Positive Effects Of Deregulation In Airlines

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The impact of deregulation
Deregulation provided a freely competitive market that would provide air service efficiently changes due to deregulation eliminate of restrictions on which routes airlines could fly that airlines can add new routes and remove old routes by themselves, not controlled by Civil Aeronautics Board (CAB). Thus, deregulation make rapid expansion of the airline operations, also emerged of new airlines such as low cost carriers (LCC), smaller airlines which would not squeezed out from the airline industry base on the deregulation, also they can survive in airline industry with large airlines now.

After deregulation, airlines have developed a hub and spoke structure as spatial and the commercial strategies for organizing airline
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Also, the another factor is travel season. In the peak season for travelling, the number of traveller is more than other travel season that more travellers and flights use the airport. Also, the airport need more staff for the airport operation, so the revenue and cost of airport would be increase. However, in the low season, the airport revenue and costs would be decrease because the number of traveller is less than peak season, so no more people who use the airport than no more flight provide for traveller, and the airport no need more staff for airport operation. Thus, airport’s revenue and costs would be lower.

The main techniques for measuring airport economic performance
Furthermore, airport measure the economic performance based around the work load unit (WLU) which mean handle 1 passenger or 100 kg freight how many costs would use, for example per WLU for total cost, operating cost, depreciation cost, labour cost, total revenue and

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