Deregulation Today

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Open Skies refers to a global policy idea to liberalize aviation rules and regulations (Wiradipradja, 2021). Open Skies agreements facilitated the expansion of cargo and international passenger flights to and from America, leading to more trade and travel and boosting the economy and productivity. The agreements prevent governments from interfering with air carriers’ commercial decisions about pricing, capacity, and routes allowing carriers to offer efficient, convenient, and affordable services. Open skies policy in America promotes the United States’ airline globalization. The unrestricted market access allows optimal operational flexibility among the different partners. There are several differences between Open Skies and Bilateral agreements. First, Bilateral agreements have pricing restrictions that are absent in Open Skies. Also, bilateral agreements restrict operations to and from additional nations, while Open Skies allow open rights to and from these nations. Finally, Bilateral agreements restrict carriers in terms of the number of flights and the markets to operate in, while Open Skies allow them to decide the market and number of flights.

Deregulation involves minimizing or disposing of government control in a particular sector or industry to promote competition. Deregulation helped in reducing airfares (Barrett, 1990). It is estimated that airfares are three times cheaper than they used to be (Buren, 2020). Also, deregulation has contributed to increased air travel. The number of flights has doubled while people voyaging has tripled. Also, deregulation has made airlines safer as it encourages carriers to be more safety-conscious. Finally, deregulation has allowed airlines to drive the development of improved planes. The plane building industry fell significantly, resulting in only two notable companies. Therefore there is not much pressure on the organizations to promote change and development. Airbus and Boeing are in a comfortable duopoly. Unless one of these organizations builds a revolutionary plane model, there is usually no pressure for innovation.

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