Originally Posted by SkyHigh
In America we believe in capitalism and free trade. The intent of regulation was purely to protect the conduits of business. Regulation was abolished since it only protected a gluttonous system that stunted our GNP through huge ticket prices. Since then free trade has worked to reduce ticket prices and to increase the variety and frequency of flights nationwide. There is no way the government would reinstall regulation now just to protect the fat paycheck tradition in the airlines. The price of a ticket from LAX to NYC would jump to $2500 in coach or more. The public wouldn't stand for it either. That genie is out of the bottle.
SKyHigh
From Issues in Science and Technology online, Winter 1999
By; John R. Meyer and Thomas R. Menzies
"The airline industry was originally regulated out of concern that carriers, left to their own devices, would compete so intensely that they would set fares too low to generate the profits needed to reinvest in new equipment and other capital. It was feared that this self-destructive behavior would, in turn, lead to the degradation of safety and service, ultimately leading to either an erosion of service in some markets or dominance by one or two surviving carriers"
Sounds like they hit the nail on the head in 1938, when the CAB was formed.
From the United States of America, Department of Transportation, Bureau of Statistics, Air Carrier Profile.
The Average Passenger Revenue per Passenger Mile for Domestic/Scheduled/Major airlines;
1960....$6.09/Pax mile
1970....$6.00/Pax mile
1980....11.49/ (First post deregulation figures available)
1990....13.43/Pax mile
1994....13.12/Pax mile
1995....13.48/Pax mile
1996....13.76/Pax mile
1997....13.97/Pax mile
1998....14.08/Pax mile
1999....13.72/Pax mile
2000....14.56/Pax mile
2001....13.25/Pax mile
2002....12.00/Pax mile(R)
2003....12.22/Pax mile (Last year figures available)
Adjusted for inflation,2003's $12.22 equates to $1.94 1960 dollars.
Conversely, the $6.09 in 1960 dollars converts to $37.86 in 2003 dollars.
Another list...Domestic/Scheduled/Major Airlines. Average Passenger Fare
YEAR....ACTUAL FARE.....(FARE converted to 2003 $)
1960....$30.01..............($186.55)
1970....$40.65..............($192.77)
1980....$84.60..............($188.91, First post deregulation data available)
1990....$107.86............($151.85)
1994....$103.21............($128.14)
1995....$106.66............($128.78)
1996....$110.37............($129.78)
1997....$114.10............($130.81)
1998....$114.08............($128.78)
1999....$114.99............($127.00)
2000....$121.27............($129.58)
2001....$111.60............($115.95)
2002....$101.94(R)........($104.26)
2003....$102.90............($102.90)
2003's average fare of $102.90 would equate to $16.30 in 1960.
When the airlines operated under the oversight of the Civil Aeronautics Board, not only was their route structure controlled by the CAB, but also the fare they were allowed to charge. As a result, the airlines were allowed to make a profit, something few airlines can claim today.
On many threads within this Forum, pilots bemoan the fact that we seem to be in a race to the bottom in regards to pilot compensation. Unfortunately, I see no other option available to the airlines if deregulation remains in effect.
The regulated era allowed the Pan Am's, TWA's, American"s, Delta's, Eastern's, Continental's, Western's, National's, Braniff's, Alegheny's, Piedmont's and United's to be built into thriving companies within a financially secure industry. Other than Southwest, I see no such success stories in the deregulated era.