Inverse Price/Quality tradeoffs in the Regulated Airline Industry

Inverse Price/Quality tradeoffs in the Regulated Airline Industry

Lower prices encourage firms to economise by increasing load factors; on the other hand, lower prices require higher service frequency to accommodate the additional passengers. Thus inverse price/quality tradeoffs are possible in public transport, and did occur when the US airline industry was deregulated.

Share Content

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Related Articles

Effects of Deregulation on Service Co-ordination in the Metropolitan Areas

The paper examines the impact of deregulation on service co-ordination in the British conurbations outside London. Co-ordination decreased significantly in respect of timetables, fares and passenger information in particular in the period immediately following deregulation. Since then some aspects of co-ordination have improved. On balance, the author’s judgement is that there has been a net decrease in consumer welfare.

View Journal »