Airline Industry discusses the evolution of the hub-and-spoke network system and the associated price discrimination strategy, as the post-deregulation dominant business model of the major incumbent airlines and its breakdown in the early 2000s. It highlights the role that aircraft – as a production input – and the aircraft manufacturers' strategy have played in shaping this dominant business model in the 1990s. Fierce competition between Airbus and Boeing and plummeting new aircraft prices in the early 2000s have fueled low-cost competition of unprecedented scope, that destroyed the old business model. The impact of the manufacturers' strategy on these trends has been overlooked by industry observers, who have traditionally focused on the demand for air travel and labor costs as the most critical elements in future trends and survivability of major network airlines. The book debates the impact and merit of government regulation of the industry. It examines uncertainty, information problems, and interest group structures that have shaped environmental and safety regulations. These regulations disregard market signals and deviate from standard economic principles of social efficiency and public interest. The Evolution of the US Airline Industry also debates the applicability of traditional antitrust analysis and policies, which conflict with the complex dynamics of real-life airline competition. It questions the regulator's ability to interpret industry conduct in real time, let alone predict or change its course towards a "desirable" direction. The competitive response of the low-cost startup airlines surprised many antitrust proponents, who believed the major incumbent airlines practically blocked significant new entry. This creative market response, in fact, destroyed the major incumbents' power to discriminate pricing – a task the antitrust efforts failed to accomplish.

The Effects of Deregulation on U.S. Air Networks
The Effects of Deregulation on U.S. Air Networks

Author: Aisling J. Reynolds-Feighan

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 143

ISBN-13: 3642770614

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1. 1 A Brief History of U. S. Commercial Aviation Regulation and Deregulation The U. S. commercial aviation industry was regulated by the government for a period of 40 years, beginning in 1938 with. the passing of the Federal Aviation Act, and ending in October 1978 when President Carter signed into law the Airline Deregulation Act (ADA). There were 16 airlines in existence when the Federal Aviation Act was passed in 1938 (the so-called 'trunk lines'). The Act established the Civil Aeronautics Authority (CAA) as the industry's regulatory body. The Act was passed principally because it was felt that the free market, if allowed to continue unregulated for much longer, would put many of these firms into bankruptcy. It is possible therefore to view the CAA of 1938 (re-organized into the Civil Aeronautics Board (CAB) in 1940) as a response to a potential market failure at the time. In the 1930s, few air traffic markets could have efficiently"supported more than one airline operating in the market [Panzar (1980)]. Competition among the carriers was cut-throat, and it was felt that the near bankruptcy of the airlines in the period was caused principally by the competitive bidding system used by the Post Office in allotting airmail subsidies [Keeler (1972), Caves (1962)].

White House Studies Compendium
White House Studies Compendium

Author: Robert W. Watson

Publisher: Nova Publishers

Published: 2007

Total Pages: 544

ISBN-13: 9781600215216

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" ... brings together piercing analyses of the American presidency - dealing with both current issues and historical events. The compendia consists of the combined and rearranged issues of [the journal] "White House Studies" with the addition of a comprehensive subject index."--Preface.

The Airline Industry and the Impact of Deregulation
The Airline Industry and the Impact of Deregulation

Author: George Williams

Publisher: Routledge

Published: 2017-03-02

Total Pages: 180

ISBN-13: 1351895125

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In the fast-changing theatre of air transportation, the strategic development of airlines and the operating economics of scheduled airline services have been transformed, following the profound impact of US deregulation. The lessons gleaned from the US experience, including effective ways of constraining rivals, have quickly been adopted by carriers facing the opening up to competition of their own local markets. In addition, in response to the hunt by the successful US survivors for further international traffic, carriers have been forced to emulate certain tactics adopted by these megacarriers, virtually irrespective of their own government’s regulatory stance. The economics of the sector, particularly with regard to revenue generation, has resulted in increased market concentration. In the longer term, prospects for competition remain unclear, given the likely existence of only a small number of similarly endowed, globally alligned megacarriers. This book explores the impact of deregulation policies on key areas of the airline industry, analyzes the response of incumbent carriers to economic freedom and examines whether or not it is possible to devise a pro-competitive regulatory strategy for this sector. The author provides the reader with a clear explanation as to: ¢ why airline deregulation policies have produced a number of unanticipated outcomes; ¢ why low-cost new entrants have been unable to survive under deregulation; ¢ why the impact of airline deregulation has differed between the USA and Western Europe. Using this analysis as a basis, he explores the future development of the sector, indicating the likely future trends towards globalization. He also argues that a competitive marketplace is not a guaranteed outcome of full deregulation and suggests an alternative approach. The book is of special interest to those members engaged in the airline industry, regulatory authorities and government departments of transport and industry. It wil

