AIRLINE DEREGULATION AND SERVICE TO SMALL COMMUNITIES

Although the Airline Deregulation Act of 1978 was heralded at its introduction as a positive step, there were fears that small communities would likely be abandoned by local-service and trunk carriers in preference for denser, more profitable routes. To ensure adequate service to low-density markets, a rather extensive set of regulations was worked out under the essential air service clause of the Act, which granted direct subsidy (through 1988) to commuters to serve inherently uneconomical routes. Thus, commuters who provide a majority of the service to low-density markets were actually more regulated after deregulation than before. Statistics gathered over the three years after deregulation show that the initial concerns over small-community service were by and large unfounded. In fact, service to the low-density market has increased and in many cases has improved as commuters enter new markets or replace markets previously served by locals, which continues a trend that has been established long before formal deregulation took place. Thus, commuters have been assuming the roles of the locals in the 1970s, in much the same way as the locals relieved the trunks of many of their thin-density routes in the late 1950s and early 1960s. Although there are temporary disruptions of service to selective, medium-sized communities during the transition, the process is expected to work in the long run as more newly designed flight equipment suitable for the commuter markets is further developed. Such calculated optimism is obviously predicated on the satisfactory resolution of congestion, safety, and energy problems, barring major disruption of the economy. (Author)