1. Federal Aviation Act of 1958, 72 Stat. 737, as amended by 75 Stat. 467, 76 Stat. 143, 82 Stat. 867, 84 Stat. 921, 49 U.S.C. 1301 (1970). Motor carriers and railroads are subject to the Interstate Commerce Act, 49 U.S.C. 1 et. seq. (1980). In the past decade all these laws have been drastically curtailed, under the concept of “regulatory reform.”

2. 52 Stat. 973(1938).

3. Federal Aviation Act, 72 Stat. 732, 49 U.S.C.A. 1302 (1958).

4. Dempsey, , “The Rise and Fall of the Civil Aeronautics Board”, 11 Transportation Law Journal (1979) pp. 91, 95–108Google Scholar.

5. Id. at 97.

6. 72 Stat. 760., 49 U.S.C. 1374, § 404 (1970).

7. New York-Florida Case, 24 C.A.B. 94 (1956); New York-Florida Renewal Case, 38 C.A.B. 680 (1963); Reheard 39 C.A.B. 108 (1964), C.A.B. Order 24808 (2 March 1967)). See Lowenfeld, A., Aviation Law (1981) 1–161 to 1–184Google Scholar.

8. Jones, W., Regulated Industries (1976) n. 27 at p. 1087Google Scholar.

9. Pan American received most of its domestic authority from its 1979 merger with National Airlines, at that time the smallest of the domestic trunks. Until then, Pan Am was an overseas carrier exclusively: Pan American-National Acquisition Case, C.A.B. Order 78–8–151 (25 August 1978); C.A.B. Orders 79–12–163, 164, 165 (24 October 1979).

10. Jones, W., Regulated Industries (1976) p. 1088. On 1 October 1980, Hughes Air West was absorbed by Republic AirlinesGoogle Scholar.

11. The author wishes to express his appreciation to North Dakota attorney John A. Thelen for research assistance in preparing this section.

12. Fellmeth, R., The Interstate Commerce Omission (1970)Google Scholar.

13. Lowenfeld, A., Aviation Law (1981)at p.4–3Google Scholar.

14. Oversight of Civil Aeronatics Board Practices and Procedures, Hearings before Subcommittee on Administrative Practice and Procedure of Senate Committee on the Judiciary, 94th Cong., 1st Sess. (1975).

15. See Lowenfeld, , op.cit., at p. 5–48 through 5–56 (1981)Google Scholar.

16. Airlines had been regulated in a similar fashion to US public utilities, whereby a partial or complete monopoly is given to a firm in consideration of having its rates, finances and service supervised by the government. Traditionally, governments have no equity in these utilities, such as gas, telephone and electric companies. The major exception is urban mass transit.

17. Dempsey, , The Rise and Fall of the Civil Aeronautics Board, 91 Transportation Law Journal (1980) p. 118Google Scholar.

18. C.A.B. Reg. SPR-149, enacting 14 C.F.R. § 380 (18 August 1978).

19. Senate Subcommittee on Administrative Practice and Procedure of the Judiciary Committee, 94th Cong., 1st Sess., Civil Aeronautics Board Practice and Procedures, 207–208 (1976).

20. See Lowenfeld, , op.cit., at p. 4–5 through 4–7Google Scholar.

21. Aviation Week and Space Technology (6 March 1978), at p. 35.

22. Dempsey, , supra at p. 120. See Miami-Los Angeles Low-Fare Case, C.A.B. Order 78–1–35 (1978)Google Scholar.

23. C.A.B. Order 78–4–121 (1978).

24. See Chicago-Midway Low Fare Route Proceeding, C.A.B. Order 78–7–40 (1978).

25. The Board had a mandate not only to consider the public convenience and necessity but the “promotion, encouragement, and development of civil aeronautics.” Federal Aviation Act, § 102, 72 Stat. 740, 49 U.S.C. 1302 (1970). This consideration had led to the board's protection of the original private companies against competition. The burden was upon the new applicants to show that the public was not adequately served by the old carrier, or that there was enough traffic to support both companies. See Lowenfeld, , op.cit. at p. 4–7 through 4–12Google Scholar.

26. Airline Deregulation Act of 1978, 92 Stat. 1705, Public Law 95–504 (24 October 1978), amending 49 U.S.C. §§ 1301–1551 (1980).

27. Dubuc, , Significant Legislative Developments in the Field of Aviation Law, 45 Journal of Air Law (1979) p. 21Google Scholar.

28. 49 U.S.C. § 1302(a)(1980).

29. Railway Labor Act, 45 U.S.C. § 151 et. seq. (1970). Despite its name, this law also applies to labor relations between U.S. air carriers and their labor unions.

