| Airline deregulation was instituted because regulation was viewed as inefficient and excessively expensive. This study evaluates the policy, using the normative goals established by the policy makers.; Seven of the nine goals have been achieved by letting the market place forces regulate the industry. The major objectives were to provide a safe, adequate, efficient, competitive, low-priced air transportation system. These goals have been largely met. In the process, many new carriers have started, but most have failed. However, there are more carriers competing in the deregulated environment--all in the category of smaller carriers. Southwest Airlines is the largest of the new carriers with about five percent of the market. The most profitable carriers are the smaller carriers. Service to small and isolated communities is still subsidized by the federal and, in some cases, local governments. The vast majority of communities have air service and more choices than prior to deregulation. The industry's executive officers are still seeking operating strategies that reduce costs to make their companies profitable--some have succeeded, others have not. Employees and investors have not fared well because of the turmoil in the industry which market forces have created. Both were protected in the regulated environment. |
