American Economic Review Vol. 101 No. 3 2011
Why Can't US Airlines Make Money?
Abstract
US airlines have lost nearly $60 billion ($2009) in domestic markets since the 1978 deregulation, most of it in the last decade. The dismal financial record challenges the economics of deregulation. I examine some of the common explanations among industry participants and researchers—including high taxes and fuel costs, weak demand, and competition from lower-cost airlines. Major drivers seem to be the demand downturn after 9/11—demand remains much weaker today than in 2000—and the large cost differential between legacy and low-cost carriers, which has persisted even as the price differential between them has greatly declined.
- DOI
- 10.1257/aer.101.3.233
- Volume
- 101
- Issue
- 3
- Pages
- 233-237
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref