[FUNAV] M1 (P2): Air Transportation (Maturity-Jets Arrive, Economic Developments, & Federal Legislation and the Airlines)

1956

[Maturity – Jets Arrive: 1958-1978]

By ____ the CAA recognized the inevitable and held a conference to plan for the jet age

Federal Aviation Agency (FAA)

[Maturity – Jets Arrive: 1958-1978]

Triggered by the collision of two aircraft over the Grand Canyon and similar accidents, a law creating a new _______.

Federal Aviation Agency (FAA)

[Maturity – Jets Arrive: 1958-1978]

It was an independent and comprehensive government agency to control all aviation matters, both civil and military

Federal Aviation Agency (FAA)

[Maturity – Jets Arrive: 1958-1978]

Centralized air traffic control began less than a month after the bills were introduced

December 30, 1969

[Maturity – Jets Arrive: 1958-1978]

On ______, the Boeing 747 was certified and the term “wide-body” was introduced for the first time

Boeing 747

[Maturity – Jets Arrive: 1958-1978]

It was able to carry about 380 passengers in an 8- or even 10-abreast, twin-aisle, mixed-class layout

Flight recorders,

Weather radar,

Terrain-avoidance systems

[Maturity – Jets Arrive: 1958-1978]

With the introduction of many more jets (Lockheed L-1011 TriStar, McDonald Douglas DC10, Airbus A300) the airline industry has introduced one technological advancement after another: (3)

Flight recorders

[Maturity – Jets Arrive: 1958-1978]

Devices (black boxes) that record flight data and cockpit audio to help investigators determine the cause of accidents.

Weather radar

[Maturity – Jets Arrive: 1958-1978]

Equipment that detects storms, rain, and turbulence ahead of the aircraft so pilots can avoid hazardous weather.

Terrain-avoidance systems

[Maturity – Jets Arrive: 1958-1978]

Safety systems that warn pilots if the aircraft is too close to the ground or mountains, helping prevent controlled-flight-into-terrain accidents.

Airline Deregulation Act of 1978

[Maturity – Jets Arrive: 1958-1978]

The passage of the ________, the airline industry moved into an era of new challenges.

1 million, 267 million

[Economic Developments Prior to Deregulation]

The period from 1938 to 1978 witnessed phenomenal growth in both domestic and international air transportation

– The number of passengers (domestic and international) carried by U.S. airlines increased from a little over _____ in 1938 to almost _____ in 1978

300,000

[Economic Developments Prior to Deregulation]

The air transport industry also became a major employer - total direct airline employment increased from about 13,000 to well over ____.

.

[Economic Developments Prior to Deregulation]

Technological advances combined with economies of scale to produce lower unit costs, helping make it possible to hold prices constant over the 40- year period from 1938 to 1978

$75 million

[Economic Developments Prior to Deregulation]

For the fiscal year 1951, slightly over _____ was paid in subsidies, equal to slightly over 7 percent of total industry revenues

1977

[Economic Developments Prior to Deregulation]

For calendar year _____, almost the same levels of subsidies ($76.7 million) were distributed, representing only 0.3 percent of total industry revenues

Domestic trunk routes and international services did not receive subsidies as they were profitable already

8 local-service

3 all-cargo companies

10 charter airlines

[Economic Developments Prior to Deregulation]

New categories of carriers, as well as new carriers,

were licensed:

8 local-service

Small regional airlines that fly short routes connecting small towns to major cities.

3 all-cargo companies

Airlines that carry goods and freight only, with no passenger service.

10 charter airlines

Airlines that fly on-demand without fixed schedules; usually for groups, tours, or special trips.

Constitution

[Federal Legislation and the Airlines]

The authority of the federal government to regulate interstate and overseas aviation and air transportation derives from the ____.

To stabilize the industry

To improve air safety

To reduce cash subsidies

[Federal Legislation and the Airlines]

Reasons for regulation the industry included:

To stabilize the industry

[Federal Legislation and the Airlines]

The air transportation industry is a public utility that is important to the commercial and social welfare of the nation

(To stabilize the industry:) fierce competition

[Federal Legislation and the Airlines]

Air transportation’s early years were characterized by fierce competition among numerous budding carriers, fluctuating prices, unreliable service, and high turnover among carriers

To improve air safety

[Federal Legislation and the Airlines]

The industry was, and still is, largely dependent on government aid to maintain the safe flow of traffic

(To improve air safety:) Economic regulation

______ was intended, in part, to stabilize air transportation so that the carriers would have the financial capacity to pay for whatever was needed to conform with safety regulations pertaining to the design, operation, and maintenance of aircraft

To reduce cash subsidies

[Federal Legislation and the Airlines]

Air carriers had been subsidized through the air mail program since the mid-1920s and it was believed that the subsidies needed could be reduced by stabilizing the industry through economic regulation.

A financially strong and stable airline industry would need smaller subsidies from the federal government

May 1918

[Early Federal Legislation]

In ______, the air mail service was inaugurated on an experimental basis by the Post Office Department and the Army

Contract Air Mail Act

[Early Federal Legislation]

On February 2, 1925, Congress enacted the _______, known as the Kelly Act, which gave birth to the airline industry

Kelly Act

[Early Federal Legislation]

On February 2, 1925, Congress enacted the Contract Air Mail Act, known as the _____, which gave birth to the airline industry

Contract Air Mail Act (Kelly Act)

[Early Federal Legislation]

This law authorized the postmaster general to contract with private individuals or companies engaged in air transportation service for the transportation of air mail

1926

The Kelly Act was amended in _____ to provide higher rates of compensation

The Kelly Act

[Early Federal Legislation]

was amended in 1926 to provide higher rates of compensation