Comments on the Study:

"Consequences of Deregulation of the Scheduled Air Transportation Industry"

CED-77-38: Published: Feb 25, 1977. Publicly Released: Feb 25, 1977.

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The Air Transport Association of America's (ATA) study "Consequences of Deregulation of the Scheduled Air Transportation Industry" was reviewed. The ATA study evaluated the consequences of deregulating the 3,087 nonstop routes served by U.S. trunk and local service airlines in 1973 and concluded that air services available to the public could be markedly reduced under a deregulated system.

The study's methods and assumptions are often faulty, and the conclusions drawn from the study should not be relied on as an estimate of the consequences of deregulation. No evidence supports ATA assumptions that subsidies would be discontinued under a deregulated system. The stability of air service on most of the 372 routes identified as unprofitable is not contingent on airline regulation. Many of the routes listed as unprofitable are profitable because they receive substantial air service from more than one unsubsidized airline. ATA flight reduction estimates are overstated because, in some cases, they do not adequately provide for passengers of discontinued flights being diverted to other flights. The Association did not consider that many flights would be retained because they: (1) provide passengers and/or make aircraft available for other routes; or (2) receive Federal subsidy.

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