The Airline Deregulation Act of 1978 was a United States federal law that radically changed the airline industry and transformed it into a system witnessed in modern times. Previously, the industry was heavily regulated by the government in routes, new airlines, fares, and cargo. The deregulation established a free market that currently drives the industry, supplying a customer’s demand. It led to an increased number of flights, passengers, and an overall number of airline companies. The Act of 1978 was a turning point in the industry since the government could no longer control every airline company aspect, one of the essential parts of a series of developments in the mid-’70s. The research will concern the controversial United Airlines and how it was changed after the deregulation act.
The cargo carrier airline’s name is United Airlines, which is now the third biggest airline in the world. William Boeing created the company in 1928, and it was made solely for departing mail (Davies, 2016). However, soon everything changed, and the company started transferring passengers over the Pacific. In 1928, it was also renamed to represent its creator’s surname (Boeing Aircraft & Transport Co.) (Davies, 2016). Having started its passenger service in 1929, it became the national air company in 1930 (Ison & Budd, 2017). Furthermore, because of its rich history, United Airlines claims to be the oldest existing commercial airline. At that time, the company used Boeings 40A, 80A, and 247 (Davies, 2016). United Airlines provided passenger and mail services throughout the Pacific and took nearly 27 hours to fly the route one way (Ison & Budd, 2017). For this reason, the firm was the first airline company to hire stewards and a nurse to assist customers when they are feeling nauseous.
After the deregulation law, United Airlines gained the ability to fly overseas routes, since before they act, they could not acquire this vital expansion. Deregulation law was the most significant law for the United since it allowed the company to grow its profitability by opening new routes and gaining new alliances. The Alliance between United Airlines and foreign companies such as Lufthansa, All Nippon Airways, and others was called Star Alliance (Ison & Budd, 2017). The partnerships fortified the airline’s position in the business, allowing them to perceive new routes and gain more profits.
However, after the deregulation law, United Airlines faced certain disadvantages as well. Since the government stopped financing the company, it had to modify and improve the customer service with its own money. Therefore, as customers complained, the service did not change and even became worse somewhere. Despite the increase in the number of plains and companies, United Airlines started charging more for their services. Moreover, since they have nearly monopolized the niche, United Airlines became even more focused on receiving income, prioritizing boarding, preferred sears, and other services (Kim, 2016). Furthermore, the company suffered through several pilot strikes due to several reasons such as alleged claims, a decrease in the pilot’s salary, and new schemes.
Conclusively, United Airlines mostly benefited from the Airline Deregulation Act in 1978. The lack of governmental regulations allowed the company to monopolize the air and quickly become the third-largest airline globally. The deregulation permitted United to fly new routes, use new planes, increase their number, charge more for the tickets based on the preferred seats, prioritize boarding, and other services. Although the quality of services was unchanging, and United had to pay for every expense inside their company, it still benefited immensely.
Davies, R. E. G. (2016). Airlines of the Jet Age: a history. Smithsonian Institution Scholarly Press.
Ison, S. & Budd, L. (2017). Low Cost carriers: Emergence, expansion and evolution. Routledge.
Kim, D. (2016). The effects of airline deregulation: a comparative analysis. The Journal of Business Economics and Environmental Studies, 6(3), 5–10. Web.