Editing Airline (section)

====Deregulation====
[[File:Pan Am Boeing 747 at Zurich Airport in May 1985.jpg|thumb|[[Pan Am]] [[Boeing 747]] ''Clipper Neptune's Car'' in 1985. The deregulation of the American airline industry increased the financial troubles of the airline which ultimately filed for bankruptcy in December 1991.<ref>{{cite web|url=http://www.centennialofflight.net/essay/Commercial_Aviation/Bankruptcy/Tran9.htm |title=Air Transportation: The Airline Bankruptcies of the 1980s |publisher=centennialofflight.net |access-date=22 August 2010}}</ref>]]

The 1978 U.S. [[Airline deregulation act|airline industry deregulation]] lowered federally controlled barriers for new airlines just as a downturn in the nation's economy occurred. New start-ups entered during the downturn, during which time they found aircraft and funding, contracted hangar and maintenance services, trained new employees, and recruited laid-off staff from other airlines.

Major airlines dominated their routes through aggressive pricing and additional capacity offerings, often swamping new start-ups. In the place of high barriers to entry imposed by regulation, the major airlines implemented an equally high barrier called [[loss leader]] pricing.<ref name="Andrew R. Thomas">{{cite news|url=http://my.safaribooksonline.com/book/current-affairs/9781430236771|title=Mr. Soft Landing: Airline Industry Strategy, Service, and Safety|publisher=Apress|year=2007|access-date=7 May 2012|archive-date=2 June 2012|archive-url=https://web.archive.org/web/20120602002044/http://my.safaribooksonline.com/book/current-affairs/9781430236771|url-status=dead}}</ref> In this strategy an already established and dominant airline stomps out its competition by lowering airfares on specific routes, below the cost of operating on it, choking out any chance a start-up airline may have. The industry side effect is an overall drop in revenue and service quality.<ref>{{cite web|url=http://asq.org/quality-report/10-year-analysis.html |website =American Society of Quality (ASQ)|title = The American Society for Quality Debuts Quarterly Quality Report with 10-Year Analysis}}</ref> Since deregulation in 1978 the average domestic ticket price has dropped by 40%.<ref>{{cite web|url=http://web.mit.edu/airlines/analysis/analysis_airline_industry.html |publisher =Massachusetts Institute of Technology|title = Airline Industry Overview}}</ref> So has airline employee pay. By incurring massive losses, the airlines of the USA now rely upon a scourge of cyclical Chapter 11 bankruptcy proceedings to continue doing business.<ref>{{cite web |url= http://www.slate.com/articles/business/moneybox/2011/12/blame_jimmy_carter_for_all_the_airline_bankruptcies_or_better_yet_thank_him_.html |title=Air Fail|publisher = Slate |work = Moneybox|date = 1 December 2011|last = Yglesias|first = Matthew}}</ref> [[America West Airlines]] (which has since merged with US Airways) remained a significant survivor from this new entrant era, as dozens, even hundreds, have gone under.

In many ways, the biggest winner in the deregulated environment was the air passenger. Although not exclusively attributable to deregulation, indeed the U.S. witnessed an explosive growth in demand for air travel. Many millions who had never or rarely flown before became regular fliers, even joining [[frequent flyer]] loyalty programs and receiving free flights and other benefits from their flying. New services and higher frequencies meant that business fliers could fly to another city, do business, and return the same day, from almost any point in the country. Air travel's advantages put long-distance intercity [[railroad]] travel and bus lines under pressure, with most of the latter having withered away, whilst the former is still protected under [[nationalization]] through the continuing existence of [[Amtrak]].

By the 1980s, almost half of the total flying in the world took place in the U.S., and today the domestic industry operates over 10,000 daily departures nationwide.

Toward the end of the century, a new style of [[low-cost carrier|low cost airline]] emerged, offering a no-frills product at a lower price. [[Southwest Airlines]], [[JetBlue]], [[AirTran Airways]], [[Skybus Airlines]] and other low-cost carriers began to represent a serious challenge to the so-called "legacy airlines", as did their low-cost counterparts in many other countries.<ref>{{Cite news|url=http://www.cnn.com/travel/article/budget-airline-trends-2016/index.html|title=Budget airlines changed the world. What next?|date=21 March 2016|work=CNN Travel|access-date=14 October 2017|language=en}}</ref> Their commercial viability represented a serious competitive threat to the legacy carriers. However, of these, [[ATA Airlines|ATA]] and Skybus have since ceased operations.

Increasingly since 1978, US airlines have been reincorporated and [[off spin|spun off]] by newly created and internally led management companies, and thus becoming nothing more than operating units and subsidiaries with limited financially decisive control. Among some of these [[holding company|holding companies]] and [[parent company|parent companies]] which are relatively well known, are the [[UAL Corporation]], along with the [[AMR Corporation]], among a long [[list of airline holding companies]] sometime recognized worldwide. Less recognized are the [[private-equity firm]]s which often seize managerial, financial, and [[board of directors]] control of distressed airline companies by temporarily investing large sums of [[Equity (finance)|capital]] in air carriers, to rescheme an airlines assets into a profitable organization or [[liquidate|liquidating]] an air carrier of their profitable and worthwhile routes and business operations.{{Citation needed|date=January 2020}}

Thus the last 50 years of the airline industry have varied from reasonably profitable, to devastatingly depressed. As the first major market to deregulate the industry in 1978, U.S. airlines have experienced more turbulence than almost any other country or region. In fact, no U.S. [[legacy carrier]] survived bankruptcy-free. Among the outspoken critics of deregulation, former CEO of American Airlines, [[Robert Crandall]] has publicly stated: "Chapter 11 bankruptcy protection filing shows airline industry deregulation was a mistake."<ref>{{cite web|url=https://www.cnbc.com/2011/11/29/amr-filing-shows-airline-deregulation-failed-exceo.html |title=Robert Cranall former CEO AA, CNBC |website=[[CNBC]] |date=November 29, 2011 |url-status=live |archive-url=https://web.archive.org/web/20130429202738/http://www.cnbc.com/id/45477274/AMR_Filing_Shows_Airline_Deregulation_Failed_Ex_CEO |archive-date=29 April 2013 }}</ref>