International Service Of Air Transportation

Before the Deregulation Act of 1978, the airline industry was federally regulated in regards to

Over 35 years ago, Rollin King and Herb Kelleher decided to create a different type of airline. They began with the simple notion: If you get your passengers to their destinations when they want to get there, on time and at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. They were right (Southwest Airlines, 2004)!

Although there was a deregulation of the airline industry, the one significant component that did not change was the infrastructure of the airline industry. Constrained by the limitations of the airports and the air traffic control system, airlines did not see significant increases in profits despite the large growth and operations. As the airlines increased the number of flights and structure, the air traffic control system did not experience the same increase. Because the ATC system was still controlled and owned by the government, growth was, and continues to be slow.

The path was a system of buildings, navigational structures and airstrips that allowed for reliable and safe flights all hours of the day. The management of the transcontinental airway has two distinct periods, before and after the Kelly Act of 1925. The Kelly act was in response to the complaint that the federal government was subsiding an industry, creating unfair competition with traditional private mail transportation companies. Before 1925 the USPS maintained the Transcontinental Air Route and owned the planes delivering the mail. The Airways Division in the Bureau of Light Houses was given the task of maintaining the nation’s airways after passage of the Kelly Act. Therefore all of the major ground components of the Transcontinental Airway and the other airways in the country built after 1925 were constructed by the Airway

During the course of World War I, airplanes proved to be a useful tool for the military. With the introduction of airmail planes were now utilized for commercial purposes. The Air Mail Act of 1925 gave birth to the airlines and passenger

Furthermore, the creation and enforcement of standards for pilots and aircrafts was instrumental in ensuring the advancement of commercial aviation. The Air Commerce Act of 1926 ensured that the federal government was able to supervise and regulate the airlines as they evolved from airmail couriers in small, single-engined aircraft to massive, dual-engine aircraft capable of transporting cargo and hundreds of passengers across thousands of

On October 24, 1978, President Carter signed into law the Airline Deregulation Act. The purpose of the law was to effectively get the federal government out of the airline business. By allowing the airlines to compete for their customers' travel dollars, was the thinking, that fares would drop and an increased number of routes would spring up.

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

With the Air Mail Act of 1925 also known as the Kelly Act air mail carriage officially started getting contracted out to private companies. The following year the air commerce act created a bureau to enforce the licensing of aircraft, pilots, engines, and other personnel (Encyclopedia Britannica, Crouch, T., Bilstein, R., & Boyne, W. (2016). By 1927 all air mail was being flown by contract carriers. “Airline contractors would receive 80 percent of the revenue of the mail they carried” (US Aerial Mail Service 1918–1926. (n.d.). These airline contractors eventually began abusing the system for profit. This led to the airmail act of 1930 which gave the Post Master General, Walter Brown the ability to change the way payments were calculated. This also gave Brown the ability to create long term contracts with airlines. Brown later gave contracts to three larger airlines purposely excluding smaller airlines. Those airlines were United, TWA, and American

At the onset of the airline industry in the United States, major network airlines were the sole providers of air travel. This multifaceted industry was a difficult industry to break into as a consequence of “sophisticated customer segmentation, hub-and spoke models and costly information systems for reservations, fare wars and intense competition” (Thompson 2008). Shrinkage in airline ticket prices augmented the demand for airline travel. Many markets were simply deserted or over-looked by major network airlines; this is a region a fresh “second tier of service providers” could enter into. This endeavor proved to provide a consumer savings of billions per year. Thus in June of 1971, after a tumultuous battle with other Texas-based

Although the airline industry is in the business to transport people from one place to another they could not function without those who keep the airplanes operating on schedule. The airline industry has become the major provider of public transportation for Americans traveling between the nation's cities. Scheduled airlines now account for 92%

A drop in fares has been the best result of the Airline Deregulation Act of 1978. It has been the impetus for the increase in the number of flights, which in turn has spurred a drive for greater safety in airlines. But with the current airline market, this development has given us one negative. Since ticket prices have dropped to new lows, the realities of an industry which operates on such economies of scale dictates that only a few competitors have the capacity to operate within the market. This is not the desired effect of either political side on this issue, but it is an economic necessity with the environment that has been created, very similar to that of public utilities and phone companies.

3,4- The Airline industry and the market The airline industry is large, specially in the United States, mainly due to the “ Deregulation” of the industry. In 1938, the Civil Aeronautics Board was created to control the growth of the air transportation industry. This board had the authority to control entry, exit, prices and methods of competition. In the late 1970 this structure was found inefficient and in 1978 deregulation took place. Due to the deregulation of the industry competition intensified, prices dropped, and the number of people travelling increased. Many new companies emerged and regional airlines saw deregulation as an opportunity to expand. Due to the rise in competition, by 1986 mergers started to take place and in 1987 64.8% of the market was controlled by the four largest airlines. The demand for air travel is determined mainly by price, studies revealed that half of the leisure travellers and on quarter of business travellers did not have a preference for a particular airline, which means that prices determined the

Emirates Airline: Emirates is an air company established in Dubai, United Arab Emirates. The Emirates airline is a branch of The Emirates Group, which is completely held by the administration of Dubai's Investment Corporation of Dubai, His Highness Sheikh Ahmed bin Saeed Al-Maktoum is the Chairman and Main Policymaking of Emirates Airline & Group.

In examining the history of aviation in the U.S. and the development of the airlines, it is clear that the Federal Government played a vital role in the development of both. Historical records clearly show that this involvement by the Federal Government was critical in getting them established and in helping to develop them into the globally dominant enterprises they are today. Furthermore, it can be easily argued that U.S. aviation as a whole, and the airlines in particular, would not be where they are today without this direct involvement by the Federal Government and some of the very specific actions that it has taken to keep them relevant and competitive during the most dire of times. The Federal Government ensured that U.S. aviation and its airlines would develop and achieve a worldwide leadership role by becoming involved in three major ways: through funding, legislation, and policy setting.