Airline Deregulation Act

Airline Deregulation Act

Long title	An Act to amend the Federal Aviation Act of 1958, to encourage, develop, and attain an air transportation system which relies on competitive market forces to determine the quality, variety, and price of air services, and for other purposes.
Enacted by	the 95th United States Congress
Citations
Public law	Pub.L. 95–504
Statutes at Large	92 Stat. 1705
Codification
Titles amended	49 (Transportation)
U.S.C. sections created	1371 et seq.
Legislative history
Introduced in the Senate as "Air Transportation Regulatory Reform Act" (S. 2493) by Howard Cannon (D-NV) on February 6, 1978 Committee consideration by Senate Commerce, House Public Works Passed the Senate on April 19, 1978 (83–9) Passed the House on September 21, 1978 (363-8 as H.R. 12611) Reported by the joint conference committee on October 12, 1978; agreed to by the House on October 14, 1978 (356–6) and by the Senate on October 14, 1978 (82–4) Signed into law by President Jimmy Carter on October 24, 1978

The Airline Deregulation Act is a 1978 United States federal law that deregulated the airline industry in the United States, removing U.S. Federal Government control over such things as fares, routes and market entry of new airlines, introducing a free market in the commercial airline industry and leading to a great increase in the number of flights, a decrease in fares, and an increase in the number of passengers and miles flown. The Civil Aeronautics Board's powers of regulation were phased out, but the Act did not diminish the regulatory powers of the Federal Aviation Administration (FAA) over all aspects of aviation safety.

Since 1938, the federal Civil Aeronautics Board (CAB) had regulated all domestic interstate air transport routes as a public utility, setting fares, routes, and schedules. Airlines that flew only intrastate routes, however, were not regulated by the CAB. Those airlines were regulated by the governments of the states in which they operated. The CAB promoted air travel, for instance by generally attempting to hold fares down in the short-haul market, to be subsidized by higher fares in the long-haul market. The CAB also was obliged to ensure that the airlines had a reasonable rate of return.

The CAB earned a reputation for bureaucratic complacency; airlines were subject to lengthy delays when applying for new routes or fare changes, which were not often approved. For example, World Airways applied to begin a low-fare New York City to Los Angeles route in 1967; the CAB studied the request for over six years only to dismiss it because the record was "stale." Continental Airlines began service between Denver and San Diego after eight years only because a United States Court of Appeals ordered the CAB to approve the application.

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