Airline Deregulation essays

Airline Deregulation essays The airline deregulation act is considered as one of the important economic policies of the United States of America. The Civil Aeronautics Act of 1938 controlled all the airliners in US till the rising fuel costs and increasing public pressure forced the government to deregulate the airlines in 1978. The airlines deregulation act, signed on October 1978 removed the barriers and opened the way for a new market. The previous price controls and route restrictions were withdrawn and this offered airliners the freedom to set competitive prices. The public were the immediate beneficiary of the deregulation act as it made air travel more affordable for them. The deregulation act had a multi pronged effect as it reduced the prices, created more businesses and jobs and improved the operating efficiency. [Christine Chmura] Deregulation creates an open market that generates more competition, which ultimately favors the consumer. This contrasts with a monopoly or oligopoly situation where only a single or a few giants take control of the market. Before the opening up of the market traveling prices were unbelievably high as there were only very few companies in the field and the whole market profits were shared amongst them. . However the opening up of the market had serious implications for some of the old companies. While many old airline services like Pan American, Frontier struggled under the open market new entrants like South West airlines', Peoples Express', etc had great success. People's Express' in particular offered highly competitive prices and with a flourishing business the airliner earned a revenue of more than $1 billion between 1980 and 1985. [Asif Siddiqi]. The success of the airline deregulation did have a tremendous impact on many other sectors particularly the transport sector. The whole industry structure has changed in the transport sector. The net result of...