AIRLINE INDUSTRY

Deregulation of Airline Industry

Deregulation of Airline Industry

Abstract

The purpose of this study is to scrutinize the repercussions of the Airline Deregulation act of 1977 and Chicago conference of 1944 on the performance of airline companies operating in the airline industry. A major change in the usage of advanced technology can be observed after the deregulations in the industry. The research also compares the performance of EasyJet Airline Company before and after the occurrence of the deregulation. The findings of several studies have presented the mixed outcomes (positive & negative) with respect to Airline Deregulation.

Introduction3

Discussion3

1. Deregulation Act of 19773

2. Chicago Conference 19445

3. Aviation after 1977's Deregulation & Chicago's Conference6

4. Overview of EasyJet8

5. How low cost module can be so successful8

Conclusion10

Reference11

Introduction

In 1978, an Act called the Airline Deregulation Act was created which shift the overall control of managing air travel (air industry) from political forces to market forces. Prior to deregulation, CAB (Civil Aeronautics Board) controls the decisions of airline industry. CAB (Civil Aeronautics Board) controlled the resource allocation decisions, exit of existing players, entry of new entrants, mergers & acquisitions, inter career agreements and price determination of the airline service. CAB (Civil Aeronautics Board) officially terminated in 1984 under the CAB Sunset Act. The air travel market (industry) liberalization was an element of the deregulation move which was based on the growing realization, that an economy which was politically controlled had no public interest (Rosenstein, D., 2013, PP. 1-17).

Discussion

1. Deregulation Act of 1977

Deregulation of the airline is the phrase which is associated with eliminating the governmental obligations or restrictions on the entrance of market in the airline industry and price setting structure of the airline industry. The elimination of imposition is frequently applied to the Airline Deregulation Act of 1977, in which all the key players were allowed to involve in open competition in the selection of specific routes and destinations. The Airline Deregulation Act 1977 was projected to address the troubles of narrowed number of aviation available at airport; in addition it was also aimed at accelerating and fostering the airline industry (ICAO, 2013, n.d)

Deregulation of the airline industry faces a number of criticisms and is subject to many controversies on the basis of its pros and cons. Apart from this, literature comprise of studies highlighting the way airline deregulation has changed the technology, services, aviation, fares, safety and technology. The reaction of airline companies was different from each other about this airline deregulation. Some companies become victorious while some of them due to severe competition exit from the airline market. The focus of this research paper would be to analyze the impact of Airline Deregulation on the performance of the Easy jet.

The Airline Deregulation in U.S airline industry has resulted in several changes to aviation. The ticket prices dropped drastically by one-third and subsequently more and more people are approaching airline services for commercial aviation. It has been documented that more than 1.6 million people across the United States of America use Airline services every ...