Air Transportation Deregulation


Term Paper, 2004
7 Pages

Excerpt

Table of Contents

Abstract

Introduction

Deregulation

Civil Aeronautics Board

Struggling Through Deregulation

Conclusion

References

Abstract

One of the most significant events in the air transportation industry was the Airline Deregulation Act of 1978. This paper will review what deregulation, in general is, and then move specifically to the Airline Deregulation Act of 1978. From there, this paper will explore what effects the Act has had on the industry. By understanding these concepts, one can better understand the environment the industry now operates in, and how far it has come.

Air Transportation Deregulation

Introduction

One of the most significant events in the air transportation industry was the Airline Deregulation Act of 1978. This paper will review what deregulation, in general is, and then move specifically to the Airline Deregulation Act of 1978. From there, this paper will explore what effects the Act has had on the industry. By understanding these concepts, one can better understand the environment the industry now operates in, and how far it has come.

Deregulation

Deregulation is, in its most simplistic terms, when the government removes certain regulations on businesses, to encourage the industry. The premise behind deregulation is that with fewer regulations impeding operations, businesses will become more competitive. This increased competition will then result in higher productivity levels, increased efficiencies, and lower prices for consumers (“Deregulation”, 2004).

There have been some failures in attempts to deregulate certain industries. Most notably, the deregulation of the Savings and Loan industry in the 1980s was perceived as a failure and was subjected to re-regulation in order to balance out the industry. The Savings and Loan scenario is a perfect example of why regulation or deregulation must be handled responsibly and intelligently, taking into account and utilizing sophisticated economic theories to help predict the future results (“Deregulation”, 2004).

The Airline Deregulation Act was signed into law on October 28, 1978. The Act was created to remove governmental control and open up the passenger air transport industry to free market forces. As noted above, the desire was to increased efficiencies within the industry by promoting competition, which would hopefully lead to reduced airfares for consumers (“Airline Deregulation”, 2004).

Civil Aeronautics Board

Before the Act was enabled, the Civil Aeronautics Board (CAB) regulated all domestic air travel. They were in control of establishing fares, setting air traffic routes, and creating airline schedules. “The CAB promoted air travel, and due to their beliefs they held fares down in the short-haul market and let them be higher in the long-haul market. The CAB was also obliged to ensure that the airlines had a reasonable rate of return” (“Airline Deregulation”, 2004).

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Excerpt out of 7 pages

Details

Title
Air Transportation Deregulation
College
University of Phoenix
Author
Year
2004
Pages
7
Catalog Number
V57824
ISBN (eBook)
9783638521529
ISBN (Book)
9783656814894
File size
422 KB
Language
English
Tags
Transportation, Deregulation
Quote paper
Kimberly Wylie (Author), 2004, Air Transportation Deregulation, Munich, GRIN Verlag, https://www.grin.com/document/57824

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