U.S. Airline Industry Regulation Essay Example | Topics and Well Written Essays - 500 words

U.S. Airline Industry Regulation - Essay Example Since the deregulation, the air transport carriers have decreased in number. A number of problems have plagued the industry and its workers. Whereas there are many favorable conditions that prevailed in the air line industry. The term airline deregulation has been in the news for decades. The airline deregulation was signed into law by President Jimmy Carter, he removed the power of the Civil Aeronautics Board to allocate routes and set fares. Before this law the fares were the same regardless of the airline flown. Due to the airline deregulation the airline fares have varied. But from a consumer’s point of view, the deregulation proved to be consumer friendly as fares are much less expensive than it were before. (Buckfelder) When talking about regulation, it has played a pervasive role. It subsidized increasing return and it had economy-wide positive spill over. Regulation provided an institutional structure that gave way to investment and uncertain technologies, which would otherwise exposed to inconsistencies and market breakdown. Regulation created high concentration industry, major trunk airlines with high market shares justifying high-fixed cost and new aircraft technologies. (Yosef, 2005, p No 133) Air travel has increased drastically and due to deregulation the airlines have improved their services, equipment and made it accessible to the general public. The rigid fares of the regulatory era have given way today’s competitive price market. It introduced competition in the industry and airline fares. It proved as a successful step for commercial airlines, the airlines could now set their own policies; determine the fares without any government intervention and expect high level of profits. Although the industry gained a lot from deregulation but few draw backs also flourished. The industry had unionized workforce that flourished on inefficiency and generous salaries, it proved to be a problem for a competitive