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Published at Saturday, March 23rd, 2019 - 07:26:59 AM. Type of airline. By Audrick Krause.

One argument is that positive externalities such as higher growth due to global mobility outweigh the microeconomic losses and justify continuing government intervention. A historically high level of government intervention in the airline industry can be seen as part of a wider political consensus on strategic forms of transport such as highways and railways both of which receive public funding in most parts of the world. Although many countries continue to operate state-owned or parastatal airlines many large airlines today are privately owned and are therefore governed by microeconomic principles to maximize shareholder profit.

As in many mature industries consolidation is a trend. Airline groupings may consist of limited bilateral partnerships long-term multi-faceted alliances between carriers equity arrangements mergers or takeovers. Since governments often restrict ownership and merger between companies in different countries most consolidation takes place within a country. In the U.S. over 200 airlines have merged been taken over or gone out of business since deregulation in 1978. Many international airline managers are lobbying their governments to permit greater consolidation to achieve higher economy and efficiency.



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