Air Transport Liberalization and Its Impacts on Airline Competition and Air Passenger Traffic

By Xiaowen Fu, Tae Hoon Oum, Anming Zhang. Transportation journal, 2009

233 citations recorded by the source corpus.

This study examines the impacts of air transport liberalization policies on economic growth, traffic volume, and traffic flow patterns, and investigates the mechanisms leading to those changes. Our investigation concludes that (1) liberalization has led to substantial economic and traffic growth. Such positive effects are mainly due to increased competition and efficiency gains in the airline industry, as well as positive externalities to the overall economy; (2) liberalization allows airlines to optimize their networks within and across continental markets. As a result, traffic flow patterns will change accordingly. Strategic alliance is a second-best solution and will have a reduced role when foreign ownership restrictions are relaxed; (3) there is a two-way relationship between the expansion of low-cost carriers (LCCs) and liberalization. The rapid growth of LCCs leads to increased competition and stimulated traffic, calling for the removal of restrictions on capacity, frequency, pricing and entry. In addition, development of LCCs in domestic markets can promote liberalization policy for international aviation by increasing the competitiveness of the national aviation industry. On the other hand, the existing regulations hindered the growth of LCCs. Further liberalization is needed for the full realization of associated benefits.

Subfields: Aerospace Engineering, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b9ebf436359ebd941d0c24a0e8d695931eefef29

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Aerospace Engineering

1. Kun Wang
2. Xiaowen Fu

In Economics and Econometrics

1. Z. Lei
2. Kun Wang
3. Jia Yan
4. Xiaowen Fu
5. Kenneth Small

In Strategy and Management

1. Z. Lei
2. Kun Wang
3. Xiaowen Fu

Citations in the corpus

• Low cost carrier competition and route entry in an emerging but regulated aviation market – The case of China (2015, background): “Finally, although many Asian LCCs have aggressively expanded into international markets (Homsombat et al., 2011, 2014), China is conservative in aviation liberalization and it has been quite challenging for private airlines to serve international destinations (Fu et al., 2010, Adler et al., 2014).”