Unfortunately for the airline industry, fuel costs, economic recession, and wanton overexpansion in the wake of deregulation began to have serious negative consequences. The airlines recorded a net operating loss of $421 million as early as 1981, when the number of passengers fell to 286 million. The problems were worsened by the nationwide strike of the Professional Air Traffic Controllers Organization (PATCO) in 1981. One airline, Braniff, collapsed completely in 1982 (although the airline operated from 1984 under new ownership before entering bankruptcy once again in 1989). Other airlines continued to expand in the face of economic problems, putting them at great risk.
Analysts continue to debate the long-term effects of deregulation. The climate in the post-deregulation era was extremely unstable as illustrated by the fates of both Continental and Eastern Airlines, two major domestic carriers. Both airlines suffered through severe financial crises, which were made worse by mismanagement and bad relationships with the labor unions. Both ended up bankrupt by 1989. The most important international carrier for the United States, Pan American, suffered the same fate. Without the cover of regulation on international flights, Pan Am suddenly had to compete with new entrants such as Laker and People's Express. By the end of 1991, after a dramatic downfall through the 1980s, Pan Am was history. The number of major carriers in the United States fell from six in 1978—United, American, Delta, Eastern, TWA, and Pan Am—to three by 1991—United, American, and Delta. Ultimately, most of the big airlines suffered some sort of loss in the 1980s—either facing complete bankruptcy or with less financial growth than hoped.
CG why dont you add something to the thread besides insults?
