The Jet Age (1958 - Today)

Survival of the Fittest

I'll Cut Fares Poster
National Air and Space Museum Archives

Deregulation gave airlines the freedom to compete, but they were now also free to fail-and many did.

For two years after deregula-tion, airlines enjoyed widespread success. But when recession hit in the early 1980s, compounded by an air traffic controllers strike in 1981, the industry began to suffer losses.

Many airlines had over-expanded and found themselves desperately fighting for a share of a decreasing market. Large, well-managed, well-financed airlines, such as American, United, and Delta, weathered the storm during the 1980s. But Braniff, Eastern, and many others could not and were forced into bankruptcy and extinction.

 

Cost-Cutting

Struggling to survive, airlines cut wages and benefits, but this strategy resulted in strikes and lower productivity. Operations were streamlined and thousands of employees laid off. Some feared these efforts would compromise safety, especially if necessary maintenance was deferred to save money, but these fears proved groundless.

Air Cal 737
National Air and Space Museum Archives

Merger mania swept through the industry. By the late 1980s, such old names as National, Western, Piedmont, Ozark, Pacific Southwest, and Air Cal were gone. So were most of the new airlines, including PeoplExpress and New York Air.

Pan Am Airbus A310
National Air and Space Museum Archives

The Demise of Pan American

Pan Am's level of service faltered in the 1970s, and the airline began to lose passengers. To gain a domestic network, it bought National Airlines in 1980, but the merger proved costly. The airline began selling its assets, including its lucrative Pacific routes and the famous Pan Am Building in New York.

The bombing of Pan Am Flight 103 over Lockerbie, Scotland, in 1988 dealt a further blow. America's leading international carrier since 1928, Pan American ceased flying in December 1991.

Southwest Maryland One
Southwest Airlines

Southwest Airlines

Southwest began as a small carrier flying between Houston and Dallas. Under Herb Kelleher's innovative management, it quickly grew into one of America's largest, most efficient, and most profitable airlines.

Emphasizing "no frills" cabin service, and using only Boeing 737s to minimize costs, Southwest pioneered direct service between underserved downtown airports in large metropolitan areas and smaller cities. To sidestep competition, it moved into satellite airports of major cities. Southwest became a model for a new generation of airlines.

"We never tried to be like other airlines."

-Herb Kelleher, founder and chairman of Southwest Airlines

Boarding Passes
Smithsonian Institution, National Air and Space Museum

Boarding Passes

One way Southwest cut costs was by issuing reusable plastic boarding passes and eliminating assigned seating. The passes were sequentially numbered; passengers boarded in groups in the order in which they checked in. This encouraged early arrivals and speeded up seating, thus allowing Southwest to return an aircraft to service quickly.
Gift of Southwest Airlines