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Abstract

Welfare of air transport consumers depends on the money price of travel and the quality of service. These aspects are summarised in a consumer welfare measure which, combined with measures of producer rents, is used to compare some international civil aviation policy options. These are the current regime, open skies (with subsidies where necessary), deregulation of fares and deregulation of capacity. The cheapest way of pursuing public interest goals is found to be a combination of open skies and subsidies where necessary. It is pointed out that operation of the subsidy policy is not straight-forward but could be implemented by a bidding system. Also cooperation between countries will be required to avoid the ever-present tendency to return to regulation like the current regime.

Keywords

OPEN SKIES REGULATION SUBSIDY EQUIVALENT WELFARE COST

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International Civil Aviation Policy Options

Abstract

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References