CURRENT PROBLEMS IN THE AIRLINE INDUSTRY

Current Problems In The Airline Industry Have Made Some Members Call For Limited Re-Regulation Of The Airlines

Current Problems In The Airline Industry Have Made Some Members Call For Limited Re-Regulation Of The Airlines

The airline industry has seen many changes in the past, and currently contunies to change. During the regulatory period of the industry, consumers faced high prices forced on them by the tight regulation of the Cival Aeronautics Board (CAB). After government regulation was eliminated consumers benefited from lower fares and increased sensitivity to consumer prefrences. The result of this sensitivity was more price and service options made available to the public, such as frequent flyer miles. (Lee, D. 2009)

Presently the industry is evolving into a price maker industry as it was during regulation. As with any market with high barriers to entry and exit consumers could be adversely effected. These barriers or lack of industry contestability, are directly contradicting to the deregulation action created by congress in the hopes of being socially beneficial. The principles of air law have been evolving at a rapid pace since the beginning of the Twenty-first Century, however, they also remain inadequate to meet the needs of contemporary society. Concern for this immense growth and the accompanying implications produced the impetus to devise a means to ensure orderly and appropriate development. (Kane 2008)

Airlines have become a luxury and necessity for passengers because of the quickness of travel. The airline industry is responding to the growing demand for air travel. As the lifestyles of people change and become quicker paced so does the demand for quick transpoortation methods. Airlines are responding to sociey's and because of the low degree of contestability they can control prices in many ways. Recently a trend of collusion has raised airline concentration almost ...