Deregulation of the Airline Industry: Opportunities and Challenges

27-12-2005
Author(s): Adla Ragab
Publication Number: ECES-WP109-A

Abstract:

This study evaluates the merits of deregulating the airline industry in Egypt, especially from the perspective of enhancing the contribution of tourism to the Egyptian economy. It does so by tracing global developments in the airline industry, assessing the liberalization effort in Egypt to date, and outlining options for the future. On the latter point, the paper outlines three options: the first is to maintain the status quo, the second is to apply open skies policies unilaterally to all airports (including Cairo International Airport), and the third is to enter into bilateral open skies agreements to be regulated and controlled by the Civil Aviation Authority. Of these options, the study favors the third, but it argues that deregulation works best when additional measures are taken such as encouraging private participation in that sector, and safeguarding against anti-competitive behavior.

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