Ganesh Sitaraman

So after the Wright brothers first had their flight at the beginning of the 20th century, the early years of airline flying was really subsidized by the government through the form of the post office. And there were subsidies for airmail. And the purpose of this was to build this industry up.

And so you had government really involved in that as a way to get there to be more airlines flying more routes to more places. And once the initial technology starts taking off and there's a bigger and bigger airline industry, by the 1930s, you get what I would think of as really the first modern era of airline policy. And this is a period of regulated competition.

And so you had government really involved in that as a way to get there to be more airlines flying more routes to more places. And once the initial technology starts taking off and there's a bigger and bigger airline industry, by the 1930s, you get what I would think of as really the first modern era of airline policy. And this is a period of regulated competition.

And so you had government really involved in that as a way to get there to be more airlines flying more routes to more places. And once the initial technology starts taking off and there's a bigger and bigger airline industry, by the 1930s, you get what I would think of as really the first modern era of airline policy. And this is a period of regulated competition.

And Congress created what they called the Civil Aeronautics Board, or CAB, which was a federal agency. And the job of the agency was to make sure that the airline industry was successful enough that the airlines didn't all go bankrupt, but not so successful that just one airline dominated and created a monopoly.

And Congress created what they called the Civil Aeronautics Board, or CAB, which was a federal agency. And the job of the agency was to make sure that the airline industry was successful enough that the airlines didn't all go bankrupt, but not so successful that just one airline dominated and created a monopoly.

And Congress created what they called the Civil Aeronautics Board, or CAB, which was a federal agency. And the job of the agency was to make sure that the airline industry was successful enough that the airlines didn't all go bankrupt, but not so successful that just one airline dominated and created a monopoly.

And the way they did that was that the Civil Aeronautics Board would allocate routes to different airlines, so which cities they could fly between, and it regulated the prices of those flights as well. And this had a really important effect, which is that it ensured that there would be geographic access to flying in lots of different parts of the country.

And the way they did that was that the Civil Aeronautics Board would allocate routes to different airlines, so which cities they could fly between, and it regulated the prices of those flights as well. And this had a really important effect, which is that it ensured that there would be geographic access to flying in lots of different parts of the country.

And the way they did that was that the Civil Aeronautics Board would allocate routes to different airlines, so which cities they could fly between, and it regulated the prices of those flights as well. And this had a really important effect, which is that it ensured that there would be geographic access to flying in lots of different parts of the country.

So places that are smaller cities, more remote, don't have that much volume, it might not be economical to serve them, would still get airline service. And that system worked pretty well, actually, for about 40 years, from 1938 to 1978. We had more people flying, there were big improvements in safety, and we had really big innovations, like the shift to the jet age.

So places that are smaller cities, more remote, don't have that much volume, it might not be economical to serve them, would still get airline service. And that system worked pretty well, actually, for about 40 years, from 1938 to 1978. We had more people flying, there were big improvements in safety, and we had really big innovations, like the shift to the jet age.

So places that are smaller cities, more remote, don't have that much volume, it might not be economical to serve them, would still get airline service. And that system worked pretty well, actually, for about 40 years, from 1938 to 1978. We had more people flying, there were big improvements in safety, and we had really big innovations, like the shift to the jet age.

Prices, interestingly, were also declining over this period. It was a really reliable, stable, workable system. And then in the 70s, you had this really big push for deregulating the industry. And the view was that the Civil Aeronautics Board was kind of like a government-run cartel. And the theory was maybe market competition would be better.

Prices, interestingly, were also declining over this period. It was a really reliable, stable, workable system. And then in the 70s, you had this really big push for deregulating the industry. And the view was that the Civil Aeronautics Board was kind of like a government-run cartel. And the theory was maybe market competition would be better.

Prices, interestingly, were also declining over this period. It was a really reliable, stable, workable system. And then in the 70s, you had this really big push for deregulating the industry. And the view was that the Civil Aeronautics Board was kind of like a government-run cartel. And the theory was maybe market competition would be better.

The pitch was something like, imagine if you had dozens, maybe even hundreds of airlines operating competitively with lower prices, with no losses of service. There'll be no real downsides.

The pitch was something like, imagine if you had dozens, maybe even hundreds of airlines operating competitively with lower prices, with no losses of service. There'll be no real downsides.

The pitch was something like, imagine if you had dozens, maybe even hundreds of airlines operating competitively with lower prices, with no losses of service. There'll be no real downsides.

It's a great pitch. And who wouldn't want to go for that pitch? And in fact, Congress then jumped at the idea and deregulated the industry in 1978. But as we all know, we didn't really end up in that world. What happened instead is that there was this moment of competition that started after deregulation, but then it quickly turned into something that I think of as more like the Hunger Games.