Research Paper on:
Airlines, Deregulation, and Their Continuing Impacts

Unformatted Sample Text from the Research Paper:
forms of competition. After examining these facts this paper comes to a logical conclusion as to whether or not we need regulation again. DEREGULATION: WHAT IT IS Deregulation  in business, which is the process of allowing businesses to operate without legislative controls, has historically been most prevalent in the banking, utility and airline industries. But what is  deregulation and is deregulation of business activity truly possible, and if so, what might be the consequences? A key factor in the pricing of a product or, in the case  of airlines, a service, is the question of whether it is a commodity or is in some way differentiated. Commodities compete strictly on the basis of the lowest or  best price. Differentiation indicates that customers perceive some characteristic of a product to be different from similar products. The difference may allow the producer of the product to charge  a higher price based on that difference.1 Differentiation can take many forms, one being service. The vast majority of businesses compete on the basis of service that implies that it  plays a smaller role in differentiation. Some products may be bundled into a package that is more appealing--for example, in banking it would be packages of checking, savings, credit  cards, and safe deposit boxes. Other products may result from alliances, such as cards linked to frequent flyer programs. Large, rate-sensitive products--home mortgages, large deposits, and auto loans--may be  better marketed as individual products.2 What is the impact of product differentiation? The increasing competition should drive non-differentiated pricing differences down to zero.3 HISTORY OF DEREGULATION It was  in 1978 that airline deregulation was introduced. Before deregulation, airlines needed permission from the government for certain routes as well as the setting of prices. However, at that