The current efforts of the Civil Aeronautics Board (CAB) to deregulate the airline industry and to restore it as much as possible to the rule of competition are discussed. This article focuses on the problems of transition, and on the problem of getting a grasp of what a rational policy for the transition would be. The case for deregulationis presented. The gradual approach to the goal of transferring from the governance by the CAB to the competitive market is discussed, and attendant problems are noted. The difficulty in the task of regulating prices in a period of transition is also noted. The question of whether discount fares of various kinds are discriminatory, and whether these fares cover marginal costs are considered. Long-run incremental costs and the impact on the regular fare-payer are also discussed. It is pointed out that the overriding responsibility of regulators should be to preserve the competitiveness of the industry's market structure as the principal means of protecting the interest of passengers.

  • Corporate Authors:

    Sage Publications, Incorporated

    275 South Beverly Drive
    Beverly Hills, CA  United States  90212
  • Authors:
    • Kahn, A E
  • Publication Date: 1979

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00315023
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 22 1980 12:00AM