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Kennedy Pushed Airline Deregulation, Changed U.S. Air Travel

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Deregulating the airline industry was a major legislative achievement for Sen. Edward M. Kennedy, who pushed the issue even though he didn’t have jurisdiction over aviation and used his substantial charm and persuasiveness to change the way America travels.
In the early 1970s, Sen. Kennedy held extensive hearings as chairman of the Subcommittee on Administrative Practice and Procedure, pushing deregulation as a way to increase competition and bring affordable air travel to millions of Americans. At the time, the Civil Aeronautics Board, a government agency, set airline fares and routes, limiting competition and guaranteeing airlines’ profits. The hearings drew media attention and raised the profile of what had been a largely academic issue to major pro-consumer status.
Two aides, Phil Bakes and Stephen Breyer–who later became a Supreme Court justice– convinced Sen. Kennedy to lead the deregulation charge, even over objections from the labor unions that supported the Massachusetts senator. Deregulation appealed to conservatives who hated government intervention in business and to consumer groups who thought air travel should be more affordable. But the issue wasn’t a natural one for Sen. Kennedy. Yet he saw it, in part, as a broad issue that could give him more clout for presidential runs in 1976 and 1980, according to Thomas Petzinger Jr.’s definitive account of that era in aviation, “Hard Landing.’’
Sen. Howard Cannon of Nevada, the chairman of the Senate aviation subcommittee, supported the CAB and airline industry against deregulation, but was eventually persuaded to switch views in large measure by Sen. Kennedy. The Kennedy-Cannon airline deregulation bill was signed by President Carter in 1978.
“I don’t think airline deregulation had any chance around that period unless he took leadership as he did,” said Mr. Bakes in an interview today. “He took a lot of flack and was way out in front of it.”
In many ways, airline deregulation showed the essential strength of Sen. Kennedy as one of Washington’s most effective legislators. “That legislation from beginning to end and how it changed the industry and changed consumers – that was classic Ted Kennedy,’’ said Mr. Bakes, who had a long career at airline and travel companies and now runs a private equity firm in Miami.
“There was no support for it early on,” he added. “There was no constituency for it. And he took it from scratch and made it legislative reality, using his smarts, his charm, his legislative instincts, his ability to share credit and his real desire to get stuff done.’’
Later when the industry was suffering turmoil of airline bankruptcies and shutdowns in the early 1990s, Sen. Kennedy expressed some reservations about the outcome. “A lot of people didn’t foresee how turbulent that industry would be when cut loose,’’ Mr. Bakes said.
Airline deregulation has created jobs and careers for many at surviving and start-up airlines, and led to huge turmoil and losses for others when employers folded or went bankrupt. The clear beneficiary has been consumers, who find a wealth of flight choices at far lower prices.
The average price to fly one mile domestically is less than half what it was in 1978 after adjusting for inflation, according to the Air Transport Association, and the number of people who board airplanes has tripled since deregulation.

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