Effects of Airline Bankruptcies on Travel Agencies INTRODUCTION The purpose of this researc

Prior to 1973, tourism was a major growth industry on a worldwide basis. The energy crises of 19731974 and 19791980 increased the costs of travel significantly, because of jet fuel price increases. Tourism growth suffered, as a result, during and shortly after each of the energy crises. Just as worldwide tourism was poised for another growth period in the early1980s, the most severe economic recession in more than 40 years hit the United States, and most other industrialized countries experienced economic recession soon afterwards. Thus, the anticipated international travel boom did not materialize.

In late1983, however, the United States economy entered a recovery period, and, in the following two years, most of the other industrial economies also began to recover. Thus, in 1984, the long hoped for international travel boom finally got under way. By this time, however, another problem had arisento cause anxiety and trouble for both the traveling public andtravel agency manag

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egulatory reform in the airline industry. While professing neither support for or opposition to deregulation, Robson was willing to experiment with the introduction of laissezfaire policies into the regulation of the industry. Under Robson's leadership, the CAB either permitted competition for the first time, or increased competition on what had in the past been either monopoly or nearmonopoly routes. These relatively small changes were viewed as revolutionary in the context of the existing regulatory system [2: 85]. In July 1976, the CAB voted permit regulated interstate air carriers to lower fares, so that they could better com pete with unregulated (by the CAB) intrastate carriers in California and Texas. This action was followed in February 1977 by a General Accounting Office (GAO) report contending that regulation of the airline industry had cost American 7consumers approximately $2 billion per year from 1969 through 1974 [2: 85]. The report recommended the introduction of greater price competition into the industry, and easier entry into the industry for new airline companies. The Carter Administration entered office at about the same time that the GAO report was issued. Economist Alfred Kahn was appoin
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Approximate Word count = 3229
Approximate Pages = 13 (250 words per page)