Re-introduced competitive biding as a means for commercial airlines to procure mail contracts.  The separation of the airlines from manufactures. During this time many of the manufacturers of aircraft were as well providing passenger service such as; United Aircraft and North American Aviation.  

As a result of this law companies like United Aircraft disassociated from passenger travel and United Airlines was created to provide passenger travel as we know it today. The main reason for this piece of legislation was in consideration for safety. This Act also gave authority to 

• The United States Postal Service to award postal contracts

• The Interstate Commerce Commission would set airmail rates

• The Bureau of Air Commerce would have authority over the airways and regulate air safety.

Supporters of former postmaster Brown, however, could point to his practical achievements. During his tenure, aircraft had actually become more efficient and the cost of carrying the mail had fallen dramatically. In 1933, costs averaged just 54 cents per mile (34 cents/kilometer) over a wide system of 34 routes that spanned 27,000 miles (43,453 kilometers).   

Still, the Black hearings raised serious questions about the legality of the contracts awarded under Brown's leadership. On February 19, 1934, President Roosevelt canceled all existing airmail contracts. As a temporary measure, the President directed General Benjamin D. Foulois of the Army Air Corps to organize a new airmail operation that would use military planes and pilots to fly the mail. The new postmaster general, James Farley, reduced the airmail route system to 9,000 miles (14,484 kilometers).  

The change proved disastrous. Army pilots had not been trained for cross-country or bad weather flying, and their aircraft had no landing lights or navigation instruments found in civilian aircraft. During training alone, three pilots were killed. A storm in the first week of operation killed two more pilots, injured six, and destroyed eight planes. The Air Corps stopped flying for a week, then tried new aircraft such as the Martin B-10. More crashes followed. By March 10, 12 pilots had died in 66 crashes or forced landings. Costs to fly the mail quadrupled, rising to $2.21 per mile. The administration came under scorching criticism.  

On May 8, Roosevelt and Postmaster Farley returned to private contract airmail, but with conditions attached. No airline company that had held a contract before the government takeover could now operate. To circumvent these rules, the airlines simply changed their names. American Airways became American Air Lines, Northwest Airways became Northwest Airlines, EAT/Eastern Air Transport was now Eastern Air Lines, and TWA changed to TWA Inc. Boeing Air Transport became United Air Lines.   

Senator Black looked for different ways to punish the airlines. On June 12, 1934, he introduced the Black-McKellar Bill, which became known as the Air Mail Act of 1934. Its main provision broke up the aviation holding companies, large corporations that owned both aircraft manufacturing companies and airlines. The act also stated that the government would set airmail contracts, routes, and schedules; fix subsidy rates and airmail payments; and regulate the airways and license pilots. Furthermore, the temporary, low bids that had been accepted from the airlines were locked in place. All of the airmail carriers began to lose money.

The Need For Federal Aviation Regulation The Air Mail Act Of 1925 The Air Mail Act 1926 The Air Mail Act Of 1930 The Air Mail Act Of 1934 The Civil Aeronautics Act Of 1938 The Federal Airport Act Of 1946 The Federal Aviation Act Of 1958 Airport and Airway Development Act 1970 Airline Deregulation Legislation 1978 Airport and Airway Improvement Act 1982 General Aviation Revitalization Act of 1994