The fear was that the then very rich and powerful railroads would smother the competition from the fledgling airline industry, just as decades before in the Panama Canal Act the railroads were forbidden to have in interest in competing water carriers, for fear that the railroads would start cut throat competition on ...

The push for the Airline Deregulation Act of 1978 was driven by the belief that government control was stifling competition and keeping air travel artificially expensive for the average consumer. Prior to 1978, the Civil Aeronautics Board (CAB) controlled exactly which routes airlines could fly and set fixed prices for tickets, effectively preventing new airlines from entering the market. Critics, led by economists like Alfred Kahn and supported by President Jimmy Carter, argued that "market forces" would be far more efficient. They pointed to unregulated intrastate airlines (like Southwest in Texas) that were offering much lower fares than federally regulated ones. The goal was to break up the "country club" atmosphere of the industry, encourage the creation of new, low-cost carriers, and make flying a mass-market commodity rather than a luxury for the elite. This move ultimately led to the "hub-and-spoke" system and drastically lower real-term airfares that we see today in 2026.