Airline Deregulation Act of 1978

The following research is on the subject of the Airline Deregulation Act of 1978. Airlines in the United Stats are riding the crest of a wave of increased passenger travel the likes of which has not been seen since the introduction of the jet into commercial aviation in 1960. Passenger-miles are up, new orders for aircraft from both domestic and foreign manufacturers are up as the airlines replace their aging fleets and capitalize on new designs and new technology that allow them to fly more people on less fuel than ever before. And airline profits are up as well. To fly the new planes which carry people who have never flown before, the airlines are in a frantic scramble for new pilots, since it is also true that the "first generation" of World War II pilots is now retiring, and the airlines are wooing hundreds of pilots a month away from the armed forces.

Much of the responsibility for this vast influx of new passengers must go to the federal government, particularly the Civil Aeronautics Board, which over the last two years has undertaken a policy of loosening restrictions on the airline rate structure, a policy which has enabled air carriers to cut a variety of prices, attract more passengers, and still maintain healthy profits. These price-cutting policies culminated in the Airline Deregulation Act of 1978, which is the subject of this paper. We shall examine briefly the history of CAB regulation of the airlines, the policy changes made by the Carter Administrati

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place by the giants, forcing bankruptcies and mergers with those giants into just the kind of monopoly situation which the CAB is supposed to prevent. The total picture of airline service was, and continue to be, a complex one. American carriers operating overseas are not state-supported as are many foreign flag carriers, which were thus able to charge lower fares. Discount rates of a sort have always been available to a segment of the American flying public through charter (supplemental) carriers, but these usually had restrictions as to advance booking, tour affiliation, and so on which made them impractical for the majority of flyers. Of all the objections raised during the deregulation battle, some of the loudest have come from charter operators. In addition, the 1970's saw a virtual moratorium in the allocation of new route awards. The health of the airline industry is tied to the overall economic picture of the nation. It is also tied to the price of jet fuel, and thus to the price of oil; and the airlines were among the hardest hit by the Arab oil embargo and subsequent massive price increases. Nevertheless, the economy rebounded by 1976 and with the appointment of former economics professor Alfred Kahn to the C

Category: Government - A