ECON42610

This module introduces principles of aviation economics. Air transport markets are described and explained and the key players are identified. Basic market dynamics are analysed. Airline firms are examined in terms of their output, cost and pricing decisions. An understanding of the nature and characteristics of air transport networks is crucial to economic analysis of air transportation systems; the course introduces air transport network models and examines pricing and traffic flow outcomes using these models. Airline network structures are evaluated in terms of their influence on costs, revenues and profitability. Air transport supply and models of airline market structure are examined. Air transport demand is analysed and elasticities of demand are introduced. Air transport markets have traditionally been heavily regulated. The rationale for and approaches to regulation of air transport markets are analysed and the key issues for public policy are identified. The evolution of European air transport policy is traced and the emerging issues in the EU28/European Common Aviation Area (ECAA) are outlined. Data sources for economic analysis of aviation markets are introduced.