ABSTRACT
This chapter examines aviation markets in developed economies, including the United States (US), European Union (EU), Canada and Australasia that have gone through the deregulation process, and examines new industry strategies that have emerged in the face of evolving government policy in domestic and international aviation markets. While deregulation has taken place in developed and developing economies (see also Chapter 7), the focus here is on mature markets. Mature markets are generally associated with developed economies; economies that were the first to move to deregulation in their domestic aviation markets and also initiate more liberal international bilaterals. Such institutional innovation led to rapid traffic expansion as prices fell and costs decreased. However, once a market has a relatively small amount of migration (immigration), urbanisation has stabilised and the middle class is a relatively stable proportion of the population (the income distribution is not shifting significantly), and deregulation has worked through the economy to exploit most opportunities it provided, the markets will tend to grow at a steady pace, at a trend value reflecting population and economic growth (see Chapter 19). These are mature markets. Such markets are a challenge to any firm, but especially airlines, as they seek to grow their international presence while maintaining their domestic markets in the face of new and evolving business models (see Chapter 8).
