The Airmail Act of 1930

The Airmail Act of 1930 changed the method in which the United States Post Office awarded mail contracts, eliminating competitive bidding. The Act created a payment structure based on the weight of the load carried by the aircraft per mile rather than a flat rate per mile regardless of the weight of the load.

Contracts were awarded based on aircraft payload. Companies that had large aircrafts were more likely to be awarded contracts rather than those companies with smaller aircrafts. This Act encouraged airline carriers to purchase large aircrafts increasing the likelihood of being awarded airmail contracts. It also stimulated the carriers to fill space on the aircraft with passengers.