"Don't Panic"': A Primer on Airline Deregulation

The old dictum says that if the Devil did not exist, the Church would have had to invent him. Similarly, if the regulator didn't exist, the airline industry would have had to invent him-and did in 1938. A current question is what would happen to the industry were it totally deregulated. One thesis is that there would be a rush by existing and new entrants to those routes thought to be profitable. Other routes would be abandoned. Price competition would be destructive. With the essential link between economics and safety there would be an inevitable major air disaster, possibly involving a prominent Member of Congress. Public outcry and congressional responses would lead to the re-establishment of regulation. Since this was the sequence of events in the mid-30's, why re-learn that lesson? This thesis has been challenged, but the lesson of history . . . cannot be totally ignored. Secor D. Browne, Chairman Civil Aeronautics Board (January 1972)2