Book Reviews

• Author: Jeremy J. Warford
• Published date: 01 June 1974
• Date: 01 June 1974
• DOI: 10.1177/0003603X7401900225
• Subject Matter: Book Reviews

BOOK

REVIEWS

459

William E. O'Connor, Economic Regulation of the World's

Airlines: APolitical Analysis, New York:

Praeger

(1971),189 pp., $15.00.

The objective of Mr. O'Connor's study is to evaluate the

present

method of economic regulation of the world's airlines,

and

to consider possible alternatives. The basic problem is

that

whereas governments cooperate

very

effectively-and

on a multilateral basis through

ICAO-in

the field of aviation

safety, such cooperation is clearly lacking when

it

comes to

economic matters. Thus, the

right

of airlines to establish

service to other countries, the control of the frequency of

flights

and

capacity of aircraft,

and

establishment of

fare

structures, constitute an

arena

characterized by endless bi-

lateral

bargaining,

and

a complex

pattern

of some 2,500 bi-

lateral

agreements. Drawing attention to the waste

and

in-

efficiency inherent in this situation, Mr. O'Connor rejects both

the desirability and political feasibility of alternatives such

as international monopoly or completely unregulated competi-

tion, concluding

that

some form of multilaterally regulated

competition is required. To this end, he critically reviews the

postwar history of attempts to establish multilateral agree-

ment on international airline regulation, evaluating suc-

cessive proposals made before international conventions,

and

assessing the chances of implementing the

better

ones.

The various proposals

that

have been made

are

then

rated

with respect to five specific objectives; namely, the extent

to which they achieve the benefits of centralized economic

planning, simplicity, lower fares, the welfare of less developed

countries (LDC's)

and

their contribution to world peace. Ac-

cording to these criteria,

it

is concluded

that

from the stand-

point of "world public interest," the best of the various sys-

tems would be

that

contained in a proposal submitted to and

rejected by the Provisional Civil Aviation Organization

(PICAO, precursor to ICAO) in 1946. The so-called "1946

Draft"

called

for

the establishment of an International Civil

Air

Transport

Board

which would fulfill a function somewhat

similar to

that

exercised within the U.S.A.

today

by the CAB,