The Deregulated Airline Industry: Legal Challenges for the Nineties

The United States is one of the few nations where private airline ownership and more than one carrier are permitted, but traditionally the airline industry was heavily regulated by the Civil Aeronautics Board (CAB) with direct regulation of routes, rates, entry, and exit. However with the Airline Deregulation Act of 1978 and the International Air Transportation Competition Act of 1979, Congress removed many restrictions on the airline industry and allowed airlines to make their own economic decisions and operate as traditional commercial enterprises. Although deregulation has produced many benefits like improved efficiency, reduced costs, and a wider range of services, deregulation has also caused concerns about airline safety, industry concentration, monopoly leverage, and the stretching of finances causing debt and bankruptcy. This thesis analyzes the effects of deregulation in the airline industry since the late 1970’s and concludes that, while a return to CAB type regulations is not necessary, current airline policy should be strengthened