Air transport economics

Yuchao Xu and Yahua Zhang

Chapter 3 in Research Handbook on Air Transport Management, 2026, pp 39-53 from Edward Elgar Publishing

Abstract: The air transport market has become more dynamic and competitive thanks to the ongoing deregulation efforts since the late 1970s. Air transport economics contributed to the deregulation policy formulation, and a large volume of air transport economics literature has assessed the outcome and confirmed the success of this policy. This chapter reviews the key deregulation initiatives and the resultant changes in market structure, competition, business model and network. Despite all the positive benefits associated with air transport deregulation, restrictions on foreign ownership of most countries’ airline and airport operators remain, and the expansion of low-cost carriers can contribute to overcapacity and economic inefficiency. As with many other sectors, air transport is undergoing digital and green transformations and also facing increasing geopolitical risks, which calls for new research studies.

Keywords: Regulation; Deregulation; Open skies; Aviation decarbonisation; Airline economics; Low-cost carriers (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035336272
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