Airline Industry
...tors in that market, airport operations, and the interests of the public. This comprehensive economic management ended when Congress dis-mantled CAB with the expectation that the public would benefit from a less regulated industry—one easier to enter and more responsive to price com-petition. Understanding the current economic and institu-tional context of this complex industry, now dis-ciplined primarily by market forces, is important background for evaluating safety issues and the Fed-eral role. Thus, this chapter reviews the airline industry’s growth and major structural and opera-tional changes that have occurred since deregula-tion, explores public policies that affect the airline industry and safety issues, and concludes with the economic outlook for the industry. COMMERCIAL AIR TRANSPORTATION–MAJOR CHANGES Commercial air transportation includes flights by scheduled large jetliners, smaller commuter planes, and air taxis, as well as cargo and charter jet serv-ice. Each industry segment has substantially differ-ent safety and economic effects on the aviation sys-tem. Although subdivided differenty by the Federal Aviation Administration (FAA) and the Depart-ment of Transportation (DOT), the two broad cat-egories of airlines of concern to this report are: l 14 CFR Part 12 l—operations of aircraft with more than 30 seats or 7,500 payload-pounds; l 14 CFR Part 13 5—operations of aircraft with 30 seats or fewer. 1 Part 121 is usually associated with the major car-riers and Part 135 with the commuter airlines. OTA estimates that 450 million passengers trav-eled on all commercial flights in 1986, as shown in table 2-1. Large airlines operating under Part 121 ‘ These definitions can be confusing; 14 CFR 241 and 14 CFR 298 (and the general public) apply the terms “commuter” or “regional” to scheduled operations of aircraft with 60 seats or fewer. carried 95 percent of the passengers and accounted for 99 percent of the revenue passenger-miles, Part 135 commuter airlines transported 4 percent of the passengers and air taxis only 1 percent...