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Effects of Deregulation on Domestic Air Carriers

It is proposed that a research study be conducted to assess the effects of airline deregulation on domestic air carriers in the United States. Airline deregulation in the United States is over 12 years old in 1992 (Kahan, 1992, p. 22).

The problem to be investigated is developed in this section. Problem statement, background information, study purpose, research questions, and conceptual definitions are included in the development of the problem.

When the airline industry was deregulated, one of the main objectives was the improvement of consumer service that was to be achieved through the introduction of more competition into the industry. Within two years of full deregulation, however, domestic air carriers began to fail financially. Now, in 1992, the industry is far more concentrated than it was prior to the implementation of deregulation (Borenstein, 1992, pp. 4573).

Complaints about customer service and airline safety have increased during deregulation (Rose, 1992, pp. 7594). These complaints may or may not be valid. Increased competition, however, has not occurred, and it was through increased competition that the proponents of deregulation claimed consumer service improvements would occur. The problem that will be investigated in the proposed research study is the effect that airline deregulation has had consumer service and safety.

Deregulation of the air transport industry in the United States was initiated by the Carter Administration in 1978 (Thayer, 1983, pp. 359363). Momentum was building for deregulation of the industry in the face of resistance by most of the minor and some of the major American airline companies (Meyer and Oster, 1981, p. 107). The principal concern of the smaller airlines with respect to deregulation was a fear that the larger airlines would (1) enter the profitable mediumhaul markets which regulation of the industry had denied to them, (2) underprice the smaller airlines opera...

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Effects of Deregulation on Domestic Air Carriers. (1969, December 31). In LotsofEssays.com. Retrieved 12:48, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1691406.html