Airline Deregulation Act Of 1978 Signed - 1398 Words

INTRODUCTION 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 was growing dramatically during the 1960s and mid-1970s. Due to the steady increase in the demand, airlines were facing three major difficulties- lack of free and stable market, high ticket prices leading to poor productivity, and rising†¦show more content†¦Section four, will be an overview of post-deregulation strategies and its success. Section five, will address the present day oligopolistic domestic airline market and explain how it is hurting social welfare. Section six, will present methods such as â€Å"mergers† or â€Å"alliances† which are being utilized to prevent competition. Section seven, will outline the major historic event of 9/11 and the impact it had on the airline industries, as it strongly called for government involvement. Lastly, I will conclude with few remarks. SECTION TWO: History of the airline industry and the CAB The beginning of government-imposed regulations on the airline industry can be dated back to the passage of the Civil Aeronautics Act in 1938. (Millbrooke, 2006) The Civil Aeronautics Act was responsible for transferring federal responsibilities for non-military aviation from the Bureau of Air Commerce to a new independent agency referred to as the Civil Aeronautics Authority. The Civil Aeronautic Authority soon became Civil Aeronautics board (CAB) and had three major functions: to award routes to airlines, limit the competition by controlling the entry of new air carriers into the market, and to regulate the air fares. (Millbrooke, 2006) The established practices of the commercial passenger can be dated even further back to the policies of Walter Folger Brown, the U.S. postmaster general in