Survival, profits and resource utilization

Abstract

The intertwining of CAB regulation and airline operations makes it impossible to use operating and financial data from the regulated airlines to determine the extent to which regulation affects costs. The essentially nonregulated, but otherwise, similar, intrastate airlines operating wholly within California (and thus beyond the CAB's jurisdiction) provide a benchmark with which to compare the performance of regulated airlines and thus measure the effects of CAB regulation. This comparison, shows that the nonregulated environment within California has been a much sterner disciplinarian of airline operations than the regulated environment of interstate air transportation. Issues of survival, profits, efficiency, fares, and the impacts of CAB regulation on costs are examined.