30. 49 U.S.C. § 1551(1980).

31. In the past, the CAB had made it difficult for airlines to exit the market by dropping service to small and medium-sized communities. A certain amount of cross-subsidy resulted from this regulatory behavior. See Cohen, , New Air Service and Deregulation: A Study in Transition, 44 Journal of Air Law & Commerce (1979) pp. 695, 702. The Deregulation Act contains no restrictions against an airline exiting a market, unless it is declared to be “Essential Air Service” under Section 419 of the Act, and thus eligible for subsidy. Most of this service is now performed by commuter airlines, using small planes. 49 U.S.C. § 1389 (1980)Google Scholar.

32. 49 U.S.C. § 1551 (1980).

33. 49 U.S.C. § 1551 (1980).

34. Dubuc, , supra at 27Google Scholar.

35. Quoted in Griffith, Deregulation Act is Impact Analyzed by CAB Staff, Aviation Week and Space Technology, 4 12 1978, at 154Google Scholar.

36. U.S. Constitution, Article II, § 2.

37. See Lowenfeld, , op.cit., 3–120Google Scholar.

38. 49 U.S.C. § 1461(1980).

39. Sims, International Air Transportation: The Effect of the Airline Deregulation Act of 1978 and the Bermuda II Agreement, 10 Tramp. L.J. (1978) pp. 239, 249.

40. 49 U.S.C. § 1371(d)(1)(1980).

41. 49 U.S.C. § 1372(b)(1980).

42. “Closed-door restrictions,” also known as “blind sectors”, refer to segments of a flight over which no local passengers can be carried. Although the Airline Deregulation Act does away with closed-door restrictions on domestic carriers, airlines in international transportation may have restrictions placed in their certificates of authority.

43. Only US citizens or corporations mostly owned by US citizens can receive certificates for air travel within the United States. Even after deregulation, foreigners cannot control US airlines, although two major US railroads are owned by Canadian railways. Foreign air carriers may receive permits to receive and discharge passengers in the United States. See Gertler, , Nationality of Airlines: A Hidden Force in the International Air Regulation Equation, 48 J. Air L. & Comm. (1982) p. 51Google Scholar.

44. The law granted the CAB power to suspend and reject fares, but not to fix rates. The statutory scheme envisioned carrier-made rates, subject to a second look by the CAB. Federal Aviation Act, Sec. 1002(j), 49 U.S.C. 1482 (1980). See also Lowenfeld, , op.cit., pp. 2–198,2–200Google Scholar.

45. Sims, , supra at 254Google Scholar.

46. Cohen, , New Air Service and Deregulation: A Study in Transition, 44 Journal of Air law & Commerce (1979) pp. 695, 702Google Scholar.

47. Deregulation of the airlines has been followed by American legislation substantially liberalizing regulation of surface transportation. See Motor Carrier Act of 1980, P.L. 96–296, amending 49 U.S.C. 10521 (1981), Staggers Rail Act of 1980, P.L. 96–448, 94 Stat. 1895 (1980), Bus Regulatory Reform Act of 1982, P.L. No. 97–261, 96 Stat. 1102 (1982). These are not “sunset” laws, and the Interstate Commerce Commission still has a regulatory role to play in surface transportation. See generally Thoms, , Admin istrative Law: Deregulation and Preemption, 1 UND Law Faculty Journal (1982) 135Google Scholar.

48. Traffic World, 18 August 1980 at p. 105.

49. See Lowenfeld, , op.cit., pp. 4–79 through 4–83Google Scholar.

50. See Gritta, , Bankruptcy Risks Facing the Major U.S. Airlines, 48 J. Air Law (1982) p. 89Google Scholar.

51. Thornton, , The C.A.B. and Its Critics, 43 J. Air Law (1977) pp. 641, 657–58Google Scholar.

52. It is uneconomic for a single passenger to bring a lawsuit against an airline for the typical non-crash-related controversy. For a class action to be brought, members of the class must have the same or virtually identical injury. Since denied boarding and lost luggage claims usually flow from unrelated transactions, courts are reluctant to allow a class action in such cases.

53. Cohen, , supra at p. 701Google Scholar.

54. H. Rept. 98–1025 (14 September 1984).

55. Statement of Senator Mark Andrews at CAB Appropriatures hearing U.S. Senate, 19 March 1984.

56. Remarks of the Hon. Norman Y. Mineta to the International Aviation Club, Washington DC, 17 January 1984.

57. See Schaffer, and Lachter, , “Developments in United States International Air Transportation Policy”, 12 Lawyer of the Americas (1980) p. 585Google Scholar.

