Summary: An assessment of the changing airline industry was presented along with some observations on the sunset of the Civil Aeronautics Board (CAB). The airline industry is in a state of change due to the greater freedom provided by the Airline Deregulation Act of 1978. It is, however, too early to judge the success or failure of deregulation because it is a gradual process which, under current law, will not be completed until 1985. In the first 2 years after deregulation, the airline industry experienced across-the-board gains as compared with the years before deregulation. The latest status report, which includes 1980 data, presents a sharp contrast. The airline industry, which is sensitive to general economic conditions, was hurt in 1980 by the combined effects of a recession and rising fuel costs. Gains made in the previous 2 years were substantially eroded by 1980 developments. Despite the 1980 decline, the airline industry experienced substantial gains in both revenue- passenger miles and number of passengers since deregulation began. Improved productivity and favorable economic conditions contributed to increased airline profitability. In 1980, the recession and inflation affected the airline industry, severely eroding the productivity gains of the past several years. Statistics also show that, despite deregulation, there has been a steady decline in both the accident and fatal accident rates. In its report to the CAB chairman, GAO concluded that, as the Airline Deregulation Act's sunset provisions became effective, some consumer protections would be lost unless legislative provisions were made for transferring these functions to other agencies. As a result of GAO recommendations, CAB submitted a legislative proposal to Congress providing for the transfer of some statutory functions not specifically addressed by the Airline Deregulation Act. This strategy was adopted because it allows for the continuation of some programs and functions beyond the sunset period.
