The United States Aviation Deregulation Act of 1978 is well-known in the field of civil aviation, which has profoundly affected the US civil aviation industry and even the global civil aviation industry. For more than 40 years, from 1978 to the present, the Act has been making a significant impact.
The bill grants greater autonomy
Prior to 1978, the U.S. government, through the Civil Aviation Administration (CAB), strictly regulated many areas of commercial aviation, including fares, routes and schedules, and even the right to operate routes between states in the United States. The Civil Aviation Authority has three main functions: providing routes to airlines, restricting airlines' access to new markets, and managing passenger fares.
In October 1978, U.S. President Jimmy Carter signed the Airline Deregulation Act. The bill removes federal control over many key aspects of the aviation industry. It can be said that this law has changed the fundamental face of the US civil aviation industry. After the enactment of the bill, the US civil aviation market underwent a major transformation, and its impact can still be felt today.
After the deregulation of the government, unfettered and free competition ushered in a new era of air passenger transport.
Crucially, it has become easier for startups to enter the industry. The Act encourages the development of new operators and the entry of existing operators into new markets.
The authorities want to reduce concentration, because monopolies can cause airlines to raise prices and reduce the service they are supposed to provide. Arguably, in essence, the bill is intended to increase competition in the civil aviation transport industry.
The market has been further developed
Before the late 70s, the top 10 U.S. airlines controlled 90% of the market. In addition, it mainly includes 7 smaller regional airlines.
In the decades leading up to 1978, air travel was a luxury affordable only for a privileged few in the United States. Although the introduction of jet aircraft has helped reduce the cost of airfares, there are many people who have not been on a plane, and there is a lot of room in the air transport market, and it is necessary to attract more people to fly.
The relaxation law created a truly free market for the commercial aviation industry and spawned a wave of low-cost carriers in the United States.
More people now have the opportunity to fly cheaper and there is a range of airlines to choose from. In 1965, less than 20 percent of Americans had flown in an airplane. By the turn of the century, half of Americans were buying at least one round-trip flight a year. In addition, the number of people flying in the United States tripled in 2011 compared to the 70s of the 20th century.
The arrival of a new era
Different airlines are participating in the air transport market and their market share is increasing, which means that the share of the previous giants is declining. The mid-20th century is often seen as the "golden age" of passenger aviation, when airlines served delicious food, luxurious cabins, cabin attendants were extra attentive and aircraft interiors were spacious. It can be said that flying is a pleasure.
However, the relaxation of the law has eliminated such practices by airlines. Many of the former rulers of air transport struggled for the next year or two, eventually leading to their demise. The "players" in the US air transport market are quickly shuffled, the market competition is cruel, and once the competition is not enough, it will face "death".
Major airlines such as Branniff International Airways, Capitol Airlines and the original Frontier Airlines all went bankrupt in the 80s of the 20th century. Airlines such as China Eastern Airlines and Pan Am barely survived until the early 90s of the 20th century.
Meanwhile, new entrants such as Southwest were able to benefit from the transformation. The Dallas-based low-cost airline began operations in 1971 and successfully expanded its new route network under the new law.
A comprehensive transformation
It's not just new entrants who benefit. After the relaxation of the law, some airlines have more expansion capacity because the Civil Aviation Authority no longer suppresses them. For example, before the relaxation, Continental had to wait eight years to get permission to operate routes from San Diego to Denver. Now that the new bill is coming, there are no such restrictions.
Before the relaxation, American Airlines could only fly to 39 destinations. With the new law, the Texas-based airline expanded rapidly and effectively over the next few years.
History always repeats itself
Despite a range of benefits from the relaxation bill, the industry now appears to be back to square one. The relaxation bill was originally intended to break the market share of certain airlines and break up monopolies. In fact, for a while, it did serve that purpose. But now, there are fewer competitive "players" in the US market, and airlines are "huddling" to cope with the crisis, and a large number of mergers and acquisitions have formed one giant airline after another. The top four U.S. airlines alone control 80% of the market.
These airlines can join forces to create policies that may sacrifice customers. For example, baggage fees and refund fees have been increasing over the years, and refund policies are strict.
In any case, the benefits of easing the bill are still present in some respects. JetBlue, for example, has risen rapidly since its emergence in the 21st century to become a force to be reckoned with. If it weren't for the bill, the low-cost carrier might not have been able to expand its network at all.
brief summary
All in all, since the relaxation of the bill, it has become easier for people to want to fly. However, the high-quality service of air travel seems to be "gone forever". After all, competition from airlines has intensified, airfares have naturally decreased, and airlines can only think about how to save costs.
In addition, Europe also mentioned the introduction of a concept similar to the US Relaxation Act in the Single Europe Act of 1986. This has also led to fierce competition across the continent. This initiative has helped Europe's low-cost airlines continue to grow.