Airline Deregulation
Airline Deregulation act of 1978
Aston A Samms Embry Riddle Aeronautical University
Abstract
The United States Airline Deregulation Act of 1978 was a dramatic turning point in America. It was the first systematic dismantling of a comprehensive system of government control since the Supreme Court declared the National Recovery Act unconstitutional in 1935. It was also part of a broader movement that, with varying degrees of thoroughness, transformed such industries as trucking, railroads, buses, cable television, stock exchange brokerage, oil and gas, telecommunications, financial markets, and even local electric and gas utilities. Since the Airline Deregulation Act of 1978, the airline industry has experienced significant growth, productivity, and the public has seen significant decreases in fares. The effects that Airline deregulation has had are generally a positive effect on the industry. This essay examines how further deregulation of the federally controlled and owned air traffic control systems will allow for further growth of the industry in the future.
Airline Deregulation
In 1978, economic policy experienced a dramatic event that would change the airline industry for decades to come. The United States Airline Deregulation Act of 1978 effectively broke down the government control of the industry and allowed the airline industry to flourish over the next 25 years. Before deregulation, the airlines were tightly controlled by the federal government. Because of this micromanagement, airline companies were few and competition was scarce. Prior to deregulation aircraft travel was a costly mode of transportation which was limited to the upper class. Because of the tight control the government had on it, the industry saw little, if any, significant growth. “The Airline Deregulation Act of 1978 phased out the government's control over fares and service and allowed market forces to determine the price and level of domestic airline service in the United
Aston A Samms Embry Riddle Aeronautical University
Abstract
The United States Airline Deregulation Act of 1978 was a dramatic turning point in America. It was the first systematic dismantling of a comprehensive system of government control since the Supreme Court declared the National Recovery Act unconstitutional in 1935. It was also part of a broader movement that, with varying degrees of thoroughness, transformed such industries as trucking, railroads, buses, cable television, stock exchange brokerage, oil and gas, telecommunications, financial markets, and even local electric and gas utilities. Since the Airline Deregulation Act of 1978, the airline industry has experienced significant growth, productivity, and the public has seen significant decreases in fares. The effects that Airline deregulation has had are generally a positive effect on the industry. This essay examines how further deregulation of the federally controlled and owned air traffic control systems will allow for further growth of the industry in the future.
Airline Deregulation
In 1978, economic policy experienced a dramatic event that would change the airline industry for decades to come. The United States Airline Deregulation Act of 1978 effectively broke down the government control of the industry and allowed the airline industry to flourish over the next 25 years. Before deregulation, the airlines were tightly controlled by the federal government. Because of this micromanagement, airline companies were few and competition was scarce. Prior to deregulation aircraft travel was a costly mode of transportation which was limited to the upper class. Because of the tight control the government had on it, the industry saw little, if any, significant growth. “The Airline Deregulation Act of 1978 phased out the government's control over fares and service and allowed market forces to determine the price and level of domestic airline service in the United
Cited: Page Author: Hecker, Jay Etta Z. “Reregulating the Airline Industry” Source: GAO Reports, 6/12/2006, p1, 49p, 17 Graphs, 1 Map Author: Skinner, Samuel K. Source: Vital Speeches of the Day, 4/1/91, Vol. 57 Issue 12, p363, 4p Author: Dobbs, Lou “Headed for Crash Landing” Source: U.S. News & World Report, 12/6/2004, Vol. 137 Issue 20, p64-64, 1p, 2