Editing Airline Deregulation Act (section)

==History==
Since 1938, the federal CAB had regulated all domestic interstate [[Aviation|air transport]] routes as a [[public utility]], setting fares, routes, and schedules.<ref>{{cite web |title=Air Transportation: Deregulation and Its Consequences |url=https://www.centennialofflight.net/essay/Commercial_Aviation/Dereg/Tran8.htm |website=www.centennialofflight.net}}</ref><ref name ="Barnum">{{cite web |title=What Prompted Airline Deregulation 20 Years Ago? What Were the Objectives of That Deregulation and How Were They Achieved? |url=https://corporate.findlaw.com/law-library/what-prompted-airline-deregulation-20-years-ago-what-were-the.html |website=Findlaw}}</ref> Airlines that flew only [[intrastate airline|intrastate]] routes, however, were not regulated by the CAB but were regulated by the governments of the states in which they operated. One way that the CAB promoted air travel was generally attempting to hold fares down in the short-haul market, which would be subsidized by higher fares in the long-haul market. The CAB also had to ensure that the airlines had a reasonable [[profit (accounting)|rate of return]].

The CAB had earned a reputation for bureaucratic complacency; airlines were subject to lengthy delays when they applied for new routes or fare changes, and were often not approved. For example, [[World Airways]] applied to begin a low-fare New York City–to–Los Angeles route in 1967; the CAB studied the request for over six years, only to dismiss it because the record was "stale".<ref name="Barnum" /> [[Continental Airlines]] began service between [[Denver]] and [[San Diego]] after eight years only because a [[United States Court of Appeals]] ordered the CAB to approve the application.<ref>{{cite court|litigants=Continental Air Lines, Inc. v. Civil Aeronautics Board|vol=519|reporter=F.2d|opinion=944|court=C.A.D.C.|date=1975|url=https://law.justia.com/cases/federal/appellate-courts/F2/519/944/85466/}}</ref><ref name="Barnum" />

This rigid system encountered tremendous pressure in the 1970s. The [[1973 oil crisis]] and [[stagflation]] radically changed the economic environment, as did technological advances such as the [[Wide-body aircraft|jumbo jet]]. Most major airlines, whose profits were virtually guaranteed, favored the rigid system, but passengers who were forced to pay escalating fares were against it and were joined by communities that subsidized air service at ever-higher rates. The [[United States Congress]] became concerned that air transport, in the long run, might follow the nation's [[Rail transport in the United States|railroads]] into trouble. The [[Penn Central Transportation Company|Penn Central Railroad]] had collapsed in 1970, which was at that time the largest [[bankruptcy]] in history; this resulted in a huge taxpayer-funded bailout and the creation of the government-owned corporations [[Consolidated Rail Corporation|Conrail]] and [[Amtrak]].<ref>{{cite book |last=Stover |first=John F. |title=American Railroads |url=https://books.google.com/books?id=aPNQXN9Onv4C&pg=PA234 |publisher=[[University of Chicago Press]] |year=1997 |page=234 |isbn=978-0-226-77658-3}}</ref>

Leading economists had argued for several decades that the regulation led to inefficiency and higher costs. The [[Presidency of Jimmy Carter|Carter administration]] argued that the industry and its customers would benefit from new entrants, the abolishing of price regulation, and reduced control over routes and hub cities.<ref>{{cite book |title=Up in the Air: How Airlines Can Improve Performance by Engaging their Employees |last=Bamber |first=Greg J. |author2=Jody Hoffer Gittell |author3=Thomas A. Kochan |author4=Andrew Von Nordenflycht |year=2009 |publisher=[[Cornell University Press]] |location=Ithaca, NY |isbn=978-0-8014-4747-1 |url=https://archive.org/details/isbn_9780801447471}} Ch. 5.</ref>

In 1970 and 1971, the [[Council of Economic Advisers]] in the [[Presidency of Richard Nixon|Nixon administration]], along with the [[United States Department of Justice Antitrust Division|Antitrust Division]] of the [[United States Department of Justice]] and other agencies, proposed legislation to diminish [[Price fixing|price collusion]] and entry barriers in rail and [[Trucking industry in the United States|trucking]] transportation. While the initiative was in process in the [[Presidency of Gerald Ford|Ford administration]], the [[United States Senate Judiciary Committee|Senate Judiciary Committee]], which had jurisdiction over [[antitrust law]], began hearings on airline [[deregulation]] in 1975. Senator [[Ted Kennedy|Edward "Ted" Kennedy]] took the lead in the hearings.

The committee was deemed a friendlier forum than what likely would have been the more appropriate venue, the [[United States Senate Commerce Subcommittee on Aviation Operations, Safety, and Security|Aviation Subcommittee]] of the [[United States Senate Committee on Commerce, Science and Transportation|Commerce Committee]]. The Ford administration supported the Judiciary Committee initiative.

In 1977, President [[Jimmy Carter]] appointed [[Alfred E. Kahn]], a professor of [[economics]] at [[Cornell University]], to be chair of the CAB. A concerted push for the legislation had developed from leading economists, leading [[think-tank]]s in Washington, a civil society coalition advocating the reform (patterned on a coalition earlier developed for the truck-and-rail-reform efforts), the head of the regulatory agency, Senate leadership, the Carter administration, and even some in the airline industry. The coalition swiftly gained legislative results in 1978.<ref>{{cite book|last=McCraw|first=Thomas K.|title=Prophets of Regulation|isbn=0674716078|publisher=Belknap Press|location=Cambridge, Massachusetts|year=1984|chapter=Chapter Seven: Kahn and the Economist's Hour|url=https://archive.org/details/prophetsofregula00thom}}</ref>

Dan McKinnon would be the last chairman of the CAB and would oversee its final closure on January 1, 1985.