ABSTRACT
The world’s aviation industry has been exposed to significant changes during the past two decades. These changes have had their origins in both the aviation industry and external institutional bodies, which have created the appropriate legislation regulating the rules and procedures for the industry’s operations. It is likely that the most important institutional change that has ever occurred was the deregulation of the U.S. airline industry in 1978. A few years after deregulation, significant welfare effects and benefits for the airlines, their users and society as a whole had been gained. This generated the pressures for creating more liberal aviation markets in the other areas including Canada, Australia, and of course, Europe (Bailey et al., 1985; Button, 1989 a, b; Morisson and Winston, 1986).
