Airline Deregulation as it relates to Competion and Unions Essay

Airline Deregulation as it relates to Competion and Unions - Essay Example The airline deregulation provides significant benefits to an average traveler. This Act removed many of the airline restrictions and thus totally altered the concept of civil aviation in the US. Subsequent to the integration of jets into the market, the air travel industry experienced incredible growth rate. As a result of steady increase in air travel, the federal regulators were forced to deregulate the industry to meet the increasing needs of the air travelers. The airline deregulation process augmented market competition once the marketers got the freedom to determine their own prices. It also persuaded the airline providers to enter in price competition in order to dominate the air travel market. Reports point out the notable effects of deregulation; â€Å"the inflation adjusted 1982 constant dollar yield for airlines has fallen from 12.3 cents in 1978 to 7.9 cents in 1997. This means that airline ticket prices are almost 40% lower today than they were in 1978 when the airlines were deregulated† (Thierer, 1998). Since this trend offered fruitful economic benefits to passengers, the passenger miles flown tremendously grew. For instance, in 2005, there were 750 million passenger miles whereas this figure was only 250 million in 1978. The magnitude of market competition was more in Europe as compared to US.