Deregulation of Air Transportation Under the Aviation Act of 1975

The objective of this article is to analyze where we are after more than a year of intensive analysis and debate, with particular focus on the issues raised by the Aviation Act of 1975. What are the main contentions of the supporters and opponents of deregulation? What is the main evidence supporting these contentions? Are there areas in which further study appears desirable?

I will consider three main areas: the effect of deregulation on the price of services, the effect on the quality of services, and the effect on industry stability. Several disclaimers are needed. My analysis will of necessity be broad-brush, since I am seeking to cover in a few pages a subject which a CAB task force recently discussed intelligently for over 400 pages. Additionally, the questions posed in this paper should not be construed as indicating final positions on any issues.

My hope is that the questions will provoke further thought and analysis, and a sharpening of the issues.