ipl-logo

Airline Deregulation Act Case Study

946 Words4 Pages

Before 1978, the Civil Aeronautics Board (CAB), which is a federal agency in the United States, regulated what routes airlines could fly, the fares that airlines could charge for the flights, the schedules that the routes were flown and which foreign destination the U.S. airlines could fly into (Aeronautics aviation news & media, 2017). The airlines that the government allowed to fly were basically a monopoly, driving up prices and not having any competition. The Airline Deregulation Act changed that though. The Act prohibited the U.S. government from being able to control the airline fares, routes or flight schedules.
Since the Airline Deregulation Act has been effective, airlines have overseen the number of routes they want to fly, how much they charge per flight, and …show more content…

The Act has allowed more competitive prices within the airline industry so that fares are more affordable. “In 1996, a report revealed that, on average, airline fares per passenger mile were 9% lower than they had been in 1979” (Aeronautics aviation news & media, 2017). Without the Airline Deregulation Act, there would not be any smaller airlines and Southwest would not be where it is at today. The prices of airlines would also be higher than they are due to little competition. There would only be a small number of major airlines within the U.S., with a smaller amount being able to fly internationally. The Airline Deregulation Act has significantly changed the airline industry for the better when it stopped allowing the government have control over it.
Southwest Accidents
In the last 18 years, there has been a total of two accidents involving an aircraft operated by Southwest

Show More
Related

Tim Brady's The American Aviation Experience: A History

582 Words | 3 Pages

According  Tim Brady’s book , The American Aviation Experience: A History,  before the depression hit, congressed passed the Air Commerce Act of 1926 . This is because president Hoover wanted the industry to “grow into genuine passenger-carrying entities...”. To prevent any monopolies, however, they later passed

Read More

How Does The Railway Labor Act Affect The Airline Industry

237 Words | 1 Pages

The Railway Labor Act therefore promotes effectiveness labor management relations in key airlines. It’s a delicate balance that protects both the customer and the airline company while still fully permitting collective bargaining activities. It’s interesting to note that Congress has not changed the RLA for over 28 years. Only one new provision has been added which addressed collective bargaining disputes at public commuter railroads. The Railway Labor Act is without a doubt vital to the airline industry and without the enactment, U.S Airways may have not become so successful in the industry.

Read More

The Privatization Of Air Canada

1126 Words | 5 Pages

Air Canada, one of the largest airlines in North America, has had substantial ownership and management changes since its founding in 1937. The airline, which initially began as a government-owned entity, had a monopoly on domestic air travel in Canada for many years before it was eventually privatized in the late 1980s. At the time, the transition towards deregulation was controversial and sparked intense debate across the nation about whether a significant change was necessary. However, there was also a need to take into account the growing demand for less governmental regulation, more industry competition, and shifting global trends that favoured unregulated aviation sectors. As a result, the decision to privatize Air Canada helped to overcome

Read More

Compare And Contrast Delta Airlines Oligopoly

866 Words | 4 Pages

The airline industry is one of the most important industries in modern society as it keeps the world connected. Two of the biggest firms in this market are Southwest Airlines and Delta Airlines. The industry is an example of an oligopoly as only a small number of firms sell their services in a market with high barriers to entry. These high barriers largely come from the capital required to purchase a jet, let alone hundreds of jets, and to operate them with pilots and a crew. In this market, both Southwest Airlines and Delta Airlines share significant market power, and the decisions one company makes impacts the other, they are highly interdependent.

Read More

Airline Deregulation Act Of 1978

139 Words | 1 Pages

In 1978, President Jimmy Carter signed the Airline Deregulation Act into law. This would be the first time in U.S. history that an industry was deregulated. The Airline Deregulation Act was influenced by the rising cost of airline tickets. United States investigators compared fares of regulated carriers flying between states with fares of unregulated carriers flying within states. They found that unregulated carriers charged lower fares.

Read More

Galbraith's Implications Of The Oligopolistic Competition

1029 Words | 5 Pages

We have a global oligopoly today. You've got Viacom, News Corp., Time Warner and Disney. And these are large companies in perfect position to take advantage. (Chris Dixon) Taking two unique carriers as a case, if either airlines choose cutting their profits, there is propensity that it will influence the other, and if both airlines settle on chopping down their fares, they will both be influenced and move to a most exceedingly terrible circumstance unless, there is expansion in admission deals to a sensible level.

