The airline industry is fundamental to the workings of the global economy. Yet, ironically for an industry of such sheer scale and economic muscle, profit margins are razor thin and many airlines struggle to break even. The precarious economics of the sector were fully revealed when Covid-19 grounded flights across the world prompting many national carriers to seek government bailouts, while smaller airlines collapsed.
In this updated and expanded new edition Volodymyr Bilotkach explains the economic realities of the airline industry and the challenges that the sector now faces after the seismic impact of the Covid-19 pandemic. The impact of such a large-scale external shock on the industry is considered across each of its sectors and for each of its primary economic determinants. The book also includes new material on changes to cost structures, the pricing of add-on services, cargo, airport slot allocation and the impact of climate change.
The book remains a comprehensive introduction to the economics of airlines, how carriers compete, how they develop their business, and how demand and cost structure, coupled with the complex regulatory regime, produces the industry we see today.
PART I Demand and Cost
4. Airline pricing
PART II Airline Markets
5. Market structure
6. Competition and consolidation
7. Alliances and joint ventures
8. Regulation and deregulation
9. Aviation safety and security
10. Air cargo
PART III External Effects of Aviation
11. Congestion and delays
12. Pollution and climate change
13. Positive benefits
PART IV Economics of Related Markets
15. Air navigation services
16. Aircraft manufacturing
Volodymyr Bilotkach is an Associate Professor at the Singapore Institute of Technology. He is Associate Editor of the Journal of Air Transport Management and serves on the Editorial Board of Research in Transportation Economics. He has published extensively on airline economics, including airline alliances and mergers, airport regulation and the distribution of airline tickets, and has advised the European Commission on policy issues in the aviation sector.