EC 011 Airlines

EC 011 Airlines - The deregulation of airlines in 1978 was...

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The deregulation of airlines in 1978 was intended to lower airfares, give consumers choice, and enhance efficiency by removing government influence. It was to replace the Civil Aeronautics Board which was in charge of the regulation of air travel up until that point but proved inefficient as the industry became concentrated among a few major airlines. Deregulation relied on competition to provide balance within the industry and to promote efficiency innovation and lower prices for consumers. Its initial impact proved efficient cutting fairs by 20-40% and increasing air travel at a historically higher pace. Over time it resulted in a series of mergers that divided the country into sections of regional monopolies. The nature of demand within the structure of the industry has a relatively high price elasticity of demand. This is due to no substitutes for air travel when talking about traveling distances exceeding 300 miles with urgency and speed whereas consumers who are more leisurely have alternative modes of transportation to consider. The purpose of
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EC 011 Airlines - The deregulation of airlines in 1978 was...

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