A more open market for airline competition has
benefited customers not only in the U.S. but also countries and
regions worldwide that have that liberalized their air service, a
new study concluded.
InterVistas-ga2 Consulting, an aviation consulting firm in
Washington, said its study on The Economic Impact of Air Service
Liberalization shows liberalization has increased employment and
added to economic growth by creating new opportunities for
consumers and shippers and dramatically increasing the number of
To back up its findings, InterVistas-ga2 used case studies of
numerous markets where air service has been liberalized.
United Arab Emirates open-skies agreements help set the stage
for the growth of Dubais airport into a major international hub as
well as for the rapid growth of Emirates Airlines, it said.
Domestic deregulation in India and Brazil have helped the
development of low-cost carriers in both countries, it said, and
the liberalization of service to secondary airports in the U.K. led
to a big increase in international flights to them.
But it was Europe that was one of the studys prime examples. The
consulting firm said the creation of a Single European Aviation
Market in 1993 increased intra-European air travel by 44 million
passengers, allowed the addition of 618 new roundtrip flights and
doubled the growth rate in traffic when the numbers are adjusted to
account for the impact of the 9/11 terrorist attacks.
The open market also enabled the explosive growth in low-cost
carriers in Europe, it said. Once the impact of deregulation began
to be felt, the study added, traffic increased more than capacity
as lower fares meant carriers were filling a higher percentage of
Regarding air travel liberalization worldwide, InterVistas-ga2
post-liberalization traffic growth between countries has typically
averaged between 12% and 35%, much higher than before.
Based on those results and the firms simulation and modeling,
InterVistas-ga2 said it identified 320 more country-pair markets
where liberalization would increase traffic, on average, by almost
63%. That compares with typical world traffic growth of 6% to 8%,
the firm said, and would create about 24 million full-time jobs and
generate an additional $490 billion in gross domestic product --
also as much as the size of Brazils economy.
The firm also said simulation of full liberalization of the
U.S.-U.K. market, which still contains strict limits on service to
London, would increase traffic almost 29% because of lower fares
and more nonstop service from U.S. cities to Heathrow and Gatwick