Airline Deregulation: Success or Failure?

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Shortly after World War I, the U.S. Government discovered the abilities of the modern airplane and created the idea of utilizing aircraft to transport mail across the country. In 1917, Congress approved funding to experiment with the idea of delivering mail by air. By 1920, the Post Office was delivering mail across the entire country, eliminating over 22 hours in delivery times of a coast-to-coast route. With the success of the airmail service and the growing popularity of civil aviation, the U.S. Government recognized the need to develop set standards for civil aviation and in 1926 created the Air Commerce Act of 1926. The Air Commerce Act of 1926 called for the government to regulate air routes, navigation systems, pilot and aircraft licensing and investigation of accidents. The act also controlled how airlines were compensated for mail delivery. Later in 1930, Postmaster General Walter Brown made recommendations which were later known as the Watres Act which consolidated airmail routes and opened the door for longer-term contracts with the airlines. Brown handled the situation regarding new contracts poorly by only inviting a hand selected list of large airlines to the negotiation table. This move pushed smaller airlines to complain and the issue was pushed to Congress. Following congressional hearings President Roosevelt later decided Brown’s scandal was too much to deal with and canceled all mail contracts completely and handed over air mail delivery responsibility to the U.S. Army. That decision was a disaster, and one month later, air mail was handed back over to the private sector. This time, however contract bidding was more structured and fair to all. It was then clear that the airline industry was back in full swing...

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...ll regulates several areas of aviation, such as flight crew and aircraft certification, maintenance, as well as the national airspace system. Slot management is also something that is regulated by a third-party group. In our capitalistic society, it is clear however that routes and fares are both items that are best driven by the market.

Works Cited

Avjobs.com - The History of Aviation. Retrieved 12/1 from http://www.avjobs.com/history/index.asp

Businessweek.com – Airline Deregulation, Revisited. Retrieved 12/1 from http://www.businessweek.com/bwdaily/dnflash/content/jan2011/db20110120_138711.htm

U.S. Centennial Flight Commission. Retrieved 12/1 from

http://www.centennialofflight.gov/essay/Commercial_Aviation/Dereg/Tran8.htm

Bureau of Transportation Statistics. Retrieved 12/1 from

http://www.bts.gov/press_releases/2010/bts031_10/html/bts031_10.html

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