Author Question: What caused the end of airline regulation? What will be an ideal response? (Read 77 times)

FButt · **on:** Sep 11, 2019

Question 1

If you were director of scheduling at an airline or cruise line, how would you handle seasonality?

What will be an ideal response?

Question 2

What caused the end of airline regulation?

What will be an ideal response?

apple · **Reply #1 on:** Sep 11, 2019

Answer 1

Airlines and cruise lines are able to redeploy planes and ships to other markets whenever demand conditions warrant. Reducing or expanding service in various markets is a common feature within both sectors. Hotels do not have that luxury.

Answer 2

The decade of the 1970s was known as the stagflation period where the economy experienced stagnation in terms of economic growth and inflation. Inflation normally occurs when the economy grows too strongly. With prices for most objects rising, a search for scapegoats was on and regulation was pinpointed as a culprit. The connection was that regulated industries including the airlines had been allowed to pass along cost increases to consumers in the form of higher fares as a means of maintaining profitability. Thus, airlines had no incentive to control costs, especially those involving labor since they knew that they could obtain higher fares to offset such increases. Removing this connection was what deregulation accomplished.