Consequences of E.U. Airline Deregulation in the Context of the Global Aviation Market

The objective of this article is to show the background of the airline liberalization process in the E.U. and to evaluate its economic effects in context of the global aviation market. To understand the pressures for change and the forms that the changes are taking, it is first necessary to ap-preciate why market regulation was thought important and how the U.S. de-regulated its airline industry. Therefore, Section II of this paper will analyze the different market structures in the U.S. and the E.U. In Section III, the discussion will continue with a consideration of the effects of U.S. airline deregulation. Section IV will give particular attention to the major legislative actions of the E.U. creating new international aviation law. Section V of this paper will examine whether liberalization in Europe has pro-duced identical results to that experienced across the Atlantic. Finally, the implications of the emerging European situation in the wider context of the global aviation market and possible competitive concerns are considered in Section VI.