Airline_Deregulation_Act_of_1978

Airline Deregulation Act of 1978 Aviation Legislation Airline Deregulation Act I will discuss the deregulation of the airline industry. The Airline Deregulation Act of 1978 brought the reign of government oversight to an end. Also the United States bankruptcy act that set Laws on bankruptcy. The United States government had control and protected the airline industry for forty years. On October 24, 1978, president Jimmy Carter signed the Airline Deregulation Act. President Carter signing the 1978 ADA brought closure to government oversight. There was only two areas that the government would intervene with the public interest in mind. These areas were aviation safety and international relations. The Airline Deregulation Act purpose is to develop, encourage, and attain air transportation systems. The systems of transportation rely on quality, variety, and price. The act made many differences for the domestic airline industry. A direct result of the act was the phase out of the Civil Aeronautics Board and its authority over routes and fairs. The CAB route authority ended December 31, 1981 and rate authority ended Airline Deregulation Act December 31, 1983. On December 31, 1984 the CAB was done completely. After the Civil Aeronautics Board was finished airlines had to comply with antitrust laws governing commercial enterprise in the United States. The Department of Transportation was there to enforce these laws. With the CAB out of the picture, airlines did not have to get certificates to use a route for commercial use. Airlines could also raise rates at any time now. The act also got rid of economic regulations that set up barriers for competition. Their were safe guards put in place for the protection of carrier services. Air carriers were able to enter new markets and employees that would be affected by the act of 1978 were also protected. Harry Lawrence (2008), pgs 189-198. There was firm action against the Airline Deregulation Act of 1978. Many major airlines feared free competition and labor unions were afraid of nonunion workers. Safety advocates feared that safety in the airline industry would be sacrificed. The act passed with great public support. The act appeased a lot of major airlines with ample Airline Deregulation Act subsidies. If workers lost their jobs the act offered high unemployment benefits for them. Some short term effects of the deregulation were that airlines stopped routes to smaller cities and also introduced the hub and spoke routes. Airlines having a hub meant that many flights would stop at there hub even if it was not a direct route. This allowed the airline to keep planes in the air more and filled more seats. One major thing that deregulation allowed, is new airlines could start up. New airlines did not have to concede to the demands of larger airlines. In 1979 fares dropped and operating revenues for international and major national airlines grew to an all time high. Also in 1979 was the biggest climb in passengers. Three hundred seventeen million flew that year. Air fares from 1977 through 1992 dropped more than one-third. The estimation on how much ticket buyers saved was around $100 billion just in fares. Asif Siddiqi (centennialofflight.gov). In the 1970’s Senator Kennedy was convinced to lead the charge for deregulation. Deregulation was sought after by conservatives who Airline Deregulation Act did not like government in business and to consumers who thought air travel should be more affordable. After deregulation airports also needed to make some changes. Airports needed more gates and runways. A lot of other things were a necessity like restaurants, shops, ticket counters, rental car counters, and more public parking available. Their was three main components for the commercial air service. These components were air carrier, air traffic control, and airports. The ADA only controlled the air carrier side, which was the only one that had been deregulated. Airports today are sill running under some government policy, like before deregulation. The economy plays a direct role on how deregulation effects the airline industry. Things like fuel prices and travel demand way in on airline profits. Competition between airlines has knocked down profits greatly. After 9/11 the Transportation Security Administration was given security and safety regulations under the Department of Homeland Security. The TSA believed that government should handle certain things that relate to security. Congress in September of 2001 passed the Airline Deregulation Act Air Transportation Safety and System Stabilization Act. This act would award payments up to five billion dollars to reimburse airlines for shutting down post attacks. It also created up to ten billion dollars in loans for airlines that needed emergency capital to keep going. Freeing the airline industry has had lots of positives as well as some negatives. Overall air travel had increased and prices have fallen. Airlines made great improvements to make air travel better and more profitable. Air travel is much easier these days for the public. Airline Deregulation Act References 1) Harry Lawrence (2008), pgs 189-198 2) Asif Siddiqi (centennialofflight.gov)