Impacts on Commercial Airline Industry as Result of Deregulation

Airline Deregulation

Impact on Commercial Airline Industry as a Result of Deregulation

The airline industry in the United States began functioning almost as soon as the Wright brothers made their first flight at the Killdevil Hills in North Carolina. In 1903, mail began to be carried by airplanes over short routes, so the United States government created an agency to help regulate how this was accomplished to make it safe for carriers. This agency, called the Civil Aeronautics Board (CAB), first regulated mail carriers (since there were no passenger flights at the time), but when passenger flights began the board also dealt with how people would be moved also. The CAB was responsible for all areas of passenger flight such as ticket price, awarding of routes to different carriers, and how the planes were to be maintained. Because the CAB sometimes chose routes and different rewards in favor of one airline over another (in some cases because of a personal relationship (Siddiqi)), deregulation was called for starting as early as the 1940's (Kost). But, an actual act deregulating the airlines did not occur until 1978 when it was determined that it was the best course for the flying public (Siddiqi). There have been good and bad consequences of that deregulation, but the focus here is to determine if deregulating the airlines has led to a greater number of fatalities and crashes because of faulty maintenance. This essay first provides a look at what the 1978 act meant for the airline maintenance field, and then examines how crashes due to maintenance issues were affected during the ten-year periods immediately preceding and following deregulation in 1978.

Deregulation Effects

The original goal of deregulation, as it always is when deregulation of an industry happens, was to give carriers more freedom. This was a consequence of the move but there were others. Airlines were able to compete with one another on a more even playing field than they had before. Because of CAB influence, there were four large domestic carriers as of 1978 and one major U.S. carrier conducting international flights. These airlines maintained the integrity of the routes they were given, and they abided by the ticket prices that were handed down by CAB. However, because actual competition was taken out of the equation, airlines were not able to change prices to benefit passengers or make any other positive moves that would have enhanced customer relations. However, deregulation opened the playing field so that all carriers could go after any routes they wanted, and also made it easier for lower cost airlines to enter the market. This decreased the cost of flights and meant that customers received more importance because all of the airlines needed more people flying to justify the increased number of routes and amenities. The primary issue was that some people thought that safety would be compromised. This could happen because airlines needed to cut costs in order to be more competitive (Logan). Since the airlines cannot cut costs when it comes to passengers (or defray some of their costs by increasing fares or adding other fees), the cost cutting had to be done in other areas. One of these cost cutting strategies is to relax the frequency of maintenance on the airplanes (Kost). People have worried that this would take place among the airlines, but is that concern real?

Deregulation and Airline Crashes due to Improper Maintenance

Several studies have been conducted to try and determine whether deregulation has caused a greater incidence of airline accidents, or at the very least loss of flight time, since deregulation occurred for the airline industry in 1978. The first issue is whether more actual crashes have occurred since that time. Some will point to 1985 which was the worst year in United States airline history. More fatalities occurred that year than had been recorded before or have been since (Logan). It started with the deaths of 70 people (out of 71) on a flight out of Reno, NV which was determined to be maintenance related. The final crash that year was of a DC-9 flying from Newfoundland which caused the deaths of all 256 people on board. The cause was determined to be icing of the wings, but this was seen as an issue that the ground crew had not taken care of during routine maintenance prior to takeoff. Between these two events, 1,190 people were killed in crashes that could all be traced back to improper maintenance and/or pilot error. However, this particular year was an anomaly as far as fatalities, and crashes in general, went. From 1979 through 1988, there were 86 crashes that resulted in fatalities; 16 of those crashes happened in 1985. In the ten years prior to deregulation, 1969-1978, there were 105 airline crashes that could be attributed to the above causes. Also during this period, the worst airline disaster in world airline history occurred outside of Tenerife in Spain. These crashes happened around the world and they were not exclusively American flights; however, the incidence of U.S. disasters was less over this time period also.