Author: National Research Council (U.S.). Transportation Research Board
Publisher: Transportation Research Board
This report, prepared by the Committee for a Study of Competition in the U.S. Airline Industry, updates the Transportation Research Board (TRB) report "Winds of Change: Domestic Air Transport Since Deregulation" (1991). The purpose of this study was to examine the state of airline competition and to offer recommendations for furthering and safeguarding it. It focuses on some well understood and recognized opportunities to encourage airline competition, especially in larger markets.
GAO discussed the airline industry's competitive and financial problems, focusing on the: (1) protection of U.S. consumer interests; and (2) future ability of U.S. airlines to compete in domestic and international aviation markets. GAO noted that: (1) over the last 3 years, the U.S. airline industry's losses totalled $10 billion; (2) three airlines accounted for two-thirds of the total losses and $2 billion in losses resulted from changes in airline retiree benefits liability recording methods; (3) five airlines have experienced reductions in their market shares, while the three largest airlines have increased their market share from 41 to 58 percent; (4) airline losses resulted from leveraged buy-outs, ill-timed expansions, limited access to capital to further competition and replace older aircraft, unlimited fare wars, liquidation actions by bankrupt airlines, and competition limitation which increased consumer costs; and (5) to combat the airline industry's financial and competitive problems, a national strategy should be implemented to provide U.S. airlines with access to capital markets by relaxing restrictions on foreign investment and control, enhancing access to the international market, reducing barriers to domestic and international competition, and examining claims regarding unfair airline pricing practices.
The advantages of airline competition to consumers are clearly apparent. Lower fares, greater choice, more frequent flights and a wider range of available services have all been evident when the entry of a new competitor has occurred. In many instances however, after an initial, relatively short-lived, period of aggressive competition the new entrant has either gone bankrupt or found a less stressful existence co-operating in some manner with the incumbent. In this wide-ranging book, the author looks at the competitive arena in the post-regulation era and especially focusses on deregulation’s legacy; globalization in a bilateral world breaking the link between nationality and airlines. The book is of special interest to those members engaged in the Airline Industry, Regulatory Authorities and Government Departments of Transport and Industry. It will be of value to academic specialists in transport economics and public policy; MSc students and Institutes of Transport; pressure groups and the Travel and Tourism Industry.
Almost all published work on revenue management deals with forecasting and optimization methodologies in the absence of competition. For a taxonomy of revenue management problems, see Weatherford and Bodily . Kimes [561 and recently, McGill and van Ryzin  give an overview and survey on revenue management.
Aeronautics, Commercial by United States. Congress. Senate. Committee on Commerce, Science, and Transportation
Explores the state of competition in the domestic aviation industry. Specifically, it attempts to determine whether hubs are producing the benefits of competition or, as some argue, permitting the dominant carrier at the hub to impose monopoly prices on the public. Witnesses include: Senators Mike DeWine, Herbert Kohl, and Charles E. Grassley; Robert J. Spane, pres. and CEO, Vanguard Airlines; Richard B. Hirst, sr. v.p. for corporate affairs, Northwest Airlines; Kevin C. Stamper, chmn. and CEO, ProAir; Cyril D. Murphy, v.p. for international affairs, United Airlines; and Steven A. Morrison, Prof. of economics, Northeastern University.