ABSTRACT
This chapter considers the system of regulation, the transition to deregulation, and the likely performance under deregulation. During 1990, Australia will have partially deregulated its domestic airline industry. Australia has had a unique system of domestic airline regulation–the Two Airline Policy. This policy has resulted in two very similar airlines, which have operated under very strict regulation. Australia consists of five major cities over one million in population, a few major tourist areas such as Cairns on the Barrier Reef, and few large cities in between. Australia's Two Airline Policy is of interest for several reasons, it is an exceptionally tight system of regulation that has withstood pressures for competition for nearly three decades. Granted the extent and detail of regulation under the Two Airline Policy, it is interesting to note that perhaps the most obvious and curious feature of the Australian airline system, parallel scheduling, is not, at least directly, a result of regulation.
