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Airline Deregulation Act of 1978, Essay Example

Pages: 1

Words: 290

Essay

The Airline Deregulation Act of 1978 was established as a means of enabling individual airline carriers to have sufficient control over setting fares and determining routes, rather than enabling the government to maintain control over these areas. Up until this act was established, a federal agency known as the Civil Aeronautics Board (CAB) was responsible for regulating fares, routes, and subsequent employment needs within the airline industry, but when this Act was created, the organization no longer had the control over the industry that it once held. Rather, each airline carrier could make its own decisions regarding how to establish fares, along with determining how many employees were required to staff these organizations. Nonetheless, the safety of the airline industry continued to be controlled by the Federal Aviation Administration. With this Act, the industry sought to be as independent as possible in making decisions from one organization to another, and to control their own fates. With this deregulation pattern in place, airlines were left vulnerable and exposed to their own weaknesses, and therefore, many of these organizations could not remain afloat from a financial standpoint, and either declared bankruptcy or merged with other airlines. This has emerged as a common pattern in today’s airline industry, and each organization struggles in one way or another to remain competitive but also financially stable. Therefore, the ADA of 1978 served as a promising steppingstone towards airline independence, but at the same time, it reflects new challenges and vulnerabilities for the airline industry that continue to leave scars on the business as a whole, as well as its employees. With customer satisfaction rates low and fares high, airlines must determine how to best approach these conditions to remain solid competitors under difficult economic times.

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