Historical significance of the US Airline Deregulation and the "Open Skies Treaty-future international deregulation of the Commercial Airlines Transport

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In 1978, the US Congress deregulated the airline industry. The underlying principle of airline deregulation was that struggle among airlines would substitute government regulation in deciding fare and service assistance.


The initial years of airline deregulation were distinguished by era of strong rivalry among the main airlines in addition to by competition from new-entrant airlines and from airlines previously restricted to intrastate markets.

In the years between the inception of airline deregulation in 1978 and the upsurge of mergers starting in 1985, most of deregulation's advantages to customers came in the form of enhanced service and reduced fares as a result of contest from new participants and from the major network airlines themselves.

The capacity to supply new and emergent markets, to shape broader route networks, and to charge low fares had been firmly controlled by regulation. These restructured services could be put into practice in no small degree as a result of advances in technology that facilitated the growth of advanced yield management systems. Such systems help airlines to present and to rapidly change the combination of high and low-fare seat capacity on a particular flight, in addition to manage both origin and destination and emanate traffic over the whole complex.

As the restrictions on airline operations were raised by deregulation and the airlines promptly employed their new route and fare choice, customers in many markets acquired considerable gains. After the late-1980s mergers, nonetheless, the source of deregulation's gains started to change. ...
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