Low Cost Airlines.

Essay by deaUniversity, Master'sB, April 2003

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Tourism in all cases plays a big part in the Airline Industry. For numerous years tourism has been one of the largest and fastest growing industries in the world. Positively there has also been an "impressive growth in air passenger and cargo traffic in the last decade in merit to tourism and business trips. The Airline Industry is "an extraordinary undertaking, with contrasts and contradictions unlike those of any other transport mode." ( McConville, J.1997) Hanlon (1999) has concluded that the air transport now attracts about 1.5 billion passengers a year and employs approximately 1.7 million people. Just like any other transportation activities being operated all around the world, airline services have all the characteristics of services that have to be distinguished from goods. At the present time, travelling by air is one of fastest means of transport. Air transport creates both time and place utilities. "Place utility is created by moving goods and people from the places where they are to where they need to be moved.

Time utility is created when goods and people arrive in time" (Dipendra Sinha, 2001)

Until 1978 the federal government through the CAB (Civil Aeronautics Board), and the ATC (Air Traffic Conference), a non-governmental airline group, controlled all U.S airline transportation. Due to this highly regulated structure, there was little or no competition among commercial airlines. The Civil Aeronautics Board restricted the number of airlines that were allowed to fly certain routes; this was approved for all airlines. Meanwhile the Air Traffic Conference controlled inter-airline issues as well as how travel agencies could conduct business in many regards.

This all changed in 1978 when President Carter signed the Airline Deregulation Act. Deregulation allowed airlines the opportunity to govern all aspects of their commercial dealings. In other words, Deregulation in air transport means, in...