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The effect of public ownership and deregulation in the Scandinavian airline industry

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  • Randøy, Trond
  • Strandenes, Siri Pettersen

Abstract

We analyse why deregulation resulted in a temporary strong reduction in prices in Sweden, whereas in Norway the prices did not change significantly. SAS and Linjeflyg merged when the Swedish market was deregulated, whereas attempts to merge SAS and Braathens SAFE did not succeed. Upon deregulation in Sweden some of the carriers operating charter markets or regional secondary routes decided to enter the main routes. This put pressure on prices. Similar entries did not take place in the Norwegian market. We analyse whether the duopoly between SAS and Braathens SAFE is characterised by tacit collusion.

Suggested Citation

  • Randøy, Trond & Strandenes, Siri Pettersen, 1997. "The effect of public ownership and deregulation in the Scandinavian airline industry," Journal of Air Transport Management, Elsevier, vol. 3(4), pages 211-215.
    • Handle: RePEc:eee:jaitra:v:3:y:1997:i:4:p:211-215
    DOI: 10.1016/S0969-6997(97)00028-8
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. Rees, Ray, 1993. "Tacit Collusion," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 9(2), pages 27-40, Summer.
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