Airline regulation and deregulation

This chapter examines why the airline industry was historically heavily regulated, explores the reasons for deregulation and discusses the implications of deregulation and liberalisation for airlines and consumers. Special attention is given to the reasons for, and implications resulting from, the 1978 Airline Deregulation Act in the United States which stimulated other countries to deregulate (or liberalise) their airline markets. The liberalisation of the European market and other world markets is also examined. The chapter shows how the removal of economic regulations governing market access, competition and fares actually required the creation of new regulations concerning consumer affairs and environmental protection. The chapter concludes by considering future developments in air service deregulation around the world.