|Airline Deregulation Legislation Act 1978|
The Airline Deregulation Act is a United States federal law signed into law on October 24, 1978. The main purpose of the act was to remove government control over fares, routes and market entry (of new airlines) from commercial aviation.
The Civil Aeronautics Board's powers of regulation were to be phased out, eventually allowing passengers to be exposed to market forces in the airline industry. The Act, however, did not remove or diminish the FAA's regulatory powers over all aspects of airline safety. The effects of this Act.
Senator Howard Cannon of Nevada introduced S. 2493 on February 6, 1978. It passed and was signed by Carter, becoming Pub.L. 95-504 on October 24, 1978.
The stated goals of the Act included
The Act intended for various restrictions on airline operations to be removed over four years, with complete elimination of restrictions on domestic routes and new services by December 31, 1981, and the end of all domestic fare regulation by January 1, 1983. In practice, changes came rather more rapidly.
Among its many terms, the Act:
Safety inspections and air traffic control remained in the hands of the FAA, and the act also required the Secretary of Transportation to report to Congress concerning air safety and any implications deregulation would have in that matter.
A 1996 Government Accountability Office report found that the average fare per passenger mile was about 9% lower in 1994 than in 1979. Between 1976 and 1990 the paid fare had declined approximately 30% in inflation-adjusted terms. Passenger loads have risen, partly because airlines can now transfer larger aircraft to longer, busier routes and replace them with smaller ones on shorter, lower-traffic routes.
However, these benefits of deregulation have not been distributed evenly throughout the national air transportation network. Costs have fallen more dramatically on heavily trafficked, longer-distance routes than on shorter, lighter ones.
Exposure to competition led to heavy losses and conflicts with labor unions for a number of carriers. Between 1978 and mid-2001, nine major carriers (including Eastern, Midway, Braniff, Pan Am, Continental, America West Airlines, and TWA) and more than 100 smaller airlines went bankrupt or were liquidated—including most of the dozens of new airlines founded in deregulation's aftermath.
For the most part,
smaller markets did not suffer the erosion of service predicted by some
opponents of deregulation. However, until the advent of low-cost
carriers, point-to-point air transport declined in favor of a more
pronounced hub-and-spoke system. The larger hubs were served with larger
aircraft, the spokes with smaller. While more efficient for serving
smaller markets, this system has enabled some airlines to drive out
competition from their "fortress hubs." The growth of low-cost carriers
such as Southwest Airlines and Pacific Southwest Airlines has brought
more point-to-point service back into the United States air transport
system, and contributed to the development of a wider range of aircraft
types that are better adaptable to markets of varying sizes.
The Need For Federal
The Need For Federal Aviation Regulation
|©AvStop Online Magazine Contact Us|
Grab this Headline Animator