Assess the direct and indirect costs as well as the advantages and disadvantages of airline deregulation

Assess the direct and indirect costs as well as the advantages and disadvantages of airline deregulation.

To answer this you should research for a few hours and find a direct
cost impact on the industry or people who lives deregulation touched.
Then find an indirect cost impact on the industry or people. A cost
can be dollars. A cost can be lives saved. A cost can be jobs created.
A cost can be jobs lost. But, find a fact, data, over time. How much
time? That is totally your decision. It should be enough years so that
you can spot a trend. Remember these policies do not impact people’s
lives the minute that become law.

Deregulation of airlines involves lifting the price and entry and exit restrictions on

airlines. In the past, airlines were strictly regulated by governments in terms of entry and

prices, controls on mergers and the number of seats and carriers. This led to

inefficiency in the airline industry, limited consumer choices and high prices. Many

countries have deregulated their airlines like the US and UK. However, airline industries

in some parts like the Middle East are still heavily regulated.

Impact of airline deregulation

Since the United States deregulated its airlines in 1978, the travel fares started

decreasing and today, the fare is significantly lower than that paid in 1978. The fares

reduced by approximately 30 percent in 1990. Travelers save about five billion to ten

million US dollars every year in air travel (Button 1991). .

Airline safety also increased. The number of airline accidents has reduced since

the deregulation of airlines. There were concerns that airline deregulation would lead to

reduced safety due to increased competitive pressures. However, there is no evidence

showing the reduction of airline safety. In order to succeed in the competitive industry,

airlines understand that they have to maintain a good safety reputation so that they can

attract customers (Morrison and Winston 1986).

Deregulation meant that airlines could operate on any route and set their own



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