Research Paper: Regulation of Transportation Industries

Pages: 2 (831 words)  ·  Bibliography Sources: 2  ·  Level: College Senior  ·  Topic: Transportation  ·  Buy This Paper

Regulation of Transportation Industries

Aviation Industry

Aviation industry is large connecting different parts of the world which has been the reason business can be conducted from one place to another within the shortest time possible. It is the airline industry that has enabled globalization to take effect in other industries. The airline industry has enabled people to operate at an international level due to the interconnectivity of the markets which changed the nature of how business is conducted. The rise in the number of travelers across the globe for both business and leisure and the choice of air as the mode of transport saw the industry grow bigger. Different carriers have emerged making the industry one of the most competitive in the transport industry.

The industry has however been affected by various issues including recession in the early 1990's, the economic crisis and to a larger extent terrorism which saw a decrease in the number of travelers across the world. Most airline companies as a result made losses and had to look for alternative ways to restore customer confidence in the use of air transport and improve on profitability. The terrorist attacks which targeted planes shook the industry and as a result certain routes had to be abolished by the carriers as a security measure to ensure safety standards and at the same time they increased security in the industry to gain back the public's confidence. Technology has been used and screening measures for both cargo and passengers have been enhanced which has seen the industry's profitability increase over the years (Department of Homeland Security, 2012).

For many years the industry was regulated and the government closely monitored the industry. It was the duty of the U.S. government to determine the rates and routes which were to be followed by the carriers. The industry was however, deregulated in the year 1978 with the passage of the Airline Deregulation Act. There were several factors that led to the deregulation of the industry; the rise in the fuel price contributed immensely to the government's decision to deregulate the industry. It became very expensive to travel by air which led to fall in businesses and at the same time it became costly to maintain the airlines and remain profitable. The industry was therefore left to be controlled by the market where by the rates were market driven. Several restrictions were lifted and the industry has since become a free market where the rates and the routes are controlled… [END OF PREVIEW]

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