The Airline Deregulation Act is a United States federal law which was enacted in 1978 to remove the control the government had over fare, the routes and entry of new airlines. This left the passenger airlines exposed to the forces of the market in the airline industry. The Civil Aeronautics Board which was responsible for controlling entry, exit, the pricing of the airline services and addressing the consumer issues was phased out. This meant that the passenger airlines were only limited to competing only for food, the quality of the cabin crew and the frequency available. This caused a drastic impact on the passenger airlines in the long run. As a result both frequency and the prices were very high since it cost more to fly. (Poole, 1998) The number of passenger seats which were initially occupied diminished due to the decrease in the number of passengers. Passengers decided to use other means of transport such as rail and road which was quite affordable at that moment. Small passenger airlines were shut down and also new airlines could not continue to render services due to the stiff competition from the well-established airlines. This eventually led to a decrease in the number of passenger airlines venturing in the air transport market.
Today, the airline industry is completely different from what it was before 1978. Initially the Civil Aeronautics Board was responsible for determining the routes in which each airline flew and controlling the prices in which was charged. Today, the airline industry is market driven where the customers determine the price and the level of service to be offered. Imposing economic regulation will open airline businesses to new members with the changing market conditions. (US.GAO, 1996) This will lead to a new number of passenger airlines offering direct and low cost flights. In addition, there would be availability of pilots, the mechanics and airline professionals who would aid in the activities. Some of the regulations should enable most of the airlines have air travel programs such as rewarding frequent customers with free tickets or other benefits. Other programs also include discount in fares or a customer enrolling in travel program and earns points for every mile flown and the points can be later converted to first class tickets or business class tickets. This will attract more passengers to airlines offering these special programs since most of the consumers are served in a way that is pleasing to them. This will result to a large number of passengers in the airline industry both domestic and international.
The Justice Department allowed for consolidations to take place in order to provide better and quality services to the consumers. Over the years, the cost of flying was extremely high and the price of fuels was high, this led to a decrease in the number of passengers since only very few could afford the high fares. Competition was high between the large markets and the small markets. The small markets passenger airlines were then phased out of business. Consolidations took place in order to provide consumers with safety travels which was highly regarded. Consumers were able to travel safely in the hands of a well-trained pilots and cabin crew who were professionals. Consolidations also enabled code sharing between major airlines and regional carriers. This enabled greater control over the important services that were rendered to the passengers. (Havel, 1997). Code sharing also enabled a carrier to hand off a passenger to another specific carrier in order to get the passenger to a certain destination that the first carrier did not serve directly. The passenger therefore only needed to buy one ticket then the airline issuing the tickets will make the arrangements for the passenger in the second carrier. This made travelling more convenient for every passenger.
References
Poole, Robert W. Jr., and Viggo .B. (1998). Airline Deregulation: The Unfinished
Revolution.
U.S. GAO. (1996). Airline Deregulation: Changes in Airfares, Service, and Safety at Small,
Medium- Sized, and Large Communities.
Havel, Brian F. (1997). In Search of Open Skies: Law and Policy for a New Era in International
Aviation. A Comparative Study of Airline Deregulation in the United States and the
European Union. Boston: Kluwer Law International.
