Airline Deregulation Essay - 1046 Words

On October 24, 1978, President Carter signed into law the Airline Deregulation Act. The purpose of the law was to effectively get the federal government out of the airline business. By allowing the airlines to compete for their customers travel dollars, was the thinking, that fares would drop and an increased number of routes would spring up. Expected Results The results of airline deregulation speak for themselves. Since the government got out of the airline business, not only has there been a drop in prices and an increase in routes, there has also been a remarkable increase in airline service and safety. Airline deregulation should be seen as the crowning jewel of a federal de-regulatory emphasis. Prices are down: Airline†¦show more content†¦A drop in fares has been the best result of the Airline Deregulation Act of 1978. It has been the impetus for the increase in the number of flights, which in turn has spurred a drive for greater safety in airlines. But with the current airline market, this development has given us one negative. Since ticket prices have dropped to new lows, the realities of an industry which operates on such economies of scale dictates that only a few competitors have the capacity to operate within the market. This is not the desired effect of either political side on this issue, but it is an economic nece ssity with the environment that has been created, very similar to that of public utilities and phone companies. The Best of Both Worlds The U.S. airline market admittedly operates in an oligarchal fashion. But is this not the best policy for air travel? The success of the large carriers has enabled a drop in fares, and while entry into the market is difficult, it is not impossible. Upstarts such as Southwest Airlines are able to find a market niche and exploit it into profitability. Maybe benevolent oligarchy should be the term... Turn the Market Loose! Those in the de-regulation camp see an opportunity to expand on the Deregulation Act. When the act was written, the government was taken out of the business of setting fares and routes. But various municipalities still retain ownership over airports. Given the massive improvementsShow MoreRelatedAirline Deregulation1054 Words   |  5 Pages1978, President Carter signed into law the Airline Deregulation Act. The purpose of the law was to effectively get the federal government out of the airline business. By allowing the airlines to compete for their customers travel dollars, was the thinking, that fares would drop and an increased number of routes would spring up. Expected Results The results of airline deregulation speak for themselves. Since the government got out of the airline business, not only has there been a drop inRead MoreAirline Deregulation1587 Words   |  7 Pages 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, busesRead MoreThe Deregulation Act Of The Airlines846 Words   |  4 Pagescorroboration that the real cost has not declined after the act does not relate to airlines profit. Steven A. Morrison, the chair of the Department of Economics at Northeastern University, discusses the deregulation affects in his article. Although he evaluates deregulation to be good for the consumers, he argues that the deregulation act has been detrimental to the airlines despite the increase in load factors. Deregulation has created ever-increasing competition that even after mergers, increased efficiencyRead Mor eThe Deregulation Of The Airline Industry1037 Words   |  5 Pagesput all commercial airlines under the Railway Labor Act. Since then, there was a period of 42 years under economic regulation where the government oversaw labor relations. Since deregulation, the goals of collective bargaining have not changed much, nor have the objectives of management and labor unions. (Wensveen, 2011, p. 422) The deregulation of the airline industry may have been a win for passengers, but most likely not a win for labor groups. Prior to deregulation the airline industry was highlyRead MoreDeregulation of the Airline Industry1754 Words   |  8 PagesDeregulation of the Airline Industry The airline industry has been subject of intense price competition since it was deregulated, and the result has been a number of new carriers which specialize in regional service and no-frills operations. These carriers typically purchase older aircraft and often operate outside the industry-wide computerized reservations system. In exchange for these inconveniences, passengers receive low fares relative to the industry as a whole. This research examinesRead MoreAirline Deregulation Act Of 1978 Signed1291 Words   |  6 PagesINTRODUCTION Airline deregulation was the process of removing the government imposed regulations on the entry of new airlines as well the airline fare limiting the competition and growth of the airline industry. In the United States, airline deregulation mainly refers to the Airline Deregulation Act of 1978 signed by President Carter. President Carter signed the Act, but the act was proposed initially during Nixon’s administration, and carried through Ford administration. The airlines industry wasRead MoreAirline Deregulation Act Of 1978 Signed1398 Words   |  6 PagesINTRODUCTION Airline deregulation is the process of removing the government-imposed regulations on the entry of new airlines as well the airline fare limiting the competition and growth of the airline industry. In the United States, airline deregulation mainly refers to the Airline Deregulation Act of 1978 signed by President Carter. President Carter signed the Act, but the act was proposed initially during Nixon’s presidency, and was carried out by the Ford Administration. The airline industry wasRead MoreThe Airline Deregulation Act Of 1978842 Words   |  4 Pageschanged how we live and experience the world as a result of the airline industry - we are able to settle, travel, and conduct business in places once deemed remote and inaccessible, and our world is undoubtedly more interconnected. Traveling by air has become a commonplace service, altering our perception of distance and diminishing travel time, and the industry is continuously making efforts to improve and advance. The Airline Deregulation Act of 1978 within the United States promulgated an era ofRead MoreThe Airline Deregulation Act Of 19781435 Words   |  6 Pageschanged how we live and experience the world as a result of the airline industry - we are able to settle, travel, and conduct business in places once deemed remote and inaccessible, and our world is undoubtedly more interconnected. Traveling by air has become a commonplace service, altering our perception of distance and diminishing travel time, and the industry is continuously making efforts to improve and advance. The Airline Deregulation Act of 1978 within the United States promulgated an era ofRead MoreNational Airline Market Analysis : The Airline Deregulation Act Of 19781702 Words   |  7 PagesNational Airline Market Analysis In response to this foreign competition and domestic pressures the Airline Deregulation Act of 1978 was passed. Deregulation meant the market would be generally free from government controls and operate under free-market principles. By the early 1980s new carriers flooded the market causing an initial drop in fare prices. In this new market Airlines such as Pan American and TWA suffer financially. Many of the large legacy airlines that operated successfully under