ABSTRACT

Nearly a quarter of a century after the US Government deregulated its domestic air transport market, it seems at times bizarre that with all of the lessons this event produced the airline sector continues to be so volatile. Low cost, no-frills airlines have revolutionised short haul air travel in the US and Europe. Such carriers now account for around 25" of demand in the world's largest air transport market. Apart from within Europe, international air services remain subject to the terms of mostly restrictive bilateral agreements, which in nearly all cases require the designated carriers to be owned and managed by nationals of the designating state. The annual analysis produced by IATA of first, business and economy class travel has consistently revealed the business cabin to be the segment that is most profitable. It is unsurprising therefore airlines have been keen to maintain high business class fares.