chapter  8
32 Pages

Deregulation of airline nationality

Globalization in the airline industry occurs only with the change in governance culture. The replacement of the centralistic regulatory paradigm with a competitive framework can cause the direct alignment of airline activities with the national interest eventually to give way to free interaction of private interests. The consolidation trend has been noted for some time in large domestic markets and in regions in which airline nationality has been liberalized. Most importantly, defragmentation of the international market would permit airlines to build up worldwide airline networks. This alone would offer an opportunity to rationalize the structure of the industry, reduce the non-utilized capacity, gain greater benefits from network economics and diversify risks associated with particular local markets. The redefinition of the international air transport market transforms the nature of competition within the industry and introduces new opportunities and challenges associated with economic globalization.