Airports and Airline Deregulation

Prior to the Airline Deregulation Act of 1978, airline routes and airfare were established by the Civil Aeronautics Board (CAB). Airlines were allowed to charge whatever they wanted for airfare, based upon CAB approval. The cost of additional aircraft was eventually passed on to the consumer. Initially, the high cost for airfare restricted travel to the businessperson and the elite who could afford it.

Increases in passenger travel were moderate. Most airports were already underutilized and growth was achieved by adding terminals or runways on existing airport sites. The need for new airports was not deemed critical for the near term.

Following deregulation, the airline industry had to prepare for open market competition. This meant that airfares were expected to decrease dramatically. Airlines began purchasing hoards of planes, and most routes were "free game." Airlines had to purchase more planes and fly more routes in order to remain profitable. The increase in passenger traffic was expected to come from the average person who could finally afford air travel.

Deregulation made it clear that airport expansion would be necessary. While airport management conducted feasibility studies, the recession of 1979-1983 occurred. Several airlines such as Braniff filed for bankruptcy protection under Chapter 11 and the airline industry headed for consolidation through mergers and leveraged buyouts.

Cities took a wait-and-see attitude rather than risk billions in new airport development. Noise abatement policies, environmental projection acts, and land acquisition were viewed as headaches. The only major airport built in the last 20 years was Dallas-Ft. Worth, which was completed in 1974.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook

Post a comment