U.S. Airline Industry Regulation
Aviation industry has been traditionally marked by continuous change. As other industries, the airline industry required stages of development, with every stage it has its own pros and cons, the stages of development I will discuss are the regulation, deregulation, and re-regulation stages in the aviation industry.
The airlines industry during the regulation era, Civil Aeronautics Board was created and had the power to price tickets and the the routes airlines flew, with the goal of serving the public interest. The main factor driving to those pros were the limited markets served, limited ...view middle of the document...
The medium and small size airports are not receiving as much care and funds as the more concentrated dense traffic major airports. Destructive and predatory price competition, resulting in earnings deterioration and, ultimately, increased industry concentration.(Wensveen). The deregulation act had more pros than cons with its liberalization of preexisting regime, the law included more provision of services including domestic fill-up rights on international routes which allowed airlines to carry passengers between cities on their way to international destinations. The removal of restrictions of carrying traffic between cities otherwise prohibited was lifted, with the airlines integrating the “hub and spoke” system it made it more efficient to fly between cities.
The airlines have been struggling to sustain profit, and the customer satisfaction of airlines is declining. We need a regulatory authority to provide reasonably, balanced priced services to medium and small areas that do not happen to be hubs. Another advantage of...