THE CHALLENGE OF LIBERALIZING DOMESTIC AIRLINE COMPETITION IN A LESS DEVELOPED COUNTRY

A new wave of liberalisation of domestic airline competition is taking place in less developed nations, although the initial motivation in m ost cases is to supplement the capacity of the government's own airlin e. Liberalisation tends to begin with free market entry and a strong i nterest in privatisation while other regulatory controls are maintaine d. This position is untenable and policy makers in the less developed countries are having to learn quickly without the benefit of the detai led analyses that preceded liberalisation in the developed countries. This paper explores these problems and focuses on the lessons that pol icy makers in the less developed countries can draw from experiences e lsewhere.