58. See Lowenfeld, , op.cit., pp. 2–7Google Scholar.

59. Ibid. at pp. 4–73. The Civil Aeronautics Board, the Interstate Commerce Commission, and the Federal Maritime Commission are known as “independent regulatory agencies” – created by Congress, whose members sit for a fixed term. The Department of Transportation is a “cabinet-level agency”, where its Secretary is part of the President's cabinet, serves at his pleasure, and had little political independence from the current Administration.

60. See generally, Haanappel, , “Bilateral Air Transport Agreements – 1913 – 1980”, 5 International Trade Law Journal (1980) p. 241Google Scholar.

61. Bermuda Agreement on Air Transport, 11 February 1946, United States – United Kingdom, 60 Stat. 1499, T.I.A.S. No. 507.

62. Bermuda II, 23 July 1977, United States – United Kingdom, 28 U.S.T. 5367, T.I.A.S. No. 8641. See Schaffer, and Lachter, , Developments in United States International Air Transportation Policy, 12 Lawyer of the Americas (1980) pp. 585, 587Google Scholar.

63. E.g., Protocol Amending the Air Transport Agreement of 1957, as amended, 31 March 1978, United States – Netherlands, T.I.A.S. No. 1507, Agreement Amending the Air Transport Services Agreement of 1946, as amended, 12–14 December 1978, United States – Belgium, T.I.A.S. No. 9207. See also Lowenfeld, , op.cit., pp. 5–25 through 5–34Google Scholar.

64. Quoted in Ott, , “U.S. Stiffens Negotiating Stance,” Aviation Week and Space Technology, 9 04 1984 at p. 28Google Scholar.

65. Pub. L. No. 96–192, sec. 17, 94 Stat. 42 (1980).

66. Schaffer, and Lachter, , “Developments in United States International Air Transportation Policy”, 12 Lawyer of the Americas (1980) pp. 585, 590Google Scholar.

67. Federal Aviation Act, sec. 1002(j), 49 U.S.C. 1482 (1980).

68. C.A.B. Order 78–6–78, 9 June 1978.

69. See Lowenfeld, , op.cit., pp. 5–71 through 5–97Google Scholar.

70. C.A.B. Order 80–4–113,15 April 1980.

71. Schaffer, and Lachter, , op.cit., 12 Lawyer of the Americas (1980) pp. 585, 594Google Scholar.

72. See, e.g., Dold, , “The Competitive Regime in International Air Transportation: History and Prospect” 5 Air Law (1980) p. 139Google Scholar, Thomka-Gadzik, , “Multilateralism in Civil Aviation”, 4 Air Law (1979) p. 130Google Scholar.

73. Lowenfeld, , op.cit., pp. 5–109Google Scholar.

74. This discussion of the new Canadian air policy is adapted from Thoms, , Air Deregulation Comes to Canada, 6 Canadian Law Newsletter (07 1984) pp. 8–10Google Scholar.

75. Contribution of the European Communities to the Development of Air Transport Services, Memorandum of the Commission, adopted on 4 July 1979, Com. (79) 311, reprinted in Bulletin of the European Communities, Supplement 5/79; Decision of the EC CouncilofMinisters of 20 December 1979 setting up a consultation Procedure on relations between Member States and Third Countries in the field of air transport and on action relating to such matters within international organizations. EC OJ No. L 18/24, 24 January 1980.

76. Lowenfeld, , op.cit., pp. 5–114. Professor Lowenfeld also points out that a two-tier market exists in Europe, one operated by the scheduled carriers under bilateral agreement, and another between Northern Europe and Mediterranean resorts, operated by charter airlines. Id.Google Scholar

77. Civil Aviation Policy (Communication and Proposals by the Commission to the Council), Com. (84) 72 Final, para. 43 (15 March 1984).

78. See Lowenfeld, , op.cit., 4–83 through 4–86Google Scholar.

79. The European nations maintain much higher frequency of service on the passenger-oriented national railroads than does the rail system of the United States. Most European trips within one country are made by rail, while air travel is fundamentally traffic that crosses national boundaries. In the United States the railroads are privately owned, and mostly operated for freight. Passenger trains are operated by a government-sponsored corporation called Amtrak (Rail Passenger Service Act of 1970, P.L. 91–518, 84 Stat. 1327, 45 U.S.C. 501 (1980)) or by local commuter authorities. Most American air traffic is domestic, and the airlines carry more passengers than the intercity bus companies and Amtrak combined. See Lowenfeld, , op.cit., (Supplement) at 1260 (1981)Google Scholar.

80. Schaffer, Gloria, Serenade to Sunset (1984)Google Scholar.