Federal Aviation Act of 1978

MAJOR PROVISION OF FEDERAL AVIATION ACT OF 1978

Albert Harris III

Embry Riddle Aeronautical University

Abstract

This paper examine the provision of the Federal Aviation Act of 1978. The Act partially deregulated the airlines and gave somewhat control over air travel to the free market as oppose to the political platform it had operated from since 1958. Discussion of the benefits of deregulation and the problems that it created for the “legacy” airlines will also be explored. The antitrust laws that are in place, whether they are good for a so called free competitive market. Airport access and air traffic control are other discussion point to be examined in this paper. The financial health of the aviation industry as a whole since the “act of 1978”. As we observe the good and bad provisions of the “Federal Aviation Act of 1978” will we be ready for the future of commercial aviation in the United States and beyond our borders.

Deregulation as a whole has been positive for the aviation industry. Air travel for commercial aviation has increased and the price of airfare has fallen a considerable amount. Along with deregulation came the ability for airlines to plan better route strategies. New technology became available which allowed the airlines to improve capacity use, therefore making air travel affordable for the general public. Airfares, when adjusted for inflation , have fallen 25 percent since 1991, and, according to studies done by the Brookings Institution, are 22 percent lower than they would have been had regulation continued (Winston & Morrison, 2000). Since deregulation in 1978, airline prices have fallen 44.9 percent in real terms according to the Air Transport Association. Robert Crandall and Jerry Ellig (1997) estimated that when figures are adjusted for changes in quality and amenities passengers save $19.4 billion dollars per year from airline deregulation. The savings of the revenue is passed on to the consumer.

The savings of the...