The Federal Aviation Act of 1958
By mid-century, air traffic had increased and jet aircraft had been introduced into the civil aviation arena. A series of mid-air collisions underlined the need for more regulation of the aviation industry. Aircraft were not only increasing in numbers, but were now streaking across the skies at much higher speeds. The Federal Aviation Act of 1958 established a new independent body that assumed the roles of the CAA and transferred the rule making authority of the CAB to the newly created Federal Aviation Agency (FAA). In addition, the FAA was given complete control of the common civil-military system of air navigation and ATC. The man who was given the honor of being the first Administrator of the FAA was former Air Force General Elwood Richard “Pete” Quesada. He served as the administrator from 1959–1961. [Figure 1-10]
Department of Transportation (DOT)
On October 15, 1966, Congress established the Department of Transportation (DOT), which was given oversight of the transportation industry within the United States. The result was a combination of both air and surface transportation. Its mission was and is to serve the United States by ensuring a fast, safe, efficient, accessible, and convenient transportation system meeting vital national interests and enhancing the quality of life of the American people, then, now, and into the future. The DOT began operation on April 1, 1967. At this same time, the Federal Aviation Agency was renamed to the Federal Aviation Administration (FAA).
The role of the CAB was assumed by the newly created National Transportation Safety Board (NTSB), which was charged with the investigation of all transportation accidents within the United States.
As aviation continued to grow, the FAA took on additional duties and responsibilities. With the highjacking epidemic of the 1960s, the FAA was responsible for increasing the security duties of aviation both on the ground and in the air. After September 11, 2001, the duties were transferred to a newly created body called the Department of Homeland Security (DHS).
With numerous aircraft flying in and out of larger cities, the FAA began to concentrate on the environmental aspect of aviation by establishing and regulating the noise standards of aircraft. Additionally, in the 1960s and 1970s, the FAA began to regulate high altitude (over 500 feet) kite and balloon flying. In 1970, more duties were assumed by the FAA in the addition of a new federal airport aid program and increased responsibility for airport safety.
By the mid-1970s, the FAA had achieved a semi-automated ATC system based on a marriage of radar and computer technology. By automating certain routine tasks, the system allowed controllers to concentrate more efficiently on the vital task of providing aircraft separation. Data appearing directly on the controllers’ scopes provided the identity, altitude, and groundspeed of aircraft carrying radar beacons. Despite its effectiveness, this system required enhancement to keep pace with the increased air traffic of the late 1970s. The increase was due in part to the competitive environment created by the Airline Deregulation Act of 1978. This law phased out CAB’s economic regulation of the airlines, and CAB ceased to exist at the end of 1984.
To meet the challenge of traffic growth, the FAA unveiled the National Airspace System (NAS) Plan in January 1982. The new plan called for more advanced systems for en route and terminal ATC, modernized flight service stations, and improvements in ground-to-air surveillance and communication.
The Professional Air Traffic Controllers Organization (PATCO) Strike
While preparing the NAS Plan, the FAA faced a strike by key members of its workforce. An earlier period of discord between management and the Professional Air Traffic Controllers Organization (PATCO) culminated in a 1970 “sickout” by 3,000 controllers. Although controllers subsequently gained additional wage and retirement benefits, another period of tension led to an illegal strike in August 1981. The government dismissed over 11,000 strike participants and decertified PATCO. By the spring of 1984, the FAA ended the last of the special restrictions imposed to keep the airspace system operating safely during the strike.
The Airline Deregulation Act of 1978
Until 1978, the CAB regulated many areas of commercial aviation such as fares, routes, and schedules. The Airline Deregulation Act of 1978, however, removed many of these controls, thus changing the face of civil aviation in the United States. After deregulation, unfettered free competition ushered in a new era in passenger air travel.
The CAB had three main functions: to award routes to airlines, to limit the entry of air carriers into new markets, and to regulate fares for passengers. Much of the established practices of commercial passenger travel within the United States went back to the policies of Walter Folger Brown, the United States Postmaster General during the administration of President Herbert Hoover. Brown had changed the mail payments system to encourage the manufacture of passenger aircraft instead of mail-carrying aircraft. His influence was crucial in awarding contracts and helped create four major domestic airlines: United, American, Eastern, and Transcontinental and Western Air (TWA). Similarly, Brown had also helped give Pan American a monopoly on international routes.
The push to deregulate, or at least to reform the existing laws governing passenger carriers, was accelerated by President Jimmy Carter, who appointed economist and former professor Alfred Kahn, a vocal supporter of deregulation, to head the CAB. A second force to deregulate emerged from abroad. In 1977, Freddie Laker, a British entrepreneur who owned Laker Airways, created the Skytrain service, which offered extraordinarily cheap fares for transatlantic flights. Laker’s offerings coincided with a boom in low-cost domestic flights as the CAB eased some limitations on charter flights (i.e., flights offered by companies that do not actually own planes but leased them from the major airlines). The big air carriers responded by proposing their own lower fares. For example, American Airlines, the country’s second largest airline, obtained CAB approval for “SuperSaver” tickets.
All of these events proved to be favorable for large-scale deregulation. In November 1977, Congress formally deregulated air cargo. In late 1978, Congress passed the Airline Deregulation Act of 1978, legislation that had been principally authored by Senators Edward Kennedy and Howard Cannon. [Figure 1-11] There was stiff opposition to the bill—from the major airlines who feared free competition, from labor unions who feared non-union employees, and from safety advocates who feared that safety would be sacrificed. Public support was, however, strong enough to pass the act. The act appeased the major airlines by offering generous subsidies and pleased workers by offering high unemployment benefits if they lost their jobs as a result. The most important effect of the act, whose laws were slowly phased in, was on the passenger market. For the first time in 40 years, airlines could enter the market or (from 1981) expand their routes as they saw fit. Airlines (from 1982) also had full freedom to set their fares. In 1984, the CAB was finally abolished since its primary duty of regulating the airline industry was no longer necessary.