ABSTRACT
Air transport allows for personal mobility and for the speedy movement of goods. Within Europe commercial air transport is a vital form of medium distance transport and ties Europe into an intercontinental market place. The global move towards freeing air transport markets from economic regulation has produced short-term benefits for many consumers of airline services. The European airlines have had to adjust to major institutional change at the same time as encountering new market conditions and handling the more traditional ones of trade cycles and unexpected external shocks. The observable impact in the short-term has been a demonstrable increase in the economic efficiency of the full service carriers in Europe that has been passed on in lower fares and more convenient services to travelers. A major problem with scheduled airlines is that in competitive environments there are natural market forces tending to push fares down to marginal costs.
