TIARTO Primary Author

Airlines deregulation is intended to remove state-sponsored protectionism, leading to economic liberalization so that entry conditions are easy and cheap, but the results were mostly disappointing. The research used a method of Structure, Conduct and Performance (SCP method). The results of this study indicate that the market structure of oligopoly is better than before deregulation. Conduct, there is price competition so tariff becomes cheaper. The performance of airlines is also getting better as shown by the increasing of production efficiency. Significant reversal of market share before and after deregulation of comparison between SOEs and POEs from 75.40%: 24.60% to 34.75%: 65.25%. Economic regulation by the government dilemma in addition to causing differences of views between the interests of producers and the interests of consumers, also the industry becomes more concentrated on the main players, and serves as a tool pricing and prevent entry of new competitors. Tribulation increased : increased number of flight delays, skyrocketing prices during busy times, the difficulty of getting tickets happens at the last minute and so forth, fewer airlines and routes, airport density.