Dissolved by Airline Deregulation Act of 1978. How did deregulation affect the airline industry? Airlines were free to move operations towards more profitable markets and routes and pull out of less profitable markets/routes. some experienced loss of air carrier services others experienced massive expansion.

The Airline Deregulation Act of 1978 fundamentally shifted the industry from a government-controlled utility to a competitive free-market system. Before this, the Civil Aeronautics Board (CAB) controlled all routes, schedules, and—most importantly—ticket prices, ensuring airlines remained profitable but making air travel a luxury reserved for the wealthy. Post-deregulation, the industry saw the rapid rise of the Hub-and-Spoke model, which allowed airlines to operate more efficiently by funneling passengers through central airports. This competition led to the birth of Low-Cost Carriers (LCCs) like Southwest, which pioneered no-frills service and dramatically lowered fares. While this made flying accessible to the general public, it also led to increased market volatility, numerous airline bankruptcies, and a shift toward "unbundled" pricing (fees for bags, seats, etc.) that characterizes 2026 travel. In academic terms, deregulation is studied as a classic example of how removing price floors and entry barriers can lead to lower consumer costs but also result in a more consolidated industry dominated by a few major players.