Deregulation of Aviation in the Commercial Airline Industry Research Paper

Deregulation of Aviation in the Commercial Airline Industry - Research Paper Example Later, airline safety regulation was passed together with 1958 Federal Aviation Act that bore Federal Aviation Administration. By 1938, US government was regulating much commercial aviation in terms of routes, schedules and fare. The three main functions of CAB are regulating airline route, limiting new market entrances by air carriers, and regulation of passenger carriers. CAB report shows typical regulatory thinking. Without certain circumstances that give sound reasons for new carriers, inherent desirability to increase the airline industry was not valid. The 1978 Airline Deregulation Act deregulated many of these controls and completely changed the civil aviation face in the United States. In order to serve any given route, an airline was required to seek permission which led to many barriers in the permission granting. Consequently, the system was removed by airline deregulation including the dismantling of the flag carrier notion. However, this caused a new problem because many civil suits were filed in state or federal court against an airline. While the court handled breaches of contract and personal injury claims the transportation department had neither the facilities nor authority to mediate or try many disputes between airline and consumers (Johnson, 2008). Therefore, many consumers have been left to search for themselves legal justice with their claims. This is enhanced by the Open Skies Agreements between United States and other nations which have opened the aviation market to foreigners and removed competition barriers. This allows airlines to operate their air services to any point of other countries from any point in United States. These agreements have successfully removed competition barriers as well as allowing... The researcher states that in 1978, the United States signed an airline deregulation Act, and later developed a new regulation form, to deal with allocation of scarce availability of slot numbers in the airports and other problems that may be as a result of this scarcity. With cost and price competition views, various solutions were proposed, in order to control the routes served and the prices charged by major airlines. Airline deregulation has yielded and continues to yield uncountable benefits to travelers who fall in the average category. The positive deregulation consequences were significant drop in fare prices, improvement of security, service and programs, among others. Reduction of fare helped passengers to increase their savings, where it is estimated that they saved up to $ 100 billions. It also allowed smaller airlines to proliferate into the big carriers market. Generally, the larger airlines suffered negative consequences of airlines deregulation like bankruptcy, collap se high operating losses more than the smaller airlines. However, millions of flying passengers and smaller airlines gained the better benefits of airlines deregulation. Though smaller markets were not affected by service erosion as predicted by deregulation opponents, larger airlines had nothing to small to smile at, as competition exposure made them suffer heavy losses through labor union’s conflicts. As a result, many of them were liquidated, especially those that were founded in the after deregulation.