Editing Airline (section)

==Regulation==
{{more citations needed section|date=July 2020}}

===National===
[[File:British Airways (27078321943).jpg|thumb|[[Union Jack]] tails of [[British Airways]], UK's [[flag carrier]]]]

Many countries have [[Flag carrier|national airline]]s that the government owns and operates. Fully private airlines are subject to much government regulation for economic, political, and safety concerns. For instance, governments often intervene to halt airline labor actions to protect the free flow of people, communications, and goods between different regions without compromising safety.

The United States, Australia, and to a lesser extent Brazil, Mexico, India, the United Kingdom, and Japan have "deregulated" their airlines. In the past, these governments dictated airfares, route networks, and other operational requirements for each airline. Since deregulation, airlines have been largely free to negotiate their own operating arrangements with different airports, enter and exit routes easily, and to levy airfares and supply flights according to market demand. The entry barriers for new airlines are lower in a deregulated market, and so the U.S. has seen hundreds of airlines start up (sometimes for only a brief operating period). This has produced far greater competition than before deregulation in most markets. The added competition, together with pricing freedom, means that new entrants often take market share with highly reduced rates that, to a limited degree, full service airlines must match. This is a major constraint on profitability for established carriers, which tend to have a higher cost base.

As a result, profitability in a deregulated market is uneven for most airlines. These forces have caused some major airlines to go out of business, in addition to most of the poorly established new entrants.

In the United States, the airline industry is dominated by four large firms. Because of industry consolidation, after fuel prices dropped considerably in 2015, very little of the savings were passed on to consumers.<ref>"Too Much of a Good Thing." ''The Economist'' 26 March 2016: 23. print.</ref>

===International===
[[File:La Maison de l-OACI - 11a.jpg|thumb|[[International Civil Aviation Organization]] headquarters in [[Montreal]]]]

Groups such as the [[International Civil Aviation Organization]] establish worldwide standards for safety and other vital concerns. Most international air traffic is regulated by bilateral agreements between countries, which designate specific carriers to operate on specific routes. The model of such an agreement was the [[Bermuda Agreement]] between the US and UK following World War II, which designated airports to be used for transatlantic flights and gave each government the authority to nominate carriers to operate routes.

Bilateral agreements are based on the "[[freedoms of the air]]", a group of generalized traffic rights ranging from the freedom to overfly a country to the freedom to provide domestic flights within a country (a very rarely granted right known as [[cabotage]]). Most agreements permit airlines to fly from their home country to designated airports in the other country: some also extend the freedom to provide continuing service to a third country, or to another destination in the other country while carrying passengers from overseas.

In the 1990s, "[[open skies]]" agreements became more common. These agreements take many of these regulatory powers from state governments and open up international routes to further competition. Open skies agreements have met some criticism, particularly within the European Union, whose airlines would be at a comparative disadvantage with the United States' because of [[cabotage]] restrictions.