ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Indian Airlines, 1964-1999

There are a number of deficiencies in the performance of Indian Airlines, which are subsequently passed on to the consumers in terms of higher fares. In this scenario, when the skies were opened to private schedule operators in 1991, it was believed that the consumers would stand to gain from competition. This paper studies the structure of cost in the Indian Airlines with a view to assessing the scope of unlimited competition in domestic civil aviation industry. The findings suggest a high degree of scale economies in the Indian Airlines, limiting the scope of competition. The results on price and substitution elasticities, technical change and productivity growth indicate that better management of the Indian Airlines would be more helpful than the intense competition.

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