TECHNOLOGY AND DECISION MAKING IN THE AIR TRANSPORT INDUSTRY

This article is a review of the literature and synthesis of factors involved in the innovation process in commercial aeronautical technology, which begins with new technological developments in aviation and culminates in the commercial use of new aircraft. The theses that arise from this review are the following: (1) new aircraft technology is developed exogenously--beyond the control of the air carriers, (2) technological developments are subsequently embodied in new aircraft at times dictated by competition among airframe manufacturers, and (3) given the nonprice nature of competition in the airline industry, the airlines are competitively induced to seek new aircraft and buy new aircraft that become available. In addition short discussions are provided of what may be called permissive factors in decisions about airline flight equipment such as the rate of traffic growth, rates of return, and aircraft-operating economies. The article concludes with a short discussion of how and why investment decision making about airline flight equipment may follow a different investment mode, stressing technical economic efficiency, during certain periods. /Author/