Airline Deregulation and Laissez-Faire Mythology by Stephen Paul Dempsey, Andrew R. Goetz

By Stephen Paul Dempsey, Andrew R. Goetz

Airline deregulation is a failure, finish Professors Dempsey and Goetz. They attack the traditional knowledge during this provocative booklet, discovering that the Airline Deregulation Act of 1978, championed by way of a profound political circulate which additionally encouraged the deregulation of the bus, trucking, rail, and pipeline industries, didn't in attaining the guarantees of its proponents. basically now's the total influence of deregulation being felt. Airline deregulation has led to extraordinary focus, depressing carrier, a deterioration in labor-management family members, a narrower margin of defense, and better costs for the patron. This entire e-book starts via exploring the tactic, strategies, and egos of the foremost airline robber barons, together with Frank Lorenzo and Carl Icahn. In separate chapters, the strengths, weaknesses, and company cultures of every of the foremost airways are evaluated. half assesses the political, fiscal, and social justifications for brand new Deal legislation of aviation, and its deregulation within the overdue Seventies. half 3 then addresses the key results of deregulation in chapters on focus, pricing, provider, and safeguard, and half 4 advances a legislative schedule for fixing the issues that experience emerged. Professors Dempsey and Goetz suggest a center process dependable govt supervision among the "dead hand of legislation" of the Thirties and the modern evil of marketplace Darwinism. The ebook could be of specific curiosity to airline and airport executives, executive officers, and scholars and students in public coverage, economics, company, political technological know-how, and transportation.

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But much of its corporate culture was shaped by his predecessor, Richard Ferris. Ferris was one of the major actors in the quest for deregulation. As United's chief from 1976 until 1987, Ferris led the carrier to break ranks with the rest of the industry and promote deregulation. As the nation's largest carrier, United believed that the deregulated skies would be friendly to it. United worked long and hard behind the scenes to persuade Congress and the Carter administration to pass the Airline Deregulation Act of 1978.

But carrier profitability crumbles. Couple a prolonged recession with excess capacity and high debt service and we see another round of bankruptcies and mergers like the one we endured in the early 1980s. When the dust settles, the industry will be even more concentrated. 8 billion) in 1991. , in 1903. CORPORATE PIRATES AND ROBBER BARONS The airline industry has always attracted people with huge egos. Millionaires like Howard Hughes and flying aces like Eddie Rickenbacker found the allure of the heavens irresistible.

People's "no frills" fares were matched by United and Continental, and an economic bloodbath ensued. In July 1986, United agreed to take Frontier off Burr's hands for $146 million, with the contract condition that United negotiate with Frontier's unions to reach an agreement satisfactory to United. United met with the pilots, but not the other four Frontier unions. 48 Burr had little choice but to put Frontier into bankruptcy in late August 1986. And then there were two in Denver. Prices and profitability began to climb.

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