The deregulation of the commercial airline industry in the United States was initiated by the Carter Administration in 1978 (Thayer, 1983, pp. 359-363). In the United States, government is only a regulator of commercial airline activity. In most other countries of the world, however, government is also a shareholder (often the only shareholder) in airline companies (Pryke, 1987, p. 24). When deregulation of the airline industry is considered in most other countries, considerations of public ownership and privatization are also often involved (Doganis, 1985, p. 49).
In the international airline industry, Canada began to explore deregulation in mid 1984 ("Canada," 1984, p. 50). At that time, the Liberal Government of Prime Minister Pierre Trudeau was in power. Later that year, the Progressive Conservative Government of Prime Minister Brian Mulroney came into power, and since that time, a privatization scheme for Air Canada has been initiated (Gaffiney, 1988, p. 46).
The Canadian approach to privatization will leave the government as a major partner in Air Canada, while offering about 50 percent interest in the airline to private investors. This approach to airline privatization is one which many governments in Southeast Asia began to pursue in the mid 1980s ("Semi," 1985, pp. 92-93). Since the mid 1980s, various airline privatization schemes have been initiated in such diverse countries as the United Kingdom, the Republic of South Africa, and the Kingdom of Jordan (Barrett, 1985, pp. 23-25; "South," 1988, pp. 186-188; "Royal," 1988, p. 62).
This research examines the trend of privatization in international commercial aviation in the 1980s, including the deregulation of the airline industry in the United States. The purpose of including American airline deregulation in this research is twofold. First, deregulation in the American airline industry is viewed as a form of privatization. Second, as...