THE POTENTIAL IMPACT OF AIRLINE DEREGULATION ON FEEDER ROUTES IN THE FAR WEST
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In anticipation of the air transportation regulatory reform act, this paper assesses the consequences of deregulating the airline industry. Particular attention is devoted to the impact of deregulation on air fares, travel demand, and flight frequency for relatively short feeder routes connecting small cities and rural centers. On the basis of a sample of routes in the far western states, it appears that deregulation would raise fares on routes shorter than 100 miles while lowering prices on longer trunk routes connecting major metropolitan areas. Flight frequency on particular routes would be curtailed by approximately 28 percent as airlines substituted price competition for non-price rivalry under a new regulatory regime.