Airline Deregulation Act

Airline Deregulation Act

Summary

The airline deregulation act (ADA) was a US law that was signed into implementation on 24th October 1978 which had influences to the aviation industry. The significance of coming up with the law was to limit the federal government from control of fares, the entrance of new airlines into the market and making decisions of air routers.

Problem

The main issues that led to the signing of the act for it to become law were the economic crisis that had risen over the aviation industry. In 1973 before the bill was signed the sector was suffering from oil crisis and brought out the stagflation that impacted negatively to the economic environment (Lawrence, 2015).  Major airlines were being forced to implement some fare charges that made most of the local clients to pull out from their services by the government in place.

Significance of the problem

The major issue created by the regulation of the air industry before by the government brought about adverse effects that were vital to be addressed (Lawrence, 2015). Major issues to be addressed by the act was to maintain high competition in the air transport while ensuring that different private sectors are encouraged to enter into the air transport industry by bringing their new airlines.

Alternative Actions

The passage of the act was able to meet conditions that were favourable for the air transportation industry to grow. Some of the action that was provided by the statute was to allow airlines to cover routes that were underutilized by their competitors. The act also ensured that the existing mutual agreements between the airline owners were terminated.

Recommendation

Although the act was signed, there was exception that up to date the government is still in control of matters relating to safety and antitrust exemption. The government, therefore, should privatize the issues that concern to security and overseeing the agreements that are signed between airlines (Rhoades, 2016). This would ensure that the sector is independent and free from any government interferences.

References

Lawrence, Harry W. (2015). Aviation and the Role of Government. Kendall Hunt.

Rhoades, D. L. (2016). Evolution of international aviation: phoenix rising. Routledge.

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