Perception of airline industry structure by regulators and managers

Abstract

Differences in the perception of environmental conditions by regulators and managers may explain differences in their opinions and ultimately regulatory failure. The paper investigates whether regulators and firm managers in the European airline industry differ in their perception of current and future industry conditions in general, and route entry barriers in particular. It uses data gathered by a questionnaire-based survey, which reveals that regulators and airline managers perceive only some industry conditions significantly differently. Concerning entry barriers, the data uncover very little significant disagreement. In general, the differences detected do not suggest that one group has a more optimistic picture of the airline industry than the other group has. Correlation among variables only partly corresponds to predictions by theory.