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A Brief Review of Airline Regulation

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Economics of the U.S. Commercial Airline Industry: Productivity, Technology and Deregulation

Part of the book series: Transportation Research, Economics and Policy ((TRES))

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Abstract

Regulation1 of the airline industry began in the 1920’s when the U.S government began to award contracts to the airlines for the carriage of mail. Airmail was the major source of revenues in the early days of the airline industry. The U.S. Post Office and the Interstate Commerce Commission played decisive roles in the evolution of the airline industry structure. However, the failure of existing regulatory schemes, coupled with increasing passenger demand for air transportation led congress to establish the Civil Aeronautics Board (CAB) in 1938. The CAB was granted extensive regulatory authority over airlines providing interstate airline service, along with the authority to award routes, regulate fares and assure safe airline operations.2

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Endnotes

  1. A complete analysis of the Deregulation Act of 1978 and its early impact on the airline industry can be found in Meyer, J. and Oster, C. (1981) Airline Deregulation and Baily, E., Graham, D., and Kaplan, D. (1985), Deregulating the Airlines, MIT Press, Cambridge, MA.

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  2. Kaplan, D. (1986) “The Changing Airline Industry” in Regulatory Reform, Weiss, L. and Klass, M (eds.), The Little Brown and Company, Boston, MA, pp. 40–41.

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  3. Brenner, M., Leet, J. and Scott, E. (1985) Airline Deregulation, Eno Foundation, Westport, CT., pp. 3-5.

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  4. ibid.

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  5. See Kaplan (1986), pp. 42-43 and Baily, Graham and Kaplan (1985), pp. 11-26.

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  6. This assumes that the CAB knew the actual costs of the route structures.

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  7. Brenner, Leet and Schott (1985). pp. 3-10.

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  8. See Kaplan (1986), pp. 42-44 and Bailey, Graham and Kaplan (1985), Chapter 1.

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  9. A current, complete and detailed list of Form 41 accounts and their definitions required for filing by all U.S airlines can be found in Code of Federal Regulations, Aeronautics and Space, Number 14, Part 241, Office of the Federal Register, National Archives and Records Administration, Washington, D.C. It is updated annually and is available in most libraries. The actual data that each carrier files with the DOT can be found in 2 publications: Air Carrier Traffic Statistics Monthly and Air Traffic and Air Carrier Financial Statistics Quarterly. These two reports are available in most large depository libraries with Federal documents and may be purchased through the U.S. Department of Transportation, Office of Research and Special Programs Administration. Alternatively, Data Base Products of Dallas, Texas sells the Form 41 data in an easily retrievable format on a CDROM Disc.

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  10. Brenner, Leet and Schott (1985), pp. 3-10.

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  11. ibid.

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  12. See Brenner, Leet and Schott (1985), pp. 3-10 and Bailey, Graham and Kaplan (1985), pp. 27-37.

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  13. ibid.

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  14. Brenner, Leet and Schott (1985), pp. 8-9.

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  15. ibid., p. 10.

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  16. ibid., pp. 8-16.

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  17. ibid., p. 17.

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  18. ibid., p. 22. The Pan-American brand name however is being used in a small startup company at the time of this writing.

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  19. Congress of the United States (July 1988) Policies for the Deregulated Airline Industry, Congressional Budget Office, Washington, D.C., pp. 8–10.

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  20. ibid., p. 11.

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  27. ibid.

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  40. Levine(1987).

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  50. U.S. General Accounting Office (July 1993) Airline Competition: Higher Fares and Less Competition Continue at Concentrated Airports, GAO/RCED-93-171, Washington, D.C., pp. 1-44.

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  51. ibid., U.S. General Accounting Office (July 1990).

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  57. ibid., pp. 32-43.

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  58. ibid., pp. 44-54.

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  59. ibid., pp. 55-60.

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  60. Pickrell (1991).

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Authors and Affiliations

  1. Center for Science and Technology Policy, Rensselaer Polytechnic Institute, Troy, New York, USA

    Ivan L. Pitt

  2. Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, New York, USA

    John R. Norsworthy

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  1. Ivan L. Pitt
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  2. John R. Norsworthy
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© 1999 Springer Science+Business Media New York

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Pitt, I.L., Norsworthy, J.R. (1999). A Brief Review of Airline Regulation. In: Economics of the U.S. Commercial Airline Industry: Productivity, Technology and Deregulation. Transportation Research, Economics and Policy. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5031-0_4

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  • DOI: https://doi.org/10.1007/978-1-4615-5031-0_4

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-1-4613-7286-8

  • Online ISBN: 978-1-4615-5031-0

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