The First Decade of the European Air Transport Deregulation

Abstract

The authors present an empirical analysis of the effects of the deregulation processes carried out in the European air transport industry during the period from 1986 to 1994, prior to the 1997 complete liberalization of the industry. Using individual data for 44 city-pair intra-European scheduled routes, the authors estimate several price equations to assess the relevance of both the deregulation packages released by the European Commission in 1987, 1990, and 1992 as well as the liberal bilateral agreements that several countries had agreed upon before. The results support the idea that during this initial decade, the effects of the deregulation in terms of fare levels and percentages of discount were weaker than expected, thus paving the way for the deeper measures that were adopted after 1997.