Airline Regulation

Running head : Airline Industry

RE-REGULATION OF AIRLINE INDUSTRY

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Limited re-regulation by the government is important in ensuring a more competitive airline industry and to secure the interests of the consumers . In the United States the industry contributes 1 .5 trillion dollars as a result of the economic business alone and a contribution of around 700 billion annually to the country 's GDP (Eddy , 2010 . The deregulation of the industry in 1970s has however ensured the affordability of the flights despite the reduction of the quality of

the services offered . The very idea of deregulation was to allow competitiveness but national air carriers have monopolized the industry with mergers to drive out competition . However , re regulation of this industry to foster competition and curb anti-competitive behavior is necessary in ensuring the financial stability of the industry . This is supported by Bob Crandall who believes that the deregulation of the industry has really failed (Adam , 1998 . Indeed , he likens the airlines to utilities and admits the players should have controlled competition

These measures could include the government having a more active role in pricing and airlines being forced to use bigger jets in their operations . With the monopolizing of the industry by few players in national airports this has resulted into higher fares being charged by the few national carriers who are abusing their competitive advantage The fortressing of hubs by the main players to edge out other competitors should be as point of concern for the government . It...