The Evolution of the Airline Industry
The Evolution of the Airline Industry

Author: Steven Morrison

Publisher: Brookings Institution Press

Published: 2010-12-01

Total Pages: 188

ISBN-13: 9780815721208

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Since the enactment of the Airline Deregulation Act in 1978, questions that had been at the heart of the ongoing debate about the industry for eighty years gained a new intensity: Is there enough competition among airlines to ensure that passengers do not pay excessive fares? Can an unregulated airline industry be profitable? Is air travel safe? While economic regulation provided a certain stability for both passengers and the industry, deregulation changed everything. A new fare structure emerged; travelers faced a variety of fares and travel restrictions; and the offerings changed frequently. In the last fifteen years, the airline industry's earnings have fluctuated wildly. New carriers entered the industry, but several declared bankruptcy, and Eastern, Pan Am, and Midway were liquidated. As financial pressures mounted, fears have arisen that air safety is being compromised by carriers who cut costs by skimping on maintenance and hiring inexperienced pilots. Deregulation itself became an issue with many critics calling for a return to some form of regulation. In this book, Steven A. Morrison and Clifford Winston assert that all too often public discussion of the issues of airline competition, profitability, and safety take place without a firm understanding of the facts. The policy recommendations that emerge frequently ignore the long-run evolution of the industry and its capacity to solve its own problems. This book provides a comprehensive profile of the industry as it has evolved, both before and since deregulation. The authors identify the problems the industry faces, assess their severity and their underlying causes, and indicate whether government policy can play an effective role in improving performance. They also develop a basis for understanding the industry's evolution and how the industry will eventually adapt to the unregulated economic environment. Morrison and Winston maintain that although the airline industry has not rea

The Economic Effects of Airline Deregulation
The Economic Effects of Airline Deregulation

Author: Steven Morrison

Publisher: Brookings Institution Press

Published: 2010-12-01

Total Pages: 97

ISBN-13: 0815708068

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In 1938 the U.S. Government took under its wing an infant airline industry. Government agencies assumed responsibility not only for airline safety but for setting fares and determining how individual markets would be served. Forty years later, the Airline Deregulation Act of 1978 set in motion the economic deregulation of the industry and opened it to market competition. This study by Steven Morrison and Clifford Winston analyzes the effects of deregulation on both travelers and the airline industry. The authors find that lower fares and better service have netted travelers some $6 billion in annual benefits, while airline earnings have increased by $2.5 billion a year. Morrison and Winston expect still greater benefits once the industry has had time to adjust its capital structure to the unregulated marketplace, and they recommend specific public polices to ensure healthy competition.

Deregulation and the Future of Intercity Passenger Travel
Deregulation and the Future of Intercity Passenger Travel

Author: John Robert Meyer

Publisher: MIT Press

Published: 1987

Total Pages: 332

ISBN-13: 9780262132251

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This book surveys the latest changes in the turbulent area of airline deregulation. The authors' third collaboration on the subject, it deals with such current trends and topics as the proliferation of mergers and takeovers and the stategies and tactics involved in price wars and other marketing ventures.At the same time Deregulation and the Future of Intercity Passenger Travel is much more than an update on changes in the airline industry. It studies all the major systems of intercity passenger transportation - automobiles, buses, trains, airplanes - from the point of view of their interdependency. And it extends well beyond recent events to embrace the transportation history of much of this century, discussing the historical precedents and outcomes that have collectively given impetus to the trends in operation today, with special emphasis on the patterns of governmental subsidies and regulations. The authors also forecast probable developments in the next century, examining the impacts of various assumptions about future public policies, changes in technology, demographic patterns, and consumer preferences.The first part of the book focuses on the U.S. experience with airline deregulation, including changes in distribution channels and the travel agency business as well as the effects on airline employees and passengers. The second part takes up the economics of competition among the major modes in intercity travel.John R. Meyer is James W Harpel Professor of Capital Formation and Economic Growth at Harvard University. Clinton V. Oster, Jr., is Associate Professor at the School of Public and Environmental Affairs and Director of the Transportation Research Center at Indiana University. Deregulation and the Future of Intercity Passenger Travel is fifteenth in the series Regulation of Economic Activity, edited by Richard Schmalensee.

Taking Stock of Air Liberalization
Taking Stock of Air Liberalization

Author: Marc Gaudry

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 285

ISBN-13: 1461550777

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Taking Stock of Air Liberalization is about Technology, Economy, and Policy (TEP) in the airline industry. Ten years ago, the practical collaboration was begun of bringing together people who belonged to the complementary streams of economic analysis and policy analysis presented int his book. During this time, we opened discussions on the relationship between transportation technology, transportation economics and transportation policy under the general auspices of the Canadian Royal Commission on National Passenger Transportation. Working over a 40-month period (1989-1992), this Commission took stock of transportation and produced an up-to-date `État de la question' and policy framework (Hyndman, et al, 1992). Clearly, the project committee's discussions on air policy, over the period 1995-1997 (see Chapter 8), outlined the possibilities for a mechanism to understand the differences about the desirability of air liberalisation, as well as the possible TEP interactions in this area. This led to an exploratory first formulation and computer programme (HLB, 1997) incorporating the approach outlined in Chapter 15. A joint celebration of the CRT's 25th birthday and Transport Canada's 60th birthday seemed appropriate to bring together the various streams. Part I of Taking Stock of Air Liberalization looks at the record, and Part II focuses on specific impacts of policies. Policy formulation (Part III) and the required tools (Part IV - Modelling Demand) are also discussed in this context. The book ends with perspectives in Part V - The Future Market Structure and Public Policy. The competition among airlines is rapidly spreading to the competition among airports, and the difficult regulation of these strategic spatial monopolies (which is introduced in Chapter 13) is now attracting research activity. The next discussion in the airline industry will be the role of airports.