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

This paper describes the effects of deregulation on negotiated wage rates and employment levels of aircraft mechanics in the scheduled airline industry. Firm-specific data for the incumbent trunk airlines show relatively small changes in real wage rates since deregulation,and only recent increases in interfirm wage differentials. Employment growth rates, on the other hand, have varied widely among the incumbents, and between the incumbent trunks and the local service and new-entrant airlines. The data suggest that deregulation resulted in a transfer of 5000-7000 maintenance jobs from the incumbent trunks to the smaller airlines. This shift in employment reduced mechanics' earnings in the industry by as much as 5 percent.

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.

Effects of Deregulation on Safety provides a comprehensive overview of the safety experiences of these three case study industries and their implications for the U.S. nuclear power industry. The treatment of the subject is not highly technical, and hence is accessible to a wide range of readers with interests in the subject matter. The book draws on literature from roughly 250 references, ranging from brief news articles to book-length studies of deregulation in a particular industry, as well as original in-depth interviews with representatives of all three case study industries. This wealth of empirical background information allows the book to go beyond mere speculation about the possible adverse safety consequences of deregulation, to identify situations in which particular adverse safety consequences actually occurred. The experience of the case study industries indicates that economic deregulation need not be incompatible with a reasonable safety record, especially in those aspects of safety that are positively related to productivity. But that safety also cannot be taken for granted after deregulation. Careful management attention is needed in order to avoid the types of safety problems that were associated with deregulation in the case study industries.