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March, 2000, Vol. 123, No. 3
Transportation by air: job growth moderates
William C. Goodman
Commercial air transportation has grown
rapidly in the United States since 1938 or
earlier.1 The most significant reason for such growth is probably that air travel has become almost continuously more affordable. Ticket prices adjusted for inflation have been falling consistently since 1950 or earlier.2
Airfares have decreased over the years not because of any one consistent reason, but because of two distinct sets of circumstances: regulation and deregulation. From 1938 to 1978, Federal control of fares, routes, and even the existence of each airline prevailed. After the lifting of economic regulation, price competition was a major force. Before 1978, development of the commercial airplane itself contributed heavily to decreases in the costs of operations and consequently to lower fares (after adjustment for inflation). After 1978, when changes in routes and fares and the formation of new airlines became unrestricted, price competition and a variety of management responses to competition have reduced operatorsí costs. The resulting lower fares have multiplied demand and jobs in the industry.
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1 Annual numbers of passengers carried starting in 1938 can be found in the "Safety Record of U.S. Airlines," Air Transport Association, on the Internet at http://www.air-transport.org.
2 Real fares
also are from the Air Transport Association, on the Internet at
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