Lower Airline Costs per Passenger Are Possible in the United States and Could Result in Lower Fares

CED-77-34: Published: Feb 18, 1977. Publicly Released: Feb 18, 1977.

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At the request of the Chairman of the Senate Subcommittee on Administrative Practice and Procedure, a study, entitled "Airline Regulation and Market Performance", by Theodore E. Keeler, was evaluated, extended, and updated. The study compared airline fares regulated by the Civil Aeronautics Board (CAB) in 1969 with estimates of fares the airline industry might have charged had it not been regulated. The validity of the study results was evaluated, and annual national estimates were made for the years 1969 through 1974.

Airlines in the United States regulated by the CAB could have operated at a lower total cost per passenger than they did from 1969 to 1974, and passenger fares could have been lower as a result. Travelers could have saved over a billion dollars annually if regulated airlines had operated with characteristics of less regulated airlines.

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