Curious about the Civil Aeronautics Board?
Well, in the early years of aviation, technology advanced quickly. Airplanes were getting bigger, flying faster, and utilizing more advanced packages of avionics.
With aviation constantly changing, it proved difficult for the government to keep up with regulations. After a series of high-profile mishaps, the government decided to intervene in hopes of making the skies safer.
In 1938, the Civil Aeronautics Act was passed which provided a uniform basis of regulation for aviation in the United States. In 1940, it was amended with the creation of two agencies to discharge the mandate, and the Civil Aeronautics Board was born.
The Purpose of the Civil Aeronautics Board
The Civil Aeronautics Board’s (CAB) primary function was to exercise control over the air carrier rates, routes, and mergers.
Since a major factor behind the original act was to increase safety, the CAB was also given the responsibility of performing accident investigations.
After finding out what went wrong, they would report and oversee rulemaking as well. The CAB was “specifically charged with the promotion, encouragement, and development of civil aeronautics” (Lawrence, 2015).
The board was able to perform in these functions due to it being independent with a direct reporting line to the president.
Civil Aeronautics Board and Economic Regulation
Since the CAB was tasked with economic regulation, they had complete control over the rates, routes, and mergers. The power of the CAB allowed them to control the entry and exit into the air carrier market.
They were able to do this by providing routes to specific carriers, which would hold on to these routes.
New or smaller carriers could not use these routes for business, but if allowed by the board would be able to supply passengers to the original carriers through feeder lines as if they did not compete.
The board would also not allow the carriers to drop a line but would order a carrier to merge with another if it were unable to perform its contract.
Lastly, the board would set rates that would not provide much profit to the carriers. This was due to the perception of air travel as a public utility, much like taking a bus.
The Purpose of the Regulation
The purpose of the regulation was to provide stability to an everchanging new market.
Commercial aviation up to this point had gone through ups and downs and the public and government alike did not fully trust it yet.
With the problems of safety and the precedent of how the railroad industry took advantage, the government thought it best to regulate the aviation industry.
This was to bring down the prices to help the average American. It also sought to prevent monopolies from forming and companies being created just to go under in a short period of time due to the unpredictability of the market.
The CAB accomplished what it was tasked to do
Lawrence, Harry. Aviation and the Role of Government. 3rd ed., Kendall Hunt Publishing, 2015.