AIRLINES DEREGULATION IN TURKEY

This paper focuses on the effects of regulation, deregulation and competition in the Turkish airline industry that has long been dominated by Turkey’s state-owned airline company, Turkish Airlines (THY). Before 2003, the industry was not yet open to competition. The necessary legal environment has not yet been established to ensure that private airline firms other than THY could also operate especially in the scheduled domestic flights and cargo transport. 13 firms along with THY that operated in the unscheduled flights were inadequate to trigger competition, to increase demand, and to attract investments in the entire industry. The airline deregulation movement of 2003 opened the market to competition. The movement released entry to the industry. Fares are begun to be determined by competition. This paper analyzes the pre- and post-reform structure of the industry. Accordingly, it deals with to reveal the effects of deregulation over industry structure and quality of service. Besides, by analyzing developments in the industry, we aim to present how the post-reform structure of the industry is reshaped.