Airline Deregulation Act of 1978
The authors’ main argument is that air line deregulation act of 1978 has worked well in airline transport industry even if it is being criticized by few individual hat is has led to deterioration of quality services which used to exist before deregulation. He argues that problems of congestion and limited reemergence of monopoly together with the exploitation of minority customers aren’t failures of deregulation but rather a measure of its success. The problem is on the government which has not taken its responsibility to support the increasing demand for airlines and airports. He claims that since deregulation fares have tremendously reduced to about 10-18% lower than during regulation. He also says that airline productivity has grown tremendously due to removal of the previous detailed restrictions on air line prices and where they could fly. There is efficient hub-and spoke operations under deregulation which rarely existed during regulation hence proving the inefficiency of centralized government planning and free competitive markets superiority.
The quality of service improved with deregulation especially in rural areas but congestion, delays and discomfort has been the major problem travelers in the era of deregulation has experienced. The author claims that this problems aren’t failures of deregulation but a vindication to it eve though the quality of air travel experience has been compromised as a result. Although the author is for deregulation and attribute all the failures in air line transport to government failure I tent to differ with him on this line. Deregulation brings about cut throat competitions for airlines and fares. This competition obviously compromises on quality of the air travel services. Also with congestion of air lines accidents are more likely to occur under deregulation. With this trend of increase of planes and congestion customers are likely to be charged more fare especially those who are moving with urgency in exchange for shorter delays.
The author’s conclusions actually make sense by the fact that free markets practiced by other nations are more revenue generating than regulated markets. Other alternative conclusions which could be made basing on the evidence provided is that deregulation allowed free movement of products from one place to another quickly due to many airlines connecting to the destination instead of relying on one plane with only one airline (hub-and –spoke operations). Also regulation promotes huge potential of economies of hub-and-spoke operations that mark the efficiency and superiority of competitive free markets.