Institutional issues in transatlantic aviation

The air transport industry is expanding rapidly and it is a driving force in the globalization of economic activity through its global air service networks. International organizations such as the WTO and ICAO, as well as trade blocks and economic unions such as NAFTA and the EU, are in the process of examining the regulatory framework necessary to enable competition on an enlarged international basis. While much research has been undertaken into issues such as airline competition, airport regulation, and pricing policies,there has been very little focus on the role of the institutions designing and managing the air transport industry in national and international contexts. The purpose of this chapter is to give an overview of the nature and role of institutions in aviation in Europe and the US and to explore potential research issues relating to institutional arrangements in the operation of the air transport sector. The chapter will investigate in a general way some of the institutional differences between Europe and the US and the evolution of institutions in the transatlantic market.