Industry Trends
- Airline Privatization
In the past, most airlines were at least partly government owned. This is still true in many countries, but many major airlines have become privately-held, i.e. all major airlines in the US are now privately held
- Industry Deregulation
The 1980s were marked by the deregulation of the industry, which resulted in the birth of small carriers and the mergers of larger ones. The modern air transport industry is one that increasingly operates within a liberal market context. While government controls over fares, market entry, and capacity continue to exist in many smaller countries, they are gradually and almost universally being removed or relaxed in most large economies.
- Popularization of Air Travel
The 1990s saw a dramatic increase in the number of passengers, including first time passengers, as ticket prices were cut while the number of cities served by airlines increased.
- Towards Open Skies
Bilateral Air Service Agreements have increasingly moved the industry towards an open skies formulation, although progress on a fully open market, where nationality or ownership of airlines is unrestricted, is coming more slowly. The EU area has effectively been the largest international free market in air transport services in the world since 1997, and this has grown as the EU has been expanding geographically.
- Oligopoly Competition
The global nature of its market and the vital importance of economies of scale make the airline industry an oligopoly.
- Rise of Private Investment in Infrastructure
The supply and operation of air transport infrastructure is also becoming more market driven with on-going privatizations of airports and air traffic control systems. In general, infrastructure investment has increasingly involved private capital.
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