Read More

Spirit Airlines Porter's 5 Forces

1519 Words | 7 Pages

When a smaller airline infringes on a major airline’s turf in a major market, attempting to undercut them on price, the FSC often retaliates by lowering price whilst maintaining their premium offerings and perks. This creates downward pressure on average fares in that region, which is good for the consumer and leads to an increase in overall travel volume on those routes (See Figure 4 below) . Spirit is no stranger to this part of the market, and recently found itself in a pricing war in the Dallas-Fort Worth market (American Airline’s largest hub). Spirit attempted to move in and undercut American Airlines, to which American responded by slashing their prices in what Spirit’s management called a “chainsaw approach.” Moreover, not only did American retaliate in Dallas-Fort Worth, they also cut prices in all routes where Spirit overlapped, particularly in Chicago O’Hare Airport, American's third-largest

Read More

Hawaiian Airlines Business Strategy

505 Words | 3 Pages

When the economic crisis started all over the world, most of the airlines were forced to join, sell or even suffer the loss of revenues. During this time, fewer

Read More

American Air Traffic Control System Pros And Cons

836 Words | 4 Pages

Disruption in the Skies Safety and efficiency tend to be the two biggest things on people's minds when traveling by air. The American Air Traffic Control system is one of the most successful at accomplishing these tasks in the world. However, there is a movement to potentially change that. The privatization of Air Traffic Control (ATC) would be very harmful to the aviation industry because it would raise commercial airline ticket prices, increase the likelihood of a disaster, and it would take up a large sum of the US budget to fix a system that is not broken. To begin, Privatizing America's ATC would cause commercial airline tickets to skyrocket in price.

Read More

Deregulation Of The USArline Industry In The 1970s

597 Words | 3 Pages

The regulations in the airline industries had proven to cause several domestic market problems such as monopolistic practices and inflating ticket prices. Although the airliners could still compete in the US due to the monopolies, on an international level the US airliners could only compete by offering more sumptuous meals, which would surely not be sufficient in the future. Although from a realist perspective market based actors such as firms should be subordinate to the state, the firms in the airline industry had grown very powerful despite the government regulations. Realists would have argued that the US government had been too weak and soft in the US airline industry.

Read More

Southwest Airlines Case Study Summary

747 Words | 3 Pages

Ramada’s problem was first discovered when their management found out about D. K Shifflet’s latest survey about customer satisfaction in the hospitality industry, which it then shows that mid-tier hotels continuing to go downward. Later on they continued on their research and decided to hire a third party to find out more about the survey and also to observe their own company’s system. It results in a management dilemma, Ramada needs to prevent themselves from falling. Then it raises some questions on how can their management improve their performance to achieve the level of customer satisfaction they desire. They then found out three main concerns that they need to put more effort to.

Read More

Political And Environmental Factors That Affect The Airline Industry

885 Words | 4 Pages

9. Environments Like any other Industry, the airline industry is also affected by changes in its external environment. King III (2009) highlights that leaders are not supposed to compromise the natural environment and the livelihood of future generations. Environmental Factors can also have a significant role to play in an airline industry; like in the case of Prof. McPherson we observe the bad weather reducing his time by 1 hour and thirty minutes. In light of the environmental factors that affect the airline industry this Study will focus on the traditional Political, Economic, Social, Technological, Environmental, and Legal Analysis, often referred to as the PESTEL Analysis.

Read More

Why I Hate Capitalism

197 Words | 1 Pages

It's called capitalism.” In a free market, none of this bolshevik would ever happen. However what I am wondering is even though airports only serve two carriers, wouldn’t one carrier see a rise in stock/gross/sales if they dropped their prices? Even if the service sucks, I’ll bet a thousand dollars that people would pay (for a trip from LAX to Boston) $150 for a nonexistent service airplane ride as opposed to $500 for standard service (which is what I paid, or my parents did at least). Also the internet provider rigging is bolshevik as well.

Read More

Porter's Five Forces In The Airline Industry Summary

1984 Words | 8 Pages

Threat of New Entrants. In the airline industry, the arrival of a new airline can be disruptive, particularly since new carriers tend to focus on high-value route corridors and bill themselves as bargain carriers. On the other hand, the cost of entry into the market is fairly high, and that fact together with the industry’s reputation for lim-ited profitability makes such disruptions rather rare.

Read More

Transnational Strategy Of Lufthansa

1545 Words | 7 Pages

It also has given Lufthansa the opportunity to reduce cost of resources, thus leading to higher market profits. It has also greatly reduced the barriers of market entry including

Read More

More about Airline Deregulation Act Case Study

Related Topics

Open Document