Airline Industry Overview
Background
At one time the airline industry resembled the utility industry to the extent that regulators
determined what firms could and could not do. In the 1970s, a time of runaway inflation, and
rising unemployment, many agreed that something had to change. In 1978 Congress passed the
Airline Deregulation Act, which facilitated the entry of new firms and freed them to charge
whatever fares they wanted and fly whatever routes they liked.3 Many new entrants materialized,
including new low fare airlines like Southwest, and cutthroat competition has been the rule since.
A decade after deregulation a wave of consolidation occurred. In the 1990s, a global
economic recession and surging energy prices attendant the Gulf War severely crippled airline
results. In the two years ended 1992, the U.S. airline industry lost approximately $6 billion.
Many carriers were dissolved. Venerable names such as Pan Am and Eastern disappeared, and
TWA and Continental......

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Title: Airline Industry
Approximate Word Count: 300
Approximate Pages: 2 (250 words per double-spaced page)

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