Deregulation Blamed for Turbulence in Airline Industry

Lack of investment and oversight cited as factors behind recent air travel issues

Mar. 25, 2026 at 9:07am

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The article argues that the deregulation of the airline industry nearly 50 years ago is a key factor behind the current challenges facing air travel, including safety issues, service declines, and lack of access for smaller cities. The author calls for a return to greater regulation and government investment in air traffic control, airport infrastructure, and innovation to address these problems and restore the airline industry to its former stability and quality.

Why it matters

The state of the airline industry has wide-ranging impacts on the economy, travel, and quality of life for many Americans. Deregulation has led to consolidation, reduced service, and safety concerns, underscoring the need for a policy rethink to ensure a robust and reliable air transportation system.

The details

In the 1970s, the Airline Deregulation Act eliminated route and price regulation, leading to the collapse of the Civil Aeronautics Board. This unleashed unbridled competition that resulted in airline bankruptcies, mergers, reduced union wages, and the loss of service to small communities. The lack of regulation also contributed to issues like higher prices on some routes, monopolistic exploitation, and underinvestment in critical infrastructure like air traffic control systems.

  • In 1978, Congress passed the Airline Deregulation Act.
  • A decade after deregulation, one of its leading proponents, Alfred Kahn, admitted there were higher prices on some routes and a real danger of 'monopolistic exploitation'.

The players

Civil Aeronautics Board

A federal agency that previously regulated the routes airlines could fly and the prices they could charge, ensuring a balance between competition and stability in the industry.

Ted Kennedy

A Democratic senator who was one of the key proponents of airline deregulation in the 1970s.

Stephen Breyer

A future Supreme Court justice who also advocated for airline deregulation in the 1970s.

Alfred Kahn

A leading proponent of airline deregulation who later admitted there were negative consequences, including higher prices and monopolistic exploitation.

Edward Gorrell

The head of a major airline trade association in the 1930s who argued that airline policy should follow the 'traditional American way' of 'providing a basic economic charter that promises the hope of stability and security, and orderly and intelligent growth under watchful governmental supervision.'

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What they’re saying

“There is a way out. Politicians need to learn the lessons of hundreds of years of infrastructure policy and once again embrace the role of government in providing high-quality infrastructure.”

— Ganesh Sitaraman, Author

“The path forward for airline policy should be the 'traditional American way' of 'providing a basic economic charter that promises the hope of stability and security, and orderly and intelligent growth under watchful governmental supervision.'”

— Edward Gorrell, Head of a major airline trade association

What’s next

Policymakers should commit to spending more on air traffic control, airport infrastructure, and innovation, while also reviving regulation to ensure small and midsize cities have access to flights and to address issues like ever-changing prices, junk fees, and small seats.

The takeaway

The deregulation of the airline industry nearly 50 years ago has led to a range of problems, from safety concerns to reduced service and access, underscoring the need for a policy shift that embraces greater government regulation and investment to restore stability and quality to the air travel system.