Essay on Airline Deregulation

Essay on Airline Deregulation

Length: 1036 words (3 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview







On October 24, 1978, President Carter signed into law the Airline Deregulation Act. The purpose of the law was to effectively get the federal government out of the airline business. By allowing the airlines to compete for their customers' travel dollars, was the thinking, that fares would drop and an increased number of routes would spring up.
Expected Results


The results of airline deregulation speak for themselves. Since the government got out of the airline business, not only has there been a drop in prices and an increase in routes, there has also been a remarkable increase in airline service and safety. Airline deregulation should be seen as the crowning jewel of a federal de-regulatory emphasis. Prices are down: Airline ticket prices have fallen 40% since 1978. Flights are up: The number of annual departures is up from 5 million in 1978 to 8.2 million in 1997. Flights are safer: Before deregulation, there was one fatal accident per 830,000 flights, now the rate is one per 1.4 million flights. So what's the problem?
Misplaced Priorities


It appears that the Clinton administration and some in Congress will cut off their nose to spite their face. By almost all measurable ways, airline deregulation has been a success. But in response to a few small start-up airlines complaining to the Department of Transportation about "predatory pricing," Washington legislators and regulators are poised to act. "Predatory Pricing" is code for: "fares are too cheap for some airlines to compete in that market 'cause they will lose money". In response, the Department of Transportation recently proposed guidelines to limit the maximum number of seats an airline can offer on particular routes and which forbid them from dropping prices below certain levels, all in the name of "fair" competition. In other words, " we can't have prices get too cheap because then the Value-Jets of the world won't be able to jump into the market place." Of course then you would be paying $400 to fly from New York to Boston just for the chance to have a thrill-a-minute ride across New England. But as long as a guy with a pair of Ray-Bans and a crop duster can "compete" with Delta and American, then the D. of T. is happy.
Flying High, What Are They Smoking?


Where is the common sense in the Clinton Administration's airline p...


... middle of paper ...


...the elimination of market restrictions.

The House has a companion bill, H.R. 2748, which does not go as far as the Senate bill in its regulatory language. But Speaker Newt Gingrich (R-GA) has predicted that Congress will pass some airline bill this term. A senior aide for a Republican on the House Transportation and Infrastructure Committee said, "I don't know if the two sides will come together this year."

So the legislative status of the re-regulatory fever is still in doubt. But with a Republican Congress which seems to advocate that position, an airline bill could still pass which takes the aviation industry in the wrong direction.

"Problems" in the airline industry have not risen due to too much competition within the industry. To the contrary, Washington regulators should turn the industry loose in any more ways that it can. Lowering restrictions to enter the market place, emphasizing private ownership of aviation matters, and encouraging open and free competition within the scope of anti-trust law should be the goals of the Clinton Administration. Instead of heading towards re-regulation, Washington should get out of the airline business for good.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay about Southwest Airlines And The Deregulation Of The Airline Industry

- Southwest Airlines got started as Air Southwest in 1967 by a couple businessmen looking for a better way to fly. The new airline grounded for its first three years due a lawsuit filed by some of the prominent air carriers during that time. After the lawsuit was over the airline was ready so they changed their name to Southwest Airlines and took to the air. Southwest Airlines was founded on several principles of business; “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline”....   [tags: Southwest Airlines, Airline, Low-cost carrier]

Strong Essays
1069 words (3.1 pages)

Essay on Airline Deregulation

- On October 24, 1978, President Carter signed into law the Airline Deregulation Act. The purpose of the law was to effectively get the federal government out of the airline business. By allowing the airlines to compete for their customers' travel dollars, was the thinking, that fares would drop and an increased number of routes would spring up. Expected Results The results of airline deregulation speak for themselves. Since the government got out of the airline business, not only has there been a drop in prices and an increase in routes, there has also been a remarkable increase in airline service and safety....   [tags: essays research papers]

Strong Essays
1036 words (3 pages)

Deregulation Of The Airline Industry Essay examples

- Deregulation of the Airline Industry The airline industry has been subject of intense price competition since it was deregulated, and the result has been a number of new carriers which specialize in regional service and no-frills operations. These carriers typically purchase older aircraft and often operate outside the industry-wide computerized reservations system. In exchange for these inconveniences, passengers receive low fares relative to the industry as a whole. This research examines two low fare air carriers, ValuJet and Southwest Airlines....   [tags: essays research papers]

