Essays on The Airline Industry Policy in the USA and Canada Assignment

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The paper 'The Airline Industry Policy in the USA and Canada' is a wonderful example of a business assignment. An industry policy can be described as a set of instructions, laws, and regulations that are formulated in accordance with the requirements as well as the priorities of a given economy by a ruling power within the government. It is usually adopted by all economies and plays a role as a determinant factor towards a country’ s industrial development for a given period of time. It is therefore considered as the guideline for either encouraging or discouraging some of the continuing or new industrial/investment-related decisions on a specific industry.

Despite that, this policy is often put through the change from time to time in case it is observed to be ineffective. This particular paper will, therefore, compare the regulation aspect of the airline industry policy in the U. S and Canada. In addition, it will be able to determine which policy between the two countries is best as well as the reasons for this. One common aspect between the airline industry policy in the U. S.A and Canada, in terms of regulation, is the aspect of domestic service regulation.

In both countries, this is undertaken through the deregulation of domestic service. For instance, the Canadian airline industry has since 1998 been entirely deregulated, with only a few exceptions relating to safety and foreign control (Madore & Shaw, 1993). Through economic deregulation, measures that were meant to monitor market entry and exit were removed. As a result, there are no regulations governing fares and services. Deregulation has therefore enabled the two air carrier families to contend equally as well as unencumbered on major domestic routes.

The Canadian government has, however, hold on to some air services regulations within the North in the far-away areas of the nation, especially with regards to fare controls and market entry. These regulations are meant to ensure key services to and from the far-away but underpopulated markets. In the U. S.A, domestic service regulation was done by deregulation of the airline industry which started in 1979. Before it began; the Civil Aeronautics Board took control of both the airline routes as well as the ticket prices that were charged, with the aim of serving the interests of the public.

In addition, with the adoption of deregulation, any particular domestically owned airline that was considered able and fit by the Department of Transportation (DOT) was permitted to fly on any domestic route. The major regulatory role of the Department of Transport changed from recommending whether an airline was to operate within the interests of the public to determine whether an airline was operating in compliance with safety standards and other operating procedures (Madore & Shaw, 1993). Despite the fact that route timetable and airline industry pricing have been largely deregulated for more than 20 years; a number of other aspects of the U. S airline industry are still highly regulated.

FRBSF Economic Letter (2002) argues that most significant regulations possibly originate from the local governments that own as well as manage airports within their regions, as a result, control major bottlenecks to airport services, runaways, and access to boarding gates. Additionally, international routes have only been gradually deregulated through negotiated mutual open-skies agreements, which generally permit airline companies from two various countries under consideration to operate between those countries devoid of restrictions.

References

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Edwards, A. (2003).The International Legal Framework for Aviation Regulation, Retrieved on April 26, 2011, http://www2.tech.purdue.edu/at/courses/at300/course%20materials/unit%20documents/bilateral%20vs%20multilateral%20agreements.htm

FRBSF Economic Letter. (2002).Competition and Regulation in the Airline Industry.

Furlan, C. (2002).Air Cargo Foreign Ownership Restrictions in the United States.

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Milke, M. (2010).Why Airfares in Europe are lower than in the U.S, Retrieved on April 26, 2011 from http://www.theglobalist.com/storyid.aspx?StoryId=8553

Madore, O & Shaw, D. (1993).The Canadian Airline Industry: Its Structure, Performance and Prospects, Retrieved on April 26, 2011 http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/BP/bp329-e.htm

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