Initial effects of US De-regulation

• Passenger Traffic
  • Approx. 10% average annual increase
  • No. of First time flyers increased from 49%in 1971 to 72% in 1987
• Airlines
  • Uncomfortable for many existing airlines
  • Forced to expand rapidly & respond to tactics of new entrants
  • Forced to lower costs and increase productivity to cope
  • Profits plummeted, and many went bankrupt
  • Many responded by lowering service standards to reduce costs
• Airport Congestion
  • Severe congestion during peak-times
  • Airports tried to cope with existing infrastructure

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