The Airline Deregulation Act was signed into law in 1978 and largely eliminated the economic regulation of the domestic U.S. airline industry. A 1969 article in Reason magazine by Reason Foundation’s Robert Poole detailed the strict regulations put forth by the Civil Aeronautics Board, which had established and enforced a “huge cartel” in air travel to the detriment of consumers prior to 1978. Since 1978, thanks to the additional competition enabled by deregulation, average inflation-adjusted airfares have fallen by more than 40%.
However, regulatory barriers to international airline competition remain in place, most notably the prohibition on cabotage—the service of
