Airline Deregulation

Can designer uniforms, satellite TV, the disappearance of first-class, signature potato chips, and the promise of more legroom counter-balance America's air travelers' displeasure with congested airports, airline safety standards, and many flight's "delayed" tag seen on departure boards? No. However, low fare prices can, and have been the reason for much of the success America's airline industry has seen since 1978 when the government gave up determining the fares domestic airlines could charge and the routes they could serve. Today, boutique airlines such as JetBlue, Ted, Song, and Southwest continue to have early success thanks to The United States Airline Deregulation Act. Alfred E. Kahn, architect of the deregulation, cites it as being, "� a dramatic event in the history of economic policy. It was the first thorough dismantling of a comprehensive system of government control since the Supreme Court declared the National Recovery Act unconstitutional in 1935"(1). This policy has enabled the average American, who before 1978 was not only restricted by gouging ticket prices, but possibly also affected by unavailable markets, allowing him now to get where he wants, when he wants, and most recently, for how much he wants to spend. Of course carte blanche does not come without a price. More than what basic consumers have to endure through the success of the deregulation, the economy bares a greater weight by what George Williams likes to describe as, "� a limited reeme

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he industry now uses that has connected so many cities, and allowed more people than ever to access them. Dipendra K. Sinha beautifully and concisely explains the "hub-and-spoke" system of air travel: Airlines in America have discovered that the most efficient way to move people between the greatest number of destinations is to use route networks that look like spokes radiating from a hub. Once again, few people predicted that this would happen. By routing flights through a hub, airlines found they could offer services to more cities while operating their planes at closer to full capacity. Passengers with an airline that operates ten flights into its hub can travel between 100 pairs of cities. If the airline doubles the destinations it flies between, then the number of possible city-pairs quadruples(33). For the first ten to fifteen years after deregulation the hub system revolutionized air travel. Easily could someone bounce across the U.S. and do so affordably. But a couple of manifestations grew out of the hub system that could have easily been handled but were not. First, huge increases in takeoffs and landings at hub airports accounted for many of the delays seen early on when the system changed. A result of so

Category: Government - A