a form of privatization, American airline deregulation influenced, to some degree, international airline privatization.
AIRLINE DEREGULATION IN THE UNITED STATES,
The commercial airline industry in the United States received its start in the mid 1920s from the airmail contracts let by the federal government (Moskowitz, Katz, & Levering, 1982, p. 677). Among the major American airlines which trace their beginnings to these airmail contracts are American Airlines, Eastern Airlines, Pan American Airways, and United Airlines.
From this start, the airline operators were able to gradually add passenger carrying routes and later, freight carrying operations, to supplement mail delivery. Several
airline companies flourished in the 1920s. Most of the new airline companies began to flounder soon after they were founded. In the mid and late 1920s, Herbert Hoover (later to become president of the United States) was the United States Secretary of Commerce. He is given great credit for the establishment and development of the commercial air transport industry (Lee, 1984, pp. 78-102). Hoover witnessed the financial and operational disasters which were occurring in the new industry. His office drafted, and he pushed through Congress, the Air Commerce Act of 1926. The Act brought federal government regulation to the airline industry.
This early government regulation covered every facet of the industry. It was brought about primarily at the behest of the industry, who brought their problems to the attention of Hoover. The industry wanted protection against over competition, so that with protected markets, they could develop the industry and the individual companies. They also got regulation in the areas of service and safety. Nevertheless, regulation proved to be good for the young industry. It provided the stable framework, within which the industry developed and thrived (Lee, 1984, pp. 78-102). The se...