Review of Industrial Organization
14: 85–90, 1999.
1999 Kluwer Academic Publishers. Printed in the Netherlands.
A Note on Public Sector Integration: The Decline of
British Naval Aviation, 1914–1945
MANLEY R. IRWIN
Professor Emeritus, Whittemore School of Business and Economics, University of New Hampshire,
Durham, NH 03824, U.S.A.
Economists have traditionally conﬁned their study of mergers to the economy’s
private sector. Over the years a body of knowledge has contributed to our under-
standing of corporate buyouts and acquisitions. But what about the public sector?
Can an industrial organization framework tell us anything about the performance
of a public enterprise once amalgamated?
This note suggests that industrial organization can offer some insight into gov-
ernment mergers. Our case study focuses on Great Britain’s treatment of its naval
aviation unit, the Royal Naval Air Service. The time, 1914 to 1945, covers naval
aviation’s evolution from the First through the Second World War. Speciﬁcally,
Britain’s aviation consolidation played a pivotal role in arresting the Royal Navy’s
once heralded lead in naval aviation.
II. The Setting
The Royal Naval Air Service (RNAS), the aviation wing of the Royal Navy, was
established by none other than Winston Churchill in 1913. A year later Britain’s
ground troops were committed to seige warfare in the trenches of Belgium and
Naval historians have acknowledged the RNAS’ war record of innovative
achievement. The RNAS was the ﬁrst to deploy the torpedo plane; the ﬁrst to
engage in strategic bombing; the ﬁrst to introduce the aircraft carrier. One U.S.
historian has asserted that by the Armistice of 1918, the Royal Navy was
the world’s leader and pioneer in virtually every facet of naval aviation,
strategically, tactically, technologically, administratively.’
Layman, R.D. Naval Aviation is the First World War (Annapolis, MD: Naval Institute Press)
1996, p. 195.