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Essay / Research Paper Abstract
This is a 6 page paper that provides an overview of airline deregulation. The economic impacts of deregulation are examined in depth. Bibliography lists 2 sources.
Page Count:
6 pages (~225 words per page)
File: KW60_KFeco003.doc
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Unformatted sample text from the term paper:
information about the industrys competitors and financial performance for any given modern year of operation, and because the industry has gone through periods of extremely stringent federal regulation, as well
as periods of remarkably lax deregulation. This allows for a meaningful comparison of the two market paradigms that is not possible when observing other models. Most often, this example is
brought up by proponents of the free market as an example of the successes of market deregulation; however, to make such a claim requires an empirical overview of the actual
changes experienced by the industry at the economic level from one paradigm to the next. This paper will explore such information in an attempt to highlight the true effects of
airline deregulation. Airline regulation first became a major cultural force during the 1930s. In the year 1938, the Civil Aeronautics Act was passed, which led directly to the establishment of
a federal body known as the Civil Aeronautics Board. This board was granted immense powers of regulation over the airline industry which effectively determined the shape, size, and flexibility of
the airline market for the next several decades. In particular, there are three key regulatory activities that were performed by the Civil Aeronautics Board to keep the airline industry in
stasis. Firstly, they were able to control which airlines could fly which routes, both domestically and internationally. Secondly, they were able to limit the total number of carriers in the
market at a given time in order to manufacture what was deemed a productive level of competition. Lastly, they were given the authority to regulate fares for the purposes of
consumer protection. Consequently, for many years, the airline industry existed in a period of stagnation, with only four key carriers providing the entirety of domestic air travel services: Transcontinental and
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