Is the debate over the contestability of airline markets really dead?

The liberalisation of the US domestic air-freight market in 1977, and the more well-known liberalisation of the US domestic passenger market the following year, attracted considerable academic attention. The move from a highly regulated industry to one characterised by essentially free entry and exit provided economists with a rare chance to study a dramatic transformation in market conditions that would not be excessively muddied by other policy changes. ¹ Since that time there have been other regulatory reforms that have offered somewhat similar opportunities, but analysis has often been clouded by reforms being staggered over a large number of years, as in the case of the European Union, or only applying to a relatively small market, as with New Zealand and Australia.