Airline deregulation

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Airline deregulation is the process of removing restrictions on airlines affecting, in particular, which carriers are permitted to serve particular routes. As with other forms of deregulation, the terminology is sometimes criticised, since new forms of regulation are commonly developed to deal with problems such as the allocation of the limited number of slots available at airports.

Airline services were historically heavily regulated, in part because of concerns about monopoly and oligopoly arising from the fact that, in most cases, only a small number of airlines serve a given "city pair" market by providing direct flights between the cities concerned.

Airline deregulation began in the US in 1978 with the Airline Deregulation Act. Many other countries have subsequently deregulated their domestic markets, and a similar process has applied to airline markets within the European Union. However, many international airline markets remain subject to tight regulation.

[edit] Airline deregulation in the United States

Prior to 1978, the Civil Aeronautics Board (CAB) controlled many aspects of domestic aviation in the United States. In particular, airlines required permission to serve any given route and incumbents could raise many obstacles to the granting of permission. The system was dismantled as a result of the Airline Deregulation Act.

(main article Airline Deregulation Act) this is how it takes place

[edit] Airline deregulation in Australia

Prior to 1990, Australia operated a ‘Two Airlines policy’ which effectively guaranteed the maintenance of exactly two airlines, one public (TAA, later Australian Airlines and then Qantas) and one private (Ansett), with almost identical fares, fleets and schedules. Discounting was only permitted to the extent that it did not necessitate an increase in standard economy fares. With the repeal of the two airlines agreement under the Airline Agreement Termination Act, which came into effect on 30 October 1990, this restriction was abandoned, along with limits on entry to the industry.

A number of unsuccessful attempts at entry were made, but the first successful new entry was Virgin Blue which was launched in 2000. Virgin Blue's entry, the subsequent fare war, and the decline in air travel following the September 11 attacks led to the collapse of Ansett and the restoration of a duopoly market.