| Part 1 | Overview | |
| 1. | Introduction | 3 |
| 2. | A Profile of the Airline Industry | 6 |
| Industry Structure | 7 |
| Fares | 11 |
| Service Quality | 19 |
| Profits | 28 |
| Safety | 31 |
| Implications | 33 |
| Appendix | 34 |
| Part 2 | Analysis | |
| 3. | Organizational and Methodological Overview | 39 |
| 4. | Airline Behavior and Traveler Welfare | 43 |
| Impediments to Competition | 43 |
| Patterns of Price Leadership | 67 |
| The Welfare Cost of Fare Restrictions | 78 |
| Summary | 82 |
| Appendix | 83 |
| 5. | Airline Profitability | 90 |
| The Cost of Forecast Errors | 91 |
| The Determinants of Individual Airline Profitability | 96 |
| Bankruptcy, Multimarket Contact, and Industry Profitability | 105 |
| Conclusion | 115 |
| Appendix | 116 |
| 6. | Industry Evolution | 128 |
| Airline Fares and Market Entry and Exit | 128 |
| The International Dimension | 147 |
| Toward Long-Run Equilibrium | 150 |
| Conclusion | 154 |
| Appendix | 154 |
| 7. | Policy Implications | 159 |
| Government Intervention | 160 |
| Infrastructure | 160 |
| Open Skies | 162 |
| Conclusion | 162 |
| Index | 164 |
| Tables | |
| U.S. Scheduled Airline Enplanements, Passenger Miles, Revenues, and Employees, Selected Years, 1926-93 | |
| Enplanements, Passenger Miles, Average Length of Haul, and Revenue, by Major Carrier, 1993 | |
| U.S., North American, and World Airline Industry Average Fares per Passenger Mile (Yield), 1969, 1980, 1990, 1991 | |
| Operating Profit Margins, Selected Airlines, 1970-93 | |
| Share of Enplanements of the Dominant Carrier at Concentrated Hub Airports, 1978, 1993 | |
| Airline Choice Model Estimates | |
| Estimated Change in Market Share from Elimination of All Frequent Flier Programs, by Airline, 1990 | |
| Change in Market Share If One Carrier's Frequent Flier Program Were Eliminated While Other Carriers Maintained Their Programs, 1990 | |
| Computer Reservation System Ownership | |
| Effects of Computer Reservation Systems' Bias on Traveler Welfare and Airline Revenues | |
| Effects of Computer Reservation Systems' Bias on Distribution of Revenue among Airlines, Base Case | |
| Share of Airline Competitive Pairs in Which One Airline Has Caused Another's Fare (Causality), Base Case with Average Fare, 10 Percent Significance Level, One Lag, 1978-91 | |
| Extent of Causality Airlines Have at Their Hubs and Overall, by Airport, 1978-91 | |
| Probit Analysis of Factors Affecting Causality, by Airline | |
| Factors Influencing Fares | |
| Factors Influencing Traveler Choice of Airline Ticket | |
| Annual Gains to Travelers from Airline Deregulation | |
| Results of Tests for Unit Roots for Average Fare | |
| Share of Causality Tests Exhibiting Granger Causality, Sensitivity of Findings | |
| Estimated Effects of Airline Industry Factors and Other Factors on Airlines' Annual Rates of Return, 1970-88 | |
| Average Annual Changes in Three Least Profitable Airlines' Profits If They Had Characteristics of Three Most Profitable Airlines, 1980-88 | |
| Estimated Effect of Airline Bankruptcies on Industry Revenue, by Bankrupt Airline, 1983-93 | |
| Estimated Effect of Airline Bankruptcies on Revenues, by Airline Affected | |
| Estimated Effect of Bankrupt Airlines, by Occurrence, on Revenue of Three Healthy Airlines | |
| Estimated Effect of Bankrupt Carrier on Fares of Three Healthy Carriers and Share of Healthy Carriers' Revenue in Markets Where They Compete with Bankrupt Carriers | |
| Effect of Individual Multimarket Contact on Airline Revenue, by Airline, 1992 | |
| Effect of All Multimarket Contact on Airline Revenue, by Airline, 1979-92 | |
| Bankruptcy Regression Coefficients, by Carrier | |
| Effect of Bankruptcies on Airline Industry Profits | |
| Multimarket Contact Regression Coefficients, by Airline | |
| Estimated Effects on an Airline's Fare of the Presence of Another Airline on a Given Route | |
| Estimated Determinants of an Airline's Decision to Provide Direct Service on a Given Route | |
| Estimated Determinants of an Airline's Decision to Exit a Given Route | |
| Estimated Change in Fares, Airlines per Route, and Market Shares When One or More Airlines Exits the Industry, by Airline, Twenty Quarters after Exit | |
| Estimated Change in Fares, Airlines per Route, and Market Shares Caused by Selected Mergers, One and Twenty-One Quarters after Merger | |
| Estimation Results of Fare Equations, by Airline | |
| Sensitivity Tests of Simulation Results | |
| Figures | |
| Airline Industry Effective Competitors, National Level, 1978-93 | |
| Airline Industry Effective Competitors, Route Level, 1978-93 | |
| Domestic Airline Average Fare per Passenger Mile (Yield), 1970-93 | |
| Airline Industry Average Fare per Passenger Mile (Yield), Actual under Deregulation and Projected under Regulation, 1978-93 | |
| Distribution of Fares Travelers Paid Relative to Their Route's Average Fare, Fourth Quarter 1978, 1985, 1993 | |
| Effect of an Additional Competitor on the Spread of Airline Fares on a Route, Fourth Quarter 1978 to Fourth Quarter 1993 | |
| Change in Domestic Air Fares, by Route Distance, Fourth Quarter 1978 to Fourth Quarter 1993 | |
| Distribution of Domestic Air Fares Relative to Projected Regulated Fares, Fourth Quarter 1993 | |
| Share of All Passengers on Domestic Flights Who Needed to Make Connecting Flights, 1978-93 | |
| Excess of Actual Distance Flown over Shortest Possible Distance to Destination, Domestic Trips, 1978-93 | |
| Change in Components of Total Flight Time, Domestic Flights, by Flight Distance, 1978-93 | |
| Change in Components of Total Flight Time, Domestic Flights, 1978-93 | |
| Share of Airline Seats Filled by Paying Passengers (Load Factor), 1970-93 | |
| Share of Airline Seats Filled by Paying Passengers, by Distance, Domestic Flights, 1978, 1993 | |
| Scheduled Airline Operating Profit Margin for Domestic and International Services, 1970-93 | |
| Chance of Death per Million Air Carrier Departures, 1975-93 | |
| Yield Premiums at Fifteen Concentrated Hub Airports under Two Methods of Determination, 1978-93 | |
| Predicted GDP Minus Actual GDP, Eight-Year Lag, Two-Year Lead, 1950-93 | |
| Change in Airline Industry Average Fares Caused by Multimarket Contacts, 1979-92 | |
| Estimated Effects of Multimarket Contacts on Fares, 1979-92 | |
| Connecting and Direct Routes Served, Southwest Airlines, 1979-93 | |
| Connecting and Direct Routes Served, American Airlines, 1978-93 | |
| Connecting and Direct Routes Served, USAir, 1978-93 | |
| Connecting and Direct Routes Served, Delta Airlines, 1978-93 | |
| Connecting and Direct Routes Served, United Airlines, 1978-93 | |
| Estimated Effect on Fares of Exit from Airline Industry by Continental, America West, and TWA | |
| Indexes of Real Revenues and Costs per Revenue-Ton Mile, 1970-93 | |
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