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Essay / Research Paper Abstract
This 4-page paper argues for limited government regulation in the U.S. airline industry. Bibliography lists 4 sources.
Page Count:
4 pages (~225 words per page)
File: AS43_MTairlregu.doc
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Unformatted sample text from the term paper:
prepare a paper summarizing his feelings about whether limited government regulation is needed in the airline industry - or whether the government should stay out altogether. Its the contention of
this paper that throwing open the airline industry has considerably weakened its quality and service because of the nature of the industry, which involves very high fixed costs.
The idea behind any kind of deregulation is to throw the market open to all comers, and to provide an equal playing field for
all competition. Ralph Hood (2009), in his column, points out that, thanks to deregulation, just about anyone can fly on an airplane, whereas during the 1960s and early 1970s, only
the fortunate few could afford to do so. This latter justification, by the way, is nonsense - regulation didnt automatically mean airlines were charging exorbitant rates for airfares - plenty
of families flew during the late 1960s and 1970s and didnt have to take out second mortgages on their homes. The problem
is, the airline industry isnt just another kind of industry - its one that requires a large degree of upfront capital investment, adherence to high labor costs and reliance on
volatile commodities (such as fuel and other raw materials) for it to function. Given the high degree of fixed costs in this arena, not to mention price volatility, the airline
industry cant operate in a deregulated, "invisible-hand" kind of market as some free-market advocates would like. In 1978, the U.S. government deregulated
the airline industry, and by 1985, all U.S. airlines had their choice of which routes to fly and what fares to charge (Aydin and Morefield, 2010). This directly impacted the
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