The phenomenon of airline deregulation

The deregulation of the air market was responsible for less regulatory rules in the air industry and is often assumed to be accountable for the increase in the number of passengers. However deregulation did not seem to have a significant effect on air traffic. Using a panel of 20 wealthy countries worldwide, this thesis will illustrate that the increasing GDP per capita had more effect on the air traffic than the implementation of deregulation; a higher income was more significant for the increase in air passengers. Consumers became wealthier and could therefore travel/spend more, which can also be seen in other industry with a technical nature. Such markets with high-tech backgrounds are often impacted by economical increase and additional technological developments and awareness. Similar developments could be seen in these typical technical industries such as the car industry, television- and mobile phones industry, where the market output grew when income increased. In addition, the increase in population seems to have no significant effect on air traffic. The change in population is mostly determined by newborn babies and an older generation that pass away, both niche groups that hardly travel. Deregulation should be merely regarded as a change or development of the air market. The air market already experienced a gradually increase in passengers many years before deregulation was even implemented. Hypothetically, if there would be no deregulation, the air market would likely still have seen a steady increase in the number of air passengers.