## COMPARISON OF CHARACTERISTICS OF REGULATION/DEREGULATION AMONG THE USA, THE UK AND JAPAN

This comparison table was compiled by the ERI staff members, based on the eleven industry papers presented by the co-study participants. The staffs are responsible to any inadequateness of the references and misunderstandings. For quotations, please use the original industry papers.

ITEMS	JAPAN	USA	UK
A. BRIEF HISTORY	The JAL was established in 1952, then reorganized as a half-public corporation. The ANA was born in 1957. In 1970 and 1972 a major policy change was conducted, which established the TDA, and which segmented domestic and int'l markets with the big three, the so-called 1970-1972 airline regulation regime. The trunk route market grew much faster, allowing airlines to cross-subsidize. The "old regime" had to be altered because of int'l environment. The NCA's entry in int'l cargo transport brought about a collapse of the JAL's monopoly. The Japan-US negotiation that started in 1985 concluded that three new entry each be allowed. The new policy in 1986 allowed promotion of competition by introducing "double-tracking" (2-carriers in one route) and "triple-tracking" routes. However, the regulatory change was rather limited because it was implemented without modifying the regulatory framework of the Civil Aeronautics Law. In 1994 the Law was amended, allowing flexible discount rate setting.	The Civil Aeronautics Act of 1938 remained until 1978 basically unchanged. The CAB gave 16 carriers which had operated then the "grandfather" rights and granted certificates for the route they served. The CAB never granted trunk route award for new entrants, though new entry into feeder service, commuter, and charter were gradually allowed. Fares were subject to rate-of-return regulation, and cross-subsidization was seen with fares higher-than-cost long routes and vice versa. Airlines competed with service quality, such as equipment and flight frequency. The regulation began to be criticized since the 1950s. The CAB regulatory stance was somewhat relaxed in 1975. Alfred Kahn was appointed chairman of the CAB, accelerating the process for deregulation. Finally in 1978 the Airline Deregulation Act passed, phasing out entry (1982), exit, and fare (1983) regulations. In 1985 the CAB was abolished.	British Airways was formed in 1972. Also existed was British Caledonian Airways (Bcal) as a result of the 1969 UK policy change to introduce competition. The Civil Aviation Authority (CAA) gave some preference on licensing policy to BCal. Until 1981 BA was operated as a public corporation. In spite of rationalization efforts, its financial performance was relatively poor. Since 1979 preparation for privatization of BA started. In 1984 BA became a public limited company. In 1987 the Gov't sold the entire stake. The Civil Aviation Act of 1980 required more liberal policy. But in 1986 BCal ran into financial difficulties, and BA acquired BCal and thereby enhanced its leading position further. In the 1980s major deregulation measures were also taken, such as domestic fare and route licensing deregulation. Many entry barriers into domestic services were dismantled. The exception was access to Heathrow airport because of congestion and the slot allocation system, so that no airline that had not been operating from Heathrow before 1977 would be granted access. This ban was lifted in 1991, but the allocation procedures continue to afford considerable advantage to incumbent operators.