“It is a special pleasure for me today to sign into law the Airline Deregulation Act” – so said President Jimmy Carter in the White House in 1978.
“This legislation will permit us to achieve two critical objectives. One is to help our fight against inflation. And the other one is to ensure American citizens of an opportunity for low-priced air transportation.
“With this act, airlines can reduce their fares up to 50 per cent, opening up air travel to millions of Americans who would not otherwise be able to afford it.”
Until that moment, the government set most of the airfares within the US. Whether you wanted to travel on a sunny Friday in August or a wet Wednesday in January, and whether you booked months or minutes ahead, the ticket cost the same. Price controls bred an inefficient industry beyond the financial reach of normal people.
Only within a couple of large states – California and Texas – were airlines able to compete freely. President Carter, who was laid to rest this week aged 100, saw how carriers like Southwest Airlines were thriving. He believed the rest of the nation deserved the same freedom to fly.
Carter faced deeply entrenched opposition from the airlines: Delta warned the survival of the airline industry “could very well be in doubt”. But he persuaded Congress to pass an act that handed “the quality, variety, and price of air services” over to the free market.
All the old rules that restricted routes and schedules and fixed high fares were shelved. Any airline that could demonstrate to the Federal Aviation Administration that it was safe was free to fly anywhere within the US at prices of its choosing.
The airlines’ prophecies of doom for travellers looked ridiculous as fares tumbled and new routes were launched. Southwest, previously confined to Texas, led the charge. The then CEO, Howard Putnam, told me: “The first interstate route we picked was Dallas Love Field to New Orleans, with seven round-trips a day. Immediate success.”
Southwest’s share of the US aviation market trebled within five years.
Even though the benefits of free and fair competition promptly arrived as President Carter had predicted, in the UK and the rest of Europe vested interests fought to keep rivals at bay. During the 1980s, links between Britain, Ireland and the Netherlands slowly…
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