The Airline Deregulation Act Of 1978

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Background

The notion of flight – of traversing the vast highway of the skies – was once a dreamlike idea that was invigorated into reality in 1903, when Orville Wright piloted the first powered aircraft a mere twenty feet above the sandy shores of North Carolina. The subsequent century expanded upon his success, innovating airplanes and developing a booming industry founded upon air travel. It is thus valid to assume that, globally, we as a civilization have changed how we live and experience the world as a result of the airline industry - we are able to settle, travel, and conduct business in places once deemed remote and inaccessible, and our world is undoubtedly more interconnected. Traveling by air has become a commonplace service, altering our perception of distance and diminishing travel time, and the industry is continuously making efforts to improve and advance. The Airline Deregulation Act of 1978 within the United States promulgated an era of unencumbered competition within the market, opening the floodgates for newer carriers – with a variety of lower pricing structures – to compete with formidable incumbents. Numerous carriers consequently filed for bankruptcy, and many of the industry leads consolidated their airlines to increase their power. Within the last twelve years alone, a series of bankruptcies and mergers have resulted in ten major U.S. airlines consolidating into four market-dominating mega-carriers: American, Delta, Southwest, and United. Why is
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