ABSTRACT
The evolution of aviation policy and regulation is characterized by a continuous ebb and fl ow of federal control punctuated by more signifi cant and dramatic changes due to various crises and disasters. The following chapter traces this evolution from the industry’s earliest days when, in an effort to foster its own development, industry pioneers reached out to the federal government for support and regulatory guidance. In a cycle of fi ts and starts that would last for decades, the federal government moved from a reluctant supporter and tentative regulator to create in 1938 the most pervasive regulatory environment in transportation. Federal regulations governed virtually all facets of the industry, including the provision of transportation services. Despite the industry’s impressive growth and development under government control, some notable defi ciencies eventually attracted the attention of political leaders who turned the calls of free-market economists into watershed regulatory reform in 1978. The debate continues today whether the industry owes its impressive growth in spite of or because of deregulation. More important, observers wonder if a return to a more extensive regulatory regime, harkening back to the three decades following WWII would help the industry handle its cyclical nature where periods of exceptional profi ts and growth are usually followed by diffi cult downturns.
