Effects of Deregulation on Local Air Passenger Demand

In Japan, supply-demand adjustments for aviation regulation were abolished under the revised Aviation Law of February 2000. This act of deregulation provided airline companies the freedom to set airfares and enter into or withdraw from any route. Competition after deregulation brought many benefits to the consumers of the major routes as well. On the other hand, it inconvenienced the consumers of minor routes by widening the gaps in airfares and services. The purpose of this study is to determine how domestic aviation networks have been affected by airline deregulation. Moreover, the possibility for revitalizing regional airports is suggested.