Air transport liberalization and its effects on airline competition and traffic growth - An overview

Xiaowen Fu, Tae Hoon Oum

Research output: Chapter in book / Conference proceedingChapter in an edited book (as author)Academic researchpeer-review

25 Citations (Scopus)


This chapter reviews the effects of air transport liberalization, and investigates the roles played by airport-airline vertical arrangements in liberalizing markets. Our investigation concludes that liberalization has led to substantial economic and traffic growth. Such positive outcomes are mainly due to increased competition and efficiency gains in the airline industry, and positive externalities to the overall economy. Liberalization allows airlines to optimize their networks, and thus may introduce substantial demand and financial uncertainty to airports. Vertical arrangements between airlines and airports may offer a wide range of benefits to the parties involved, yet such arrangements could also lead to airline entry barriers which reduce the effects of liberalization. Three approaches have been developed to model the effects of liberalization in complex market conditions, which include the analytical, econometric and computational network methods. These approaches should be selectively utilized in policy studies on liberalization.

Original languageEnglish
Title of host publicationAdvances in Airline Economics
PublisherEmerald Group Publishing Ltd.
Number of pages34
Publication statusPublished - 1 Jan 2014
Externally publishedYes

Publication series

NameAdvances in Airline Economics
ISSN (Print)2212-1609


  • Air liberalization
  • Airline competition
  • Airport-airline vertical arrangements

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Transportation
  • Pollution
  • Aerospace Engineering


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