Deregulation and Liberalisation of the Airline Industry: Asis, Europe, North America and Oceania

Article excerpt

Dipendra Sinha, Deregulation and Liberalisation of the Airline Industry: Asia, Europe, North America and Oceania, Ashgate, Aldershot (2001), 176 pp, L39.95.

The author is an economist who provides both an overview of the world airline industry and a succession of case studies of deregulation in Asian countries, Australia and New Zealand, Canada, Europe, and the United States. Of the case studies, the United States looms largest, with almost half the book devoted to that country's experience.

The author provides a considerable number of useful and informative tables and statistics alongside what is largely a review, though by no means a comprehensive one, of the work of other scholars in this field. There is little in-depth analysis, but the author has the ability to summarise basic economic theory and apply it to the airline market. The book is mainly a narrative, reporting what other scholars have either argued or empirically discovered.

The overview of the international airline system is inadequate. There are some useful sections, for example the summary of the General Agreement on Tariffs and Trade and the General Agreement on Trade in Services, but often the author does not explain things properly. For example, the reference to the many bilateral and multilateral agreements that dominate the international airline system does not give enough of substance to inform the uninitiated about the industry's overall character. A brief outline, of both the Chicago conference's outcome and the main subject matter of subsequent bilateral agreements, i.e. in terms of air freedoms or rights, needs to be given. In addition, there should be a brief analysis of how the industry has changed since the 1970s (for example, the virtual demise of the International Air Transport Association's price fixing), when deregulation gathered pace.

In the chapter on Europe, when the author does mention more about the Chicago conference of 1944, the information is either inaccurate or misleading. The claim that the Chicago conference `led to the adoption of a general policy that a country would have only one airline' is difficult to reconcile with the fact that the United States, which was the dominant force at the conference, had a specific policy of encouraging more than one overseas carrier. Among other things, this was to break Pan American Airways' virtual monopoly of US foreign routes. Furthermore, Britain had three overseas carriers immediately after the Second World War: British Overseas Airways Corporation, British European Airways and British South American Airways. The claim that price competition was negligible because of capacity controls is also misleading. There were capacity controls, but, more important, IATA was used to set prices through tariff conferences. …