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Did Deregulation Affect Aircraft Engine Maintenance? An Empirical Policy Analysis

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  • D. Mark Kennet

Abstract

Examination of aircraft engine histories provided by Pratt & Whitney, Inc., indicates a significant increase in the number of engine hours between major overhauls in the period following deregulation. Parametric analysis of times between overhauls, which controls for other variables affecting the length of the shop visit cycle, suggests that deregulation is a significant factor in the change. Logit analysis, however, shows that engine "failures" (as measured by in-flight shutdowns) have not increased as a result of deregulation. These findings suggest that airlines have responded to competitive pressures by optimizing scheduled service times and perhaps by improving the quality of service performed by paying less attention to minor problems between scheduled shop visits.

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  • D. Mark Kennet, 1993. "Did Deregulation Affect Aircraft Engine Maintenance? An Empirical Policy Analysis," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 542-558, Winter.
    • Handle: RePEc:rje:randje:v:24:y:1993:i:winter:p:542-558
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    Cited by:

    1. Victor Aguirregabiria, 2006. "Another Look at the Identification of Dynamic Discrete Decision Processes: With an Application to Retirement Behavior," 2006 Meeting Papers 169, Society for Economic Dynamics.
    2. Aguirregabiria, Victor & Mira, Pedro, 2010. "Dynamic discrete choice structural models: A survey," Journal of Econometrics, Elsevier, vol. 156(1), pages 38-67, May.
    3. Aguirregabiria, Victor & Gu, Jiaying & Luo, Yao, 2021. "Sufficient statistics for unobserved heterogeneity in structural dynamic logit models," Journal of Econometrics, Elsevier, vol. 223(2), pages 280-311.
    4. Nancy L. Rose, 1992. "Fear of Flying? Economic Analysis of Airline Safety," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 75-94, Spring.
    5. Severin Borenstein & Nancy L. Rose, 2014. "How Airline Markets Work…or Do They? Regulatory Reform in the Airline Industry," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 63-135, National Bureau of Economic Research, Inc.
    6. Victor Aguirregabiria, 2005. "Another Look at the Identification of Dynamic Discrete Decision Processes," Econometrics 0504006, University Library of Munich, Germany.
    7. Morton I. Kamien & Daniel R. Vincent, 1991. "Price Regulation and Quality of Service," Discussion Papers 920, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Rhoades, Dawna L & Waguespack, Blaise, 2000. "Judging a book by it's cover: the relationship between service and safety quality in US national and regional airlines," Journal of Air Transport Management, Elsevier, vol. 6(2), pages 87-94.
    9. Severin Borenstein & Nancy L. Rose, 2007. "How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry," NBER Working Papers 13452, National Bureau of Economic Research, Inc.
    10. Sami Dakhlia & Akbar Marvasti, 2020. "Regulatory Change, Market Structure, and Fatalities: The Case of the Gulf of Mexico Reef Fish Fishery," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(1), pages 1-26, August.

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