Earlier this year an important study came out, taking a look at the economic impact of liberalization. And I’ve been meaning to share it with you and talk a bit about what it means for our business.
Over the past 25 years, three main forces have radically changed the airline industry: the regulatory environment, airplane/aerospace capabilities, and airline strategies/business models.
First, changes to government regulations have been critical in shaping the airline industry. Since the deregulation of the U.S. market in 1978, we’ve seen a dramatic shift in domestic and international markets. And we’ve also seen increased liberalization – even “open skies” – in international markets. This freer market access has had the effect of intensifying airline competition and causing airlines to focus more on what passengers want.