Posted: June 20th, 2013

Write and opinion analyzing the essay listed below:

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he 1978 Airline Deregulation Act ended most of the political control of airline regulation and shifted it towards market control (Cox & Smith, 2008). The direct and indirect costs of airline deregulation can be surmised in the realization that, in all of twenty-seven years before deregulation, not a single airline went bankrupt. After deregulation of the airlines in 1978, over 160 airlines have gone bankrupt, raising the rate of bankruptcy ten times of the general businesses of our economy. An example of this turnover is evidenced by the bankruptcy of Independence air, established in 2004 and bankrupted and closed by 2005. The Government Accounting office of the United States commented on the long term effects of deregulation, stating that “while the airlines industry was deregulated 27 years ago, the full effect on the airline industry’s structure is only now becoming evident” (Morris, 2005).
Before deregulation in the 1970s, the air transportation system was struggling with the overly difficult regulatory system in place. The regulations handicapped any changes that needed to be made and drew out processes in red tape that could almost not be surmounted. Instead of mending this system that was bogged down with too much paperwork, Congress decided to scrap it and start over with a new system and they completely absolved federal controls over the entry and exit of airlines, flight schedule rules, service quality standards, and financial oversight and airfare regulations. The only element that stayed under federal control was airline safety regulations.CLICK HERE TO GET MORE………
Evidence that proponents of deregulation point to is the increasing numbers of customers patroning airlines since 1978. This statistic is debatable because the rate of increase is actually very similar to the increase patterns before deregulation was enacted, meaning that it might be due to other reasons than the state of airline transportation. Proponents also point out that rates for the customers dropped significantly after deregulation; but again, the trend for price decrease is very similar to that which was occurring before deregulation and therefore could be a fallacy to credit to the change (Morris, 2005). During this timeline, the availability of online booking has occurred, decreasing the need for people working as travel agents or booking clerks, which could easily be attributed with this savings. Even if a debate chooses to attribute the ticket fare reduction to deregulation and admits the claimed ten percent ticket price reduction, which amounts to about $35 on a typical round trip ticket, that benefit hardly outweighs the costs.
The price of airfare alone, even if it is a credit to the advantage side, is beginning to appear pretty weak in comparison with the disadvantages. While airfares have dropped more than 15 percent in the last four years, “in the same time frame, twenty airlines have gone bankrupt” (Morris, 2005). Beyond the obvious inability to provide service when the companies no longer exist, that means that number of people lost their jobs, lost their pension obligations, and caused a ripple effect on the economies that their airlines served. Even those companies which somehow continue to limp on through are creating backslides in standards of living for their employees. Only one example of this is when Northwest imposed a 25 percent wage reduction on its machinists (Morris, 2005). One only has to imagine what that would do to their own livelihood to suddenly have a fourt CLICK HERE TO GET MORE………

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