174 Book reviews / Journal of Air Transport Management 6 (2000) 173}177
Maersk. The barriers to competition remain, however,
the most important being airport congestion. The CAA
believes that secondary trading in slots is essential but
that this should be a formal, transparent process.
This brief summary can do no more than indicate the
intimidating wealth of detail and analysis to be found in
this report. It lacks both an index and a proper bibliogra-
phy, which makes it di$cult to access, while the style
* innumerable brief numbered paragraphs * is inimical
to ready summary. The appendices, however, extend to
no less than 300pp, and contain an incomparable array of
evidence extending across the entire EU. The analysis of
the competitive developments in the di!erent Member
States is very useful, although, in contrast, the treatment
of competition by high-speed rail is somewhat perfunc-
tory, particularly given the importance of this mode in
the strategic Trans-European Networks. This points to
the inherent weakness in the CAA's methodology, one
also apparent in the earlier reports. Partly because of its
governmental remit, it tends to consider air transport in
isolation, dealing only with the rami"cations of those
policies directed at the industry itself. Transport provis-
ion in the EU is, however, a function of much wider
strategic concern related to the social and economic
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Flying into the Future: Air Transport Policy in the Euro-
pean Union
Kenneth Button, Kingsley Haynes and Roger Stough;
Edward Elgar, Cheltenham, 1999, @47.50, ISBN
1 85898 799 7
Flying into the Future describes, analyses and assesses
the development of air transport policy in the European
Union (EU) against a background of increasing glo-
balisation. It originated in work undertaken by its three
authors as part of the European air transport component
of the `Managing Interoperability by Improvements in
Transport System Organisation in Europea (MINI-
MISE) project of the EU.
The underlying theme of the book is with the problem
of identifying a set of appropriate policy measures to deal
with, on the one side, the prevention of actions designed
to arti"cially suppress competition and, on the other, the
various forms of collaborative action which enhance
market stability. The task faced by EU policy makers,
whilst undoubtedly daunting, requires both a clear un-
derstanding of how Europe's air transport markets are
evolving and a set of useful analytical tools with which to
help them devise appropriate legislation. Compared to
integration of the Community. Although it likes to
regard itself as a singular and discrete entity, the air
transport industry is part of, and should be analysed
within, this wider policy domain. Again, the report is
silent on the implications of EU competition and envir-
onmental policy for the Community's air transport
industry. Nevertheless, for anyone interested in the con-
strained and imperfect processes that constitute airline
competition, this report provides a battery of evidence
from a wide array of sources not otherwise easily ac-
cessed by either the industry or those researching it.
References
CAA, 1993. Airline Competition in the Single European Aviation
Market (CAP 623). Civil Aviation Authority, London.
CAA, 1994. Airline Competition on European Long Haul Routes (CAP
639). Civil Aviation Authority, London.
Brian Graham
School of Environmental Studies,
University of Ulster,Coleraine,
Northern Ireland BT52 1SA, UK
E-mail address: bj.graham@ulst.ac.uk.
the comprehensive data available on US air transport
domestic markets, the task of analysing the e!ects of
airline behaviour in Europe is rendered much more di$cult
owing to a lack of detailed disaggregated statistical
data.
The book consists of six main chapters, the "rst of
which begins with a concise description of the main
trends in air transport and of the various demand and
supply economies arising from airline networks, before
providing a comprehensive historical background to pol-
icy formation in the EU. In#uencing factors, such as the
general disenchantment with economic regulation, the
highly restrictive bilateral system of exchanging interna-
tional tra$c rights, the experience gained from US do-
mestic deregulation and the powerful link between
EU Member States and their airlines are analysed.
The EU's achievement of a multilateral regime incorpor-
ating all eight freedoms of the air, albeit painfully slow
in the making, is somewhat dented by the reluctance
of each Member State to give up responsibility for
negotiating its own air tra$c rights with Third coun-
tries, as the book makes clear. The initial impact of
the Third Package of liberalising measures is also
outlined.
