Please note! This essay has been submitted by a student.
For nearly seven decades during the 20th century, air transportation managed to soar to new heights due to regulated policies. First, the industry was primarily developed with direct aid from the United States government which proved to have unwavering control over services. This authority quickly led to the United States Postal Service scheduling frequent flights around the nation through the gap of the first and second world wars, respectively. This service did not come without its fair share of consequences, however. To name a few, the new inventions involving the airplane technological aspects found in overseas dogfights in Europe lead to the formation of the National Advisory Committee for Aeronautics. This task force was motivated to promote aeronautical research in order to produce new feats involving speed records, ultimately becoming NASA.
Synthesizing this initial government endeavor, we can notice NACA was vital for pushing advancements onto previous projects, the federal overseers did not focus as much on commercial aspects yet. Going on, the USPS soon began to offer domestic packaging services from Los Angeles all the way to Philadelphia. With them at the forefront, they become a monopoly with help from the unwilling US Army. Ongoing legal battles quickly led to the Air Mail Act of 1925 which led to many operators, which was overlooked by the wary government. This is true according to publishers at the Travel Insider Info in which they state that they “vaguely understood and appreciated that there were strategic and business benefits in commercial aviation”. Molding this thought together, it is easy to notice how one-sided the government was at the time, as they seemed to not be able to multitask.
This misguided principle was pushed aside as Juan Trippe built an international mail system which then dispersed into Pan Am – pushing major manufacturers. As commercial aviation skyrocketed, new challenges were brought to the forefront as time progressed. In closing of early aviation standards, the realization that strict government regulation would prove to be of risky purposes as fostering was not necessary. Transitioning onwards to more modern times, the United States further stood their ground when came to monitoring the industry in hopes of becoming a global power. This notion was brought up in part of previous safety issues involving curious pilots who lacked enough knowledge of instruments. This sole instance, lead to unreliable travel times which were caused due to crashes and other incidents -in hand requiring a new sense of the necessity for a backbone in coordinated infrastructure. A heavy support system would allow for rapid growth which would leave other transportation modes in the dust. Moving on, when the first regulations of 1926 were set, the main goals were to “establish air navigation facilities, create national branches meant to investigate accidents and to also issue licenses through examinations” according to Embry Riddle’s files.
In connection, people may recognize how the Air Commerce Act attempted to improve lost standards of the past, but it did not do merely enough in regulating route management. This pattern was soon to change, though. When the 1930’s hit, incentives meant to veer jets away from solely catering to cargo arrived; since rates jumped on mail. Eventually, this push left the mailers to selectively use legacy carriers on routes through a merged system with four main heads. As growth occurred in the continental US, at its peak the great depression leaving mailers corrupted and soon after eradicated. Based on early statistics we notice how the Army took over, however, because of the difference in work environments only 2/3rds of flights were completed due to their busy schedules. Subsequently, this ill thought out blunder led to severe reformations that led to restrictions on total contracts.
All in all, there are many lessons to learn from issues with the post ranging from distrust which was brought along with the complete shift in duties from the airlines to the army. We can infer that this meant that the feds lost its footing when it came to realizing how profitable commercial travel could also become. Going onwards, several changes soon occurred as is the case with the FAA and the NTSB being formed which allowing for better strategies in the daily runnings of air transportation. In contrast, there are numerous reasons why airline regulation was removed during the late 1970’s. These circumstances range all the way from broken core systems to ignoring future opportunities which can be drawn upon over a series of seven unique reasons.
The first of this list is rather simple in that the government’s regulations were going at a slow rhythm. This claim is noticed in contexts of how far aviation evolved since the start of the 1930’s – in which considerably slower planes than the new 747’s of the mid 70’s were manufactured. With all of the old technological advancements in both airplane models and also flying boats practically forgotten by current populations. this meant that standards were shifting and the government was incapable of maintaining the pace.
Secondly, there were issues encircling load factors being inadequate, with little of discounts being allowed. This strict rule was enforced by the Civil Aeronautics Board (CAB) and only set a couple of charges per flights. This idea is backed up by the scholar, Edward Kennedy, of the Southern Methodist University. In his pamphlet dealing with the CAB he states that “they only allowed full fares and/or two categories of discounted fares (including student fares)”. Consequently, this led to fares being rather unaffordable which lowered profits. Going on from the above points on load factors and price charging, there also numerous reasons dealing with route management and start-ups. These range from the inability to add new routes as well as not having the right to remove old ones, along with unprofitability, bad startups and also the closures.
Going in order, mentioning that both the CAAB and rivals could veto new routes, which ultimately lead many to have fought in court to get requests passed with some going on for years. With airlines giving up on additions, removing routes also proved as cumbersome. This statement is detailed by how the CAB had to approve all discontinuations and how all affected cities refused, singlehandedly telling the airliners off with CAB’s aid. Basically, we can picture this as a game of devil’s advocate where organizations ruled and airliners stood no chance. With this analogy, airlines were not profitable either. This claim has valid reasoning since Corporate Find Law’s’ site exclaims that “the CAB considered a very generous 12% return on capital” yet airlines continued to plummet with broken promises. The falsity behind CABs statement led to the downfall of six major airlines soon after. Even with the industry spiraling out of control, new airlines were not permitted. Sixth of all, airlines on both on the domestic and regional level were not allowed to fly inter-state flights – even though they held themselves to impeccable standards.
Lastly, this pattern continued for years in a cyclical like fashion due to all the above. After numerous amendments made by Congress through several different presidential terms, airlines finally got what they deserved in deregulation between 1979 and 1984.
This time period is when the effects of airline deregulation become to most noticeable to the public eye. For instance, the disbandment of the Board directly led to a free market environment which airlines had the freedom to construct their own route systems without constant authority watching over their shoulder. Although in some retrospects, some airlines now started to act somewhat clueless as they were thrown off track by all the changes. This sentiment is shared by the editor, Gautam Gowrisankan, at the Federal Reserve Bank of San Francisco when he exclaims that “rapid growth occurred since routes had of great value previously but not they were slow to realize the concept of owning their own”.
Looking at the true meaning behind this quote, we now can understand how little of seriousness it was for the CAB to be sticklers on routes in the first place. As a coincidence of this, some carriers would sometimes drop like flies suddenly after opening – which is a common trait of most unregulated markets. While these two acts were taking materializing, the Essential Air Service was created to maintain old routes that were required to keep communities connected. Being linked to the outside world entitled the industry to see huge growth rates with conjunction to both Hub and Spoke and Point to Point travel.
Immediately following significant route management shifts in the industry, there were many other major benefits/drawbacks of deregulation to be found. For instance, half of a dozen positives are noticed in our notes on this theme. These bullets range from prices on most flights dropping considerably leading to savings, and also increased usage of the airlines for travel. These two unique pros allowed thousands of jobs to enter the economy, along with safer track records and new airlines being developed on behalf of buyers. Going further into these positives, we can learn that airfares have dipped more than three times its respective amounts since acts of deregulation were first enacted.