1 A Brief History of U. S. Commercial Aviation Regulation and Deregulation The U. S. commercial aviation industry was regulated by the government for a period of 40 years, beginning in 1938 with. the passing of the Federal Aviation Act, and ending in October 1978 when President Carter signed into law the Airline Deregulation Act (ADA). There were 16 airlines in existence when the Federal Aviation Act was passed in 1938 (the so-called 'trunk lines'). The Act established the Civil Aeronautics Authority (CAA) as the industry's regulatory body. The Act was passed principally because it was felt that the free market, if allowed to continue unregulated for much longer, would put many of these firms into bankruptcy. It is possible therefore to view the CAA of 1938 (re-organized into the Civil Aeronautics Board (CAB) in 1940) as a response to a potential market failure at the time. In the 1930s, few air traffic markets could have efficiently"supported more than one airline operating in the market [Panzar (1980)]. Competition among the carriers was cut-throat, and it was felt that the near bankruptcy of the airlines in the period was caused principally by the competitive bidding system used by the Post Office in allotting airmail subsidies [Keeler (1972), Caves (1962)].

Klappentext

The main aims of this books are to (a) assess and quantify the impact of U.S. air carrier network changes over the last 20 years; (b) develop an economic model of the airline firm taking explicit account of the role of network structure and organisation; (c) empirically test the model and use it to assess the relative efficiency of routes within a major U.S. carriers domestic system. Statistical measures such as the Gini index and entropy measure are used to assess changes in U.S. carrier networks from 1969-88. The economic model of the airline firm incorporates Gravity model estimates of potential air traffic flows on each route as a network variable`. By specifying a spatial autoregressive form for the model, the interdependence of each route (and accordingly, the indirect/connecting passenger potential) may be included. The model is tested using an extensive route by route data set obtained from Continental Airlines for the year 1987/88. Using frontier production functions, technical efficiency of the routes is evaluated and the characteristics of efficient and inefficient routes are described. In the book, the key role of the airline's network is high- lighted and readers are offered a new view of the firm which focuses this important component.

Inhalt
1: Introduction.- 1.1. A Brief History of U.S. Commercial Aviation Regulation and Deregulation.- 1.2. Critique of Other Studies.- 1.3. A Production Model of the Airline Firm.- 1.4. Measuring Technical Efficiency in an Airline Network.- 2: Previous Studies on U.S. Airline Deregulation.- 2.1. Economic Research on U.S. Airline Deregulation.- 2.2. Operations Researchers' and Transport Planners' View of Airline Operations.- 2.3. Geographical Aspects to U.S. Air Traffic Distribution.- 3: The Setting: Trends in U.S. Commercial Aviation.- 3.1. The National Airways System.- 3.2. Patterns in U.S. Commercial Aviation 196988.- 3.3. Measures for Summarizing Airline and Airport Traffic Distributions.- 3.4. U.S. Air Carriers 19691988.- 3.5. Continental and American Airlines' Traffic Patterns, 196988.- 4: Development of a Production Model of the Airline Firm.- 4.1. The Airline Network-Defining a Network Variable.- 4.2. The Airline's Production Function.- 4.3. An Alternative View of the Airline's Production Process.- 4.4. Functional Form of the Airline Production Function.- 4.5. Frontier Production Functions and the Measurement of Technical Inefficiency.- 5: Data Description and Computation of the Production Variables.- 5.1. Data Provided by Continental Airlines.- 5.2. Computed Input and Output Variables.- 5.3. Principal Components Estimates of the 'EQUIP' Variable.- 5.4. Gravity Model Estimates and the Route Attraction Variable.- 6: Production Function Analysis of Continental Airlines.- 6.1. Cobb-Douglas Production Function Estimates for Continental Airlines in 1987/88.- 6.2. Measuring the Efficiency of Continental's Route System and Exploring the Characteristics of Inefficient Routes.- 7: Conclusions and Recommendations.- 7.1. Network Changes and the Role ofNetwork Organization.- 7.2. Airline Level Analysis and Route Efficiency.- References.- Author Index.