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Antitrust Regulation

Flying 20/20

Frank Lorenzo, head of Texas International Airlines:

[I]f the Aviation Act of 1975[, which deregulated the airlines,] goes into effect, we will, over a period of years, end up with a couple of very large airlines. There will be many small airlines that will start up here and there, but they will never amount to a very significant amount of the transportation market. The smaller certificated airlines like Texas International[, which was acquired in 1982 by Continental Airlines, which itself merged with United in 2010,] will shortly become history. The operating and financial advantages will go to the large carriers with substantial resources, and to very small carriers that temporarily have lower labor costs, primarily because they are non-unionized.

Quoted in Richard H.K. Vietor, Contrived Competition: Regulation and Deregulation in America 54 (1994).

In 1978, when Congress deregulated the airline industry, there were 10 airlines that provided scheduled national and international service, and those 10 accounted for 90 percent of the domestic marketplace. Today, [in 2016,] there are four major airlines and a few smaller ones providing comparable service, and the four major airlines provide 80 percent of U.S. domestic flights.

Paula W. Render, The Airlines Industry, Concentration and Allegations of Collusion, Competition Policy International (June 14, 2016).