Deregulation

The biggest change occurring in the airline industry was when Congress passed the Airline Deregulation Act in 1978. Since the industry has been able to run on market forces and operate on any domestic route. "Deregulation also embeds the idea of looking at the industry as a system." The process of deregulation on the airline industry changed the way the industry was run and the physical arrangement of airports. With deregulation came competition and new carriers. This resulted in increased air travel (as depicted by the chart below) and innovative programs and systems followed. For example, in order for airlines to attend to customer satisfaction they created the frequent flyer miles program and things such as the computer reservation systems. The greatest impact of deregulation was the increase in competition among the carriers. This resulted in the airline industry following an economic market model.

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