It was the summer of 1977, and Bob Crandall was disgusted. Congress was ready to deregulate the airline business, and the American Airlines executive, who would go on to run the giant carrier for 18 years, griped aloud that Uncle Sam was going "to wreck this industry."
Deregulation happened anyway, when President Carter signed it into law the following year. And now Crandall admits: "I was wrong."
Once free of government shackles, Crandall introduced some of the most important innovations in airline history, including "supersaver fares" and frequent-flier mileage awards. But because deregulation also wreaked such financial havoc on American and every other airline, it prompted him to fight some of the ugliest labor battles in airline history.
Which is why Crandall epitomizes the wild ride the airlines have taken since they flew into deregulated skies. It's been a ride of monumental twists and turns, most of them never envisioned by the legislators and regulators who set it in motion, and who forever changed how tens of millions of Americans would travel.
And now, with this year's 20th anniversary of deregulation, Washington is threatening to change the rules again, even though the airline business has never been healthier. Politicians, upstart rivals, business travelers and even the architect of airline deregulation--an economist named Alfred Kahn--are complaining that the airlines wield too much power and are price-gouging the public.
"There are serious, out-of-control situations out there with pricing," said Kevin Mitchell, chairman of the Business Travel Coalition, an advocacy group. "And the airlines are in a complete state of denial that there is a problem."
He and other critics also contend that single airlines dominate too many big-city airports, which helps keep fares high. Many smaller airports, meanwhile, are getting less airline service than they had before deregulation, some U.S. officials say.
As a result, legislation to re-regulate the industry is pending. And once again, Crandall and other airline chieftains warn that U.S. officials will wreck the industry if they meddle too much. "It is very frustrating," Crandall said shortly before he retired in May. "Our competition isn't predatory. It's vigorous."
Deregulation Seen as Improvement
Overall, though, nearly everyone agrees that deregulation has dramatically changed the lives of countless consumers for the better.
