U.S. Airline Deregulation: Impacts on Passenger Services

Author

Melvin R. Fourroux, Fontbonne College

Year of Award

1986

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

Deregulation, Air Travel, Airline, Computer, Fare Structures, Flight Hub

Abstract

This work examines the impact of the airline industry deregulation on passenger services. The study begins with a historical review of airline industry regulation. Industry regulation was initially accomplished to guarantee the industry's economic survivability. The abuse of this limited competitive environment led to initiation of the Airline Deregulation Act of 1978. The objectives were to eliminate the monopolistic markets of the major air carriers. to allow entry into the market of new carriers. to allow competition to dictate the airline fare structure, and to decrease governmental control over the actual management and economic viability of the airline industry.

Following this historical development of the regulatory environment. this work examines the major impacts of deregulation on the airline passenger. These impacts include the emergence of the airline computer reservation systems. fluctuating air fares. an increase in flight frequency for most passengers. the spotty flight safety record of the deregulated industry, and the decreased quality of in-flight passenger cabin services.

This analysis reveals the growing dependency on comprehensive computer reservation systems by both the air carriers and the flying passenger. Abuse of these computer systems by the hosting carriers is well documented and has resulted in government intervention environment. to insure a fair, competitive environment.

With deregulation the number of airlines has dramatically increased offering numerous options for flight schedules and air fares. The combination of disparate air fares and frequent flights has created a system where over 70 percent of all airline reservations are now made through computer systems.

While these are the major advantages of deregulation, flight safety and in-flight cabin service has deteriorated. Deregulation has created a negative economic situation for many carriers resulting in delays in new aircraft purchases and compromises in the safety of flight operations typified by the record number of aircraft fatalities in 1985. The decreased quality of in-flight cabin service is also directly attributable to the worsening economic condition of the air carriers.

Document Type

Restricted Thesis

Recommended Citation

Fourroux, Melvin R., "U.S. Airline Deregulation: Impacts on Passenger Services" (1986). All Theses, Dissertations, and Capstone Projects. 633.
https://griffinshare.fontbonne.edu/all-etds/633