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Amid all the horrible stories about outrageous treatment of airline passengers these days, there is the insightful aspect of history to explain how all this came about. And, ironically, it has its roots in Central Florida when the first commercial airline industry began on Jan.1, 1914, with service from St. Petersburg to Tampa, a flight that lasted 23 minutes, reducing the on-land time of travel by several hours in this pre-bridge era.
But the service lasted only four months, not because it was inadequate but as a result of the exigencies of the coming of World War I. Afterward, the industry began to develop, so much so that Congress in 1938 passed legislation establishing the Civil Aeronautics Board that would oversee a widespread network of routes and uniform rates and regulations.
The model for the CAB was the Interstate Commerce Commission of 1887 that ensured the same goals for railroads during their period of development. A national system of train routes was effected, and all carriers charged the same rates on the same routes. Instead of competition, the goal was a national, stable system operated by private industry rather than the European model of state-owned enterprises.
Not surprisingly, as rail service was upstaged by the automotive industry in the 1920s, trains witnessed a decline in consumer usage. Further competition from the airlines in the 1930s — an era of growth in the skies no matter the Great Depression — also aided making rail service an anachronism. For that reason the federal government took little interest in trains, save for the creation of Amtrak in 1971 that merged passenger lines into a publicly funded service that soon fell short of its goal to run on a for-profit basis.
The benefits of a regulated airline system were obvious: communities, large and small, were serviced; the number of airlines was strictly limited so as to prevent underutilization; and all fares on the same routes were the same. Under the administration of President Jimmy Carter, some economists and Washington officials urged a deregulation of the industry on the grounds that more competition and lower fares would result. In 1978, the industry was deregulated, the CAB phased out, with only the Federal Aviation Authority, created in 1958, to deal with airline-safety issues.
Deregulation fever, surprisingly, was illustrated not by Republican conservatives but by liberals led by Stephen Breyer, now an associate justice of the Supreme Court, who worked for Senator Edward Kennedy, the Massachusetts Democrat. With their mathematical models finetuned, they made a convincing case. I reviewed Breyer's 1982 book, “Regulation and Its Reform,” in the Business History Review and was impressed with his arguments. So was Congress, and eventually other industries were deregulated, most especially, trucks and bus lines.
In retrospect, deregulation of airlines and other industries was a mistake. The one element that all the economists left out of their mathematical equations was service. Before regulation, airlines, charging the same fares, competed on service. You chose one over the other because their service was better, their seats bigger and their attendants uncompromising in attention to passengers.
I took my first airline flight in the spring of 1957 in the regulated days. I flew from my home in Sarasota where I had spent the Easter holiday to Orlando in order to get to my German II class by late-morning at Rollins College, taught by Professor Rudolph Fischer, who was a stickler on attendance. I left in the wee hours of the morning on National Airlines with a stop in Tampa, then on to Orlando. And I made my class in ample time.
Although there were few passengers, we were all treated royally. It was the best flight I ever had.
The tragedy of the deregulation era is that its record after almost 40 years is decidedly turbulent. Sure, fares have declined, as have the size of seats, the freedom to change dates and concerns for passengers.
What is worse, air carriers have received such preferential treatment in recent years. The numerous bankruptcy proceedings — more than 100 since 1978 — including virtually every major line, have cost the economy big bucks. And unlike other forms of transportation, the industry's airfields are subsidized by the federal government. Mergers have been readily approved by federal authorities and often result in higher fares. Many smaller markets are not well-served, except with premium fares. And the clincher: Passenger complaints are at the top of comparative consumer polls.
And if you think all this history is disturbing, then the next time you get on Interstate 4 and have to confront a legion of trucks and buses that make travel a nightmare, find a little solace in also blaming officials for this legacy of deregulation.