"U.S. airlines have lost nearly $60 billion (2009 dollars) in domestic markets since deregulation, most of it in the last decade. More than 30 years after domestic airline markets were deregulated, the dismal financial record is a puzzle that challenges the economics of deregulation. I examine...

Airline fuel consumption is costly for the firms and for society as well due to a climate-change externality. We study how fuel price changes affect cost-minimizing choices by airlines that have implications for the extent of this externality. The airline industry's capital stock can be easily...