Braniff Airways: Factors Leading To The Deregulation Act Of 1980)

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Introduction Style. Class. Color. These words best describe one of the most successful airlines of the 20th century. Braniff International Airways began as a small commuter/airmail company and grew into the worlds most prestigious airlines in the 1950s and 1960s. Braniff was bold in its quest to revolutionize the airline industry, however, many factors contributed to the bankruptcy of Braniff Airways in 1982. How could such a large airline go from successful to bankrupt in just a few years? The largest of these factors were the Deregulation Act of 1978, the Energy Crisis of 1979, and poor business decisions following deregulation. These two external factors will be discussed following a brief history of the airline. History and Innovation Braniff Airlines started in 1928 as a route between Oklahoma City and Tulsa, Oklahoma, but this company was quickly purchased by the holding company Aviation Corporation. The Braniff brothers saw how quickly the airmail contacts were growing and they started another company to bid for airmail routes in the early 1930s. This airline was called Braniff Airways and was the true beginning to the airline that flourished in the mid to late 1900s. Braniff Airways also began with a route between…show more content…
This crisis was the result of the Iranian revolution (which in-turn began the Iran-Iraq war), which at the time was one of the world’s largest suppliers of fossil fuels. This caused mass hysteria in energy sector and oil prices spiked in the world economy. Since airlines are heavily dependent on oil market prices, the industry took a large hit. Braniff saw a 94% increase in fuel prices in 1979 alone (Nance, 1984). This exorbitant hike in costs hurt Braniff badly and is the prime reason for the tremendous financial loss the company had been experiencing. In addition, a natural recession was taking place during the late 1970’s which only hurt Braniff

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