North Atlantic Civil Aviation: Liberalization Vs. Crisis – A Regression Analysis

Martin Grančay

Economic Research-Ekonomska Istraživanja, 2013, vol. 26, issue 4, 101-112

Abstract: In 2007, the European Commission and US government signed an agreement liberalizing international air transportation between the two continents. It was expected to increase the annual number of passengers by up to 11 million and generate more than 5 billion EUR in consumer surplus. However, in 2008 the market was struck by global economic crisis. We use regression analysis to distinguish between positive impacts of liberalization and negative impacts of the crisis. We come to the conclusion that had the market not been reinforced by liberalization, annual transatlantic traffic would have shrunk at a pace 3-7 million passengers faster. The results are a clear indication that if European and US airlines want to remain competitive in the coming era of Asian dominance, further liberalization efforts have to be undertaken.

Date: 2013
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DOI: 10.1080/1331677X.2013.11517633

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