 Book reviews / Journal of Air Transport Management 6 (2000) 173}177
The ways in which Europe's air transport sector di!ers
from that in the US forms the focus of the second main
chapter of the book. The international nature of much of
Europe's air transport demand is described, as is the
large non-scheduled sector of the overall intra-EU mar-
ket. Europe's scheduled carriers are shown to be less
e$cient than their US counterparts, even after considera-
tion of their higher costs (e.g. landing fees, en route
charges, fuel). The direct involvement of European
governments in airlines through state ownership and
the provision of all manner of subsidies is identi"ed as a
major di!erentiating feature.
The book goes on to examine public policy within the
EU with regards to the provision of air transport infras-
tructure. The shortage of capacity evident at many of
Europe's major airports is discussed, a situation exacer-
bated by the development of hub and spoke operations
triggered by deregulation. Investment decisions to ex-
pand airport facilities have been made more complex by
the fact that most airports remain in public hands. Grow-
ing concerns with the environmental impact of expansion
are also having a major in#uence on policy. The thorny
issue of slot allocation is analysed, with the near total
lack of appropriate pricing mechanisms for these vital
resources highlighted. The existing EU Slot Regulation,
whilst endorsing the system of grandfather rights, aimed
to free up slots for new entrants, but has proved to have
had minimal e!ect in this regard. The issue of secondary
trading is raised, with the con#icting views of di!erent
agencies identi"ed. The fact that this practice was alive
and well does not seem to have cut much ice with all of
the EU's policy makers.
The impact on airport costs of the monopolistic supply
of ramp handling that has until very recently existed
throughout much of the EU is analysed. The Ground
Handling Directive is having the e!ect of slowly opening
up this important area of work to the forces of competi-
tion, but it will be 2003 before full liberalisation is
realised. The fragmented nature of Europe's Air Tra$c
Control is identi"ed as one of the most serious obstacles
preventing the sector achieving its full potential. Reluc-
tance of the Member States to hand over control of their
airspace to Eurocontrol so that a single, e$ciently co-
ordinated system can be operated and developed across
Europe is contributing to the enormous waste of
resources occurring as a result of the high levels of
delay.
It is highly appropriate that the next two chapters of
the book should be devoted to airline alliances, as it is the
rapid expansion of collaborative action of this kind
that has caused the most di$culty for policy makers in
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175
recent times. Aside from identifying the di!erent types of
alliance that have been established and analysing the
wide range of motives that carriers have for collaborating
with their competitors, the authors make the point that it
is often di$cult to judge the precise reasons why particu-
lar carriers have aligned themselves. The "ckle nature of
these alliance partnerships also adds to the di$culties for
regulators in deciding what action, if any, should be
taken against these collusive activities. The impact of
alliance formation on safety is analysed. The di$cult
question of predatory behaviour is also tackled. The
authors provide a theoretical framework for analysing
the economic e!ects of alliances. Other strategies
pursued by EU carriers, such as franchising, are also
reviewed.
The "nal chapter is devoted to the stability of Europe's
air transport markets. Whilst the rest of the book is
written for a readership with relatively little knowledge of
economics, this section really requires an in-depth know-
ledge of the subject. Of key concern here is whether or
not deregulation will produce long term stable air trans-
port markets in Europe. The question of market stability
rests on the existence or otherwise of a core. Competition
should lead to optimal supply, but if market forces are so
destructive then no carrier would be willing to even start
a service then an empty core exists. The authors are of the
view that Core Theory could provide a useful framework
for analysing competition in air transport markets
and thereby provide guidance on appropriate policy
measures.
Overall, the book provides an excellent review of the
many complex and often con#icting issues facing EU
policy makers in devising appropriate regulatory
measures to deal with a rapidly evolving air transport
sector and one in which even de"ning a market is fraught
with di$culties. Aside from Table 4.3, which purports to
show landing fees (in Cs) at London's airports in 1991
but in fact shows the times of departure of a series of
#ights from Heathrow in the period 1986}1988, the
book is well presented. I would have no hesitation
in recommending the book to those wishing to gain
a detailed understanding of the economic regulation of
air transport in Europe.
George Williams
Air Transport Group, College of Aeronautics,
Cranxeld University,
Cranxeld MK430AL, UK
E-mail address: g.williams@cran"eld.ac.uk.