The evolution of network competition in transatlantic aviation and the effects of regulatory liberalization

Since the domestic deregulation of the U.S. airline industry in 1978, impacts to domestic stakeholders, including airlines, airports, labor and consumers, have been well-studied. International air transportation, however, has remained principally regulated by bilateral agreements between governments. Recent global movement towards international deregulation, including the U.S.-EU Open Skies agreement which took effect March 30th 2008, has revived the debate over the effects of regulatory liberalization in aviation. Our research contributes to the debate over regulatory liberalization with an analysis of its impacts in the broader transatlantic market. In this thesis we evaluate how competition in transatlantic aviation markets has evolved over the last decade and how regulatory liberalization has impacted service levels and competition in specific U.S. and European markets. In addition, we explore the extent to which various market characteristics impact transatlantic service levels. This research is conducted in four parts: (1) a stakeholder analysis, (2) a competition and market analysis of transatlantic aviation, (3) a review of the policy impacts since 1990, and (4) an econometric market analysis. In our stakeholder analysis, we find that increased competition is brought about by loosened restrictions on airline networks and by strengthening carriers financially through the availability of foreign capital and opportunities for cross-border mergers. Our market analysis reveals that, in aggregate since 2000, transatlantic markets have seen an increase in number of competitors.

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Aeronautics and Astronautics

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2009

Author dc:creator

• Cosmas, Alexander

Advisor dc:contributor.advisor

• Peter P. Belobaba and William S. Swelbar.

• Aeronautics and Astronautics.
• Technology and Policy Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/49560

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/49560