Free Essays
1703 words (4.9 pages)

Deregulation of the U.S. Airline Industry Essay examples

- Deregulation of the U.S. airline industry has resulted in ticket prices dropping by a third, on an inflation-adjusted basis. As a result some 1.6 million people fly on 4,000 aircraft every day. Airlines carried 643 million passengers in 1998, a 25% increase over 1993 and the FAA estimates that the nation¡¦s airline system will have to accommodate 917 million passengers by the year 2008. The growth in air travel threatens to overwhelm the presently inadequate air traffic control system, which has not kept pace with available technology in navigation, communications, and flight surveillance....   [tags: essays research papers]

Strong Essays
1872 words (5.3 pages)

The Deregulation Of Domestic Air Service Essay

- According to the article there are critics that believe re-regulating the airline industry in the United States is an appropriate measure to take. This would turn back the clock by having the government more involved in the way that airlines operate. Through deregulation, airlines now use market conditions to determine where to fly, when to fly, and how much to charge. Deregulation lowered the barriers to entry and allowed for new airlines to be started and enter the marketplace. With the introduction of low cost carriers, improving competition, created an environment where legacy carrier’s needed to make changes to keep their customers....   [tags: Airline, Southwest Airlines, Low-cost carrier]

Strong Essays
1000 words (2.9 pages)

Essay about An Overview On The Commercial Airline Industry

- I. Introduction The commercial airline industry is both highly complex and remarkably interwoven into the everyday lives of consumers. Despite increasing demand for safe and affordable flights, the industry has suffered major losses in recent years, resulting in various strategies to increase economies of scale. Through mergers, vertical integration, global alliances, and cost-cutting techniques, the airline industry now operates in an oligopoly market, with a few major airlines dominating the U.S....   [tags: Airline, Aircraft, Southwest Airlines]

Strong Essays
711 words (2 pages)

The Airline Industry Can Not Be Sustainable Essay

- Introduction- 150 words The argument that would be put forward in this essay shall state the airline industry cannot be sustainable in essay. And also explain what sustainability consist of discuss various topics like health implications, Human Factor, Bio fuels, how the airlines measure sustainability and what customer incentivise the airlines and airports give to customers. The term sustainability stems from "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs....   [tags: Airline, Aircraft, Sustainable development]

Strong Essays
1444 words (4.1 pages)

Essay on The Airline Industry Of The United States

- The airline industry in the U.S. consists of about 100 passenger airlines (Global Airline Industry Program, n.d.). These airlines account for over 11 million flight departures per year and over one-third of total air traffic in the world (Global Airline Industry Program, n.d.). In 1979, Congress deregulated the airline industry. Prior to the deregulation, airlines competed on service as fares were set by the US government (Unnikrishnan, 2015). Deregulation allowed the low-cost carrier to complete with the large domestic carriers....   [tags: Southwest Airlines, Low-cost carrier, Airline]

Strong Essays
831 words (2.4 pages)

Essay about A Brief Note On Distance On Airline Industry

- 2.1.1 Cost Prognostic Distance on Airline According to Fritzsche (2012), many airlines facing big competition need to reduce cost as much as possible while providing excellent service without the cutout. eg with the increasing cost of fuel, airline industry is struggling to provide adequate service at reasonable prices. Any reduction in maintenance cost in the airline industry, therefore, enhances the competitiveness of an airline. Diagnostics and repair procedures have been used to ensure a higher level of equipment availability at reduced cost....   [tags: Southwest Airlines, Airline]

Strong Essays
1356 words (3.9 pages)

Essay on The Airline Industry : The Market Performance Of Qantas Airlines

- The airline Industry in Australia is struggling to make profits, and this is seen by the market performance of Qantas Airlines. In fact, for a number of years, Qantas Airlines is struggling to make profits, and it faces a decline in the share of its market. Certainly, the airline industry in Australia is struggling to be profitable as a whole. On average, the airline companies in Australia are making about 1-3% in terms of profit. Of course, it is not only ion Australia that the airline industry is on a decline....   [tags: Airline, Qantas, Southwest Airlines]

Strong Essays
1804 words (5.2 pages)