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Economic effects of air transport market liberalization in Africa

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Abstract

Although the aviation industry is increasingly becoming important for Africa's economic development and integration, the ability of airlines to access foreign markets remains hindered by restrictive regulatory policies. Attempts have been made to fully liberalize the intra-African air transport market. Except for general assertions about the merits/demerits of liberalization, our empirical understanding of the welfare effects of such polices in Africa remains rudimentary. This study empirically measures the economic effects of air transport liberalization, mainly on two supply side variables: fare and service quality, measured as departure frequency. The results show up to 40 % increase in departure frequency in routes that experienced some type of liberalization compared to those governed by restrictive bilateral air service agreements. While the effect of liberalization is substantial in improving service quality, there is no evidence of its fare reducing effect.

Suggested Citation

  • Abate, Megersa, 2014. "Economic effects of air transport market liberalization in Africa," Working papers in Transport Economics 2014:23, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2014_023
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    More about this item

    Keywords

    Air transport; Liberalization; Yamoussoukro decision; Bilateral air service agreements;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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