Competitive Impact of the 1,500-Hour Rule on U.S. Airlines: Evidence from U.S.–Canada and U.S.–Mexico Markets

Zuzanna Markiewicz
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Zuzanna Markiewicz: University of Warwick

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: This study examines whether the 2013 FAA First Officer Qualifications (1,500-hour) rule reshaped competitive dynamics across U.S. legacy and regional carriers, measured by group-level mean changes in offered seat capacity relative to Mexican and Canadian carriers outside the rule’s jurisdiction. Triple-Difference and Difference-in-Differences models are estimated on an airport-pair–carrier–month–year-level data on passenger flights on bidirectional U.S.–Canada and U.S.–Mexico routes market from 2012 to 2014. On average, post-policy, the U.S. legacy–regional capacity gap in offered seats widened by 46% relative to the corresponding foreign legacy–regional gap. U.S. regional carriers reduced offered seats by 19% relative to foreign regional carriers, while U.S. legacy carriers increased offered seats by 34% relative to foreign legacy carriers. Overall, the safety-oriented tightening of pilot-qualification requirements appears to have produced unintended competitive spillovers with asymmetric effects, consistent with wage-sensitive U.S. regional airlines curtailing operations and larger-scale U.S. legacy carriers gaining market power.

Keywords: 1,500-hour rule; pilot qualification requirements; labour supply constraints; airline competition; regulatory asymmetry JEL classifications: L93; L51; L13; J44; R48 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-com, nep-lma, nep-reg and nep-tre
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