A Review of History, Structure, and Competition in the U.S. Airline Industry

Abstract

The airline industry has evolved~in two profoundly different eras, first under the protective hand of federal economic regulation and, following the Airline Deregulation Act of 1978, subjected to the full force of the free market. This history has proved a fertile testing ground for economic theories and predictions of market behavior. This paper first provides a brief history of the domestic airline industry under regulation. Next, the post-deregulation transformation is reviewed. Attention is then focused on a survey of the extensive airline economic literature. Finally, several current trends that promise to further shape the industry are examined.