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Airline Re-Regulation.

If newspaper editors were to select the top five business stories of the past five years, the U.S. airline industry's trials and tribulations certainly would make every list. Eastern, Midway, and Pam Am folded. Continental and America West struggle with bankruptcy, trustee control, and seemingly endless reorganization. Foreign carriers and investors circle like either angels or vultures over several U.S. carriers. Irrational fare wars repeatedly sap the industry's strength. Even Delta, in the wake of a river of red ink, did the unthinkable and proposed furloughs for full-time employees. Clearly, the airline industry is in turmoil that will not be settled soon.

Airline Re-regulation undertakes two missions: It first offers a research-based perspective on airline executives' backgrounds. It then proposes modifying future public policy development processes to offset the cumulative effects of profit-focused decisions arising from the executives' largely finance-oriented career tracks.

Gesell's position is that airline re-regulation as practiced in the United States for the past decade--though possibly a worthwhile experiment--has failed. Listed as a potential cause is "the avarice of capitalism." The system, rather than individuals, is at fault.

The quantitative research at the heart of this treatise is compilation, typology, and analyses of airline chief executives' academic training and career tracks. The work's major theoretical contribution is the proposal that, in order to prevent the system from repeating previous policy failures, future public airline industry policy development should not simply return to previous paradigms. Instead, Gesell argues that future debates, in the struggle to balance the interests of capital, labor, and the consumer, should make room for enhanced social control and the "social regulation" that inevitably results.

If the reader concurs with this conclusion, then the rest of Airline Re-regulation can become a fulfilling though somewhat tedious philosophical revalidation. However, for the reader viewing airline deregulation as a success, the book provides a good preview of one solution likely proffered as the public policy debate continues.

The book has significant weaknesses. One, it is difficult reading. The second flaw is the publication's overall format. Those involved in academic writing should study this work as an example of how fundamentally respectable research, effective synthesis of existing theory, and creative hypotheses can be diminished by ineffective presentation. Clearly, the text did not receive treatment from either a good editor or graphic artist.

With one exception, appendices display intricate details of statistical methodology and computer analysis that might better have been left out or at least simplified. The exception--a reproduction of the study's survey questionnaire--is extremely worthwhile. The questionnaire can, upon reflection, promote appreciation for the complexity of airline industry problems, help generate a perspective on the enormity of the tasks facing public policy makers, and develop an appreciation for the likely vigor of future debates.

In summary, Airline Re-regulation reports on a very focused empirical inquiry. It did not attempt more. Readers searching for broader syntheses of airline industry problems and policy debate summaries should look elsewhere. For those actively involved in airline industry and its regulation and related public issues, this is essential reading.
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Author:Miller, Arthur J., Jr.
Publication:Transportation Journal
Article Type:Book Review
Date:Mar 22, 1993
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