The global aviation industry has undergone significant development and expansion from the perspective of airlines and airports. An increase in the number of passengers using air transport coupled with air traffic congestion has prompted the expansion of airports and airport systems. In the U.S., one of the key players in the sector is the Federal Aviation Administration that determines whether various guidelines have been followed before expansion. The FAA often requires an environmental impact assessment (EIS) in its evaluation of the feasible alternatives to capacity expansion. The expansion, development, and operation of airports and airport systems is also influenced by various legislations. This paper examines an article “The Impact of Deregulation on Airports: An International Perspective” that gives insight into one of the acts of legislation that have influenced the development and operation of airports both in the U.S. and globally since the early days of aviation.
Author’s Thesis
One of the legislations that have changed the face of the American and the global aviation industry is the Airline Deregulation Act of 1978 (92 Stat. 1705). Since the passage of the act, it has significantly affected how airports in the U.S. are managed and operated. Given the good U.S. deregulation experience, it is anticipated that the rest of the world could follow in the footsteps of the U.S. According to NewMyer (1990), deregulation came as an amendment of the historic Federal Aviation Act of 1958 in the area of economic regulation of airlines by the federal government. For several years, the federal government through the Civil Aeronautics Board (CAB) played a huge role in the economic regulation of the airline industry. In essence, government’s intervention was to ensure that the aviation industry is protected from itself. The CAB’s actions in this regard included controlling prices, controlling routes, and limiting the formation of new and large airline companies. Towards the 1970s, most of the restrictions put in place by the CAB were deemed inappropriate by politician, consumer advocates, and industry observers. This prompted President Jimmy Carter to sign into law the Airline Deregulation Act that came into effect on October 24, 1978. Some of the provisions of the act included the ultimate elimination of the CAB, the decontrolling of the air fares and routes of domestic airlines, a 180-day limit on the CAB’s response to almost any issue inclusive of requests for the economic certification of new airline, as well as an essential air service program aimed at providing federally subsidized air service to rural settings. The act also provided for Labor Protection Provisions aimed at providing job protection for employees that would be displaced by deregulations as well as changes in the final approval process in the merger of airlines. The author’s thesis is that the passage of the Airline Deregulation Act of 1978 (92 Stat. 1705) has been of great benefit to the U.S. and the global aviation industry.
Facts in The Article That Support the Author’s Thesis
NewMyer (1990) argues that the passage of the act has since triggered numerous analyses of the impacts or results of deregulation. One of the major results of the act’s passage is that it has changed or affected how airports in the U.S. are operated and managed. The decision of the U.S. to deregulate the aviation industry could be emulated by other nations in the coming years. Already, there are aspects of globalization, privatization, and deregulation of the world’s airline systems. A continuation of this could significantly impact the management and operation of airports in the international context as well.
In support of the author’s thesis, the article mentions the fact that the passage of the act has resulted in the dramatic growth of the airline industry since 1978. This can be witnessed in the total enplaned or departing passengers in U.S. domestic airlines from 1978 to 1988 and beyond. According to the article, total enplanements in the U.S. domestic aviation industry was 274,179,000 in 1978. Following the passage of the act, enplanements rose to 316, 863,000 in 1979 translating to a15.3 percent increase. In 1983, total enplanements stood at 317,905,000 and increased to 344,683,000 in 1984 translating to an 8.4 percent increase. In 1985, total enplanements were 382,022,000 translating to a 10.8 percent increase. Moreover, according to the FAA, between 1978 and 1988, there has been an increase in large air carriers from 30 in 1978 to 105 in 1985 (NewMyer, 1990). In terms of consolidation in the same period, there have been 11 mergers and 16 buy-outs of smaller commuters. Positive impacts of deregulation have also been witnessed in U.S. airports with this occurring during the expansion phase as well as the consolidation and concentration phases. At the expansion phase, there was a significant increase in the number of new airlines entering the domestic U.S. markets. Following the passage of the act, the new entrant airlines included the Midway Airlines, New York Air, People Express, Muse Air, Jet America, Pacific Express, Northeastern International, Hawaii Express, Best Airlines, and others. These facts point to the rapid expansion and development of the U.S. and global aviation industry over the years. Reports indicate that prospects such as globalization have increased movement from one region to another prompting the use of air transport.
Strengths and Weaknesses of the Article as It Relates to the Profession
One of the strengths of the article is that it gives truthful information regarding the growth and development of the U.S. aviation industry over the years. The article argues that the number of domestic U.S. airlines as well as that of passengers has been on the rise since the passage of the Airline Deregulation Act of 1978 (92 Stat. 1705). It can be argued that the act provided the much-needed economic freedom for the airlines. The argument that the U.S. aviation industry has undergone significant growth or expansion over the years is supported by Forbes & Lederman (2007) who argue that U.S. regional airline service has increased steadily in the past several years with no indications that the trend will slow down. Berry, Moreno-Hines, Nelson, & Welman (2004) are also in agreement that the deregulation of air transportation has played a big role in the sector’s development or expansion over the years. They argue that the domestic deregulation or airlines in the U.S. in 1978 was followed closely by the EU’s decision to deregulate its domestic market between 1987 and 1993. Countries such as Japan also followed the same path and deregulated its airlines from 1986.
Conclusions
This article explores the impact of the Airline Deregulation Act of 1978 (92 Stat. 1705) in the rapid growth and development of the U.S. aviation industry. It argues that the act has had numerous benefits particularly in the increase in the number of new airlines as well as the expansion of airports. The article gives insight into some of the factors behind the expansion of the global aviation sector. Following the analysis of this article, one can make significant contributions to the global aviation industry in the future particularly in the legislation context.
References
Berry, T. P., Moreno-Hines, F., Nelson, G. M., & Welman, S. K. (2004, March). Six Long-Term Business and Economic Trends That Will Influence the Air Transportation Industry Through 2025. In 45th Annual Transportation Research Forum, Evanston, Illinois, March 21-23, 2004 (No. 208231). Transportation Research Forum. Retrieved from https://ageconsearch.umn.edu/bitstream/208231/2/2004_EconomicTrends_paper.pdf
Forbes, S. J., & Lederman, M. (2007). The role of regional airlines in the US airline industry. Advances in Airline Economics, 2, 193-208. Retrieved from http://faculty.weatherhead.case.edu/forbes/book_chapter_oct06.pdf
NewMyer, D. A. (1990). The Impact of Deregulation on Airports: An International Perspective. Journal of Aviation/Aerospace Education & Research, 1(1), 11. Retrieved from https://commons.erau.edu/cgi/viewcontent.cgi?article=1010&context=jaaer