Carter Administration in 1978

The appointment of John Robson as CAB ch cinch in 1975, however, proved to be a turningpoint in the move toward regulatory reform in the airline attention. While professing n any support for or opposition to deregulation, Robson was willing to experiment with the introduction of laissezfaire policies into the regulation of the sedulousness. to a begin place Robson's leadership, the CAB either permitted contest for the first time, or change magnitude competition on what had in the past been either monopoly or nearmonopoly routes. These relatively small changes were viewed as revolutionist in the context of the existing regulatory system (Biederman, 1982). In July 1976, the CAB voted permit regulated interstate air carriers to lower fares, so that they could better compete with unregulated (by the CAB) intrastate carriers. This execution was followed in February 1977 by a General Accounting place (GAO) report contending that regulation of the airline assiduity had cost American consumers approximately $2 billion per course of study from 1969 through 1974. The report recommended the introduction of greater price competition into the industry, and easier entry into the industry for new airline companies.

The Carter Administration entered superpower at about the same time that the GAO report was issued, and in brief made clear its intention to continue the experimental lift to airline regulation. Super Saver type fares were soon

Labich, K. "How to Cure Those Airline Delays," Fortune, 1 Octo ber 1984, 3438.

The stated fundamental object of airline deregulation in the US was a simple one: to permit the airline industry to operate, as far as possible, under free commercialize conditions. There is little doubt that this was a true objective for both the Carter Administration and the Reagan Administration. It was not, however, the only objective. The Carter 4Administration was to a greater extent conservative than the Reagan Administration in its approach to national budget deficits. It wanted an end to federal exposure to support industry, and it wanted to lower prices to consumers through increased competition.

The deregulation of the airline industry was just one view of a larger deregulation effort, which included long duration truck hauling, banking, telecommunications, and airlines. In the area of deregulation, the Reagan Administration merely go on what the Carter Administration has started.

Meyer, J. R., and Oster, C. V., Jr. (Eds.). Airline Deregulation: The Early Experience. Boston: chromatic House, 1981.

In October 1978, President Carter signed into law the Airline Deregulation Act. Deregulation in the American airline industry had arrived.

Farris, M. T. "Contested Markets and Airline Adaptability Under Deregulation." Transportation Journal, 29 (Fall 1989): 1224.

This rationale held that any real sledding in air service resulting from deregulation would be minimal; that the only loss of service would be over routes without sufficient traffic to justify scheduled air service. This rationale was further supported by an assumption that (1) generally lower fares would result from deregulation, which would (2) draw more passengers into the market, which would (3) result in stronger and better managed air carriers in each of the three tiers of the industry.

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