Up and Coming: Low-cost air travel pioneer dies

Tuesday, December 28, 2010

Low-cost air travel pioneer dies

Alfred E Kahn paved the way for the low-cost airline model as pioneered by the US's Jetblue

The American economist credited with bringing about lower fares for airline passengers has died at the age of 93.

Alfred E Kahn was best known as the architect of airline deregulation in the United States, a process that started during President Carter's administration in the late 1970s.

However, it also led to financial problems for some established airlines.

Alfred E Kahn was for many years a professor of economics at Cornell University in New York State.

He believed passionately that the managements of public utilities should make their own decisions about prices and levels of services free from interference by governments and bureaucrats.

He was instrumental in garnering the support needed to push through the US Airline Deregulation act of 1978 during the Carter administration.

The Act stripped away an elaborate 40-year-old system of controls that meant all decisions by airlines on ticket prices and routes were subject to approval by a government agency.

Deregulation rapidly led to massive cuts in air fares, along with wholesale and sometimes painful reorganisation of the US airline industry.

Some famous names in American aviation, such as Pan Am, disappeared entirely as they failed to adapt to the new era.

Others, such as United and American, went through repeated bankruptcies as they struggled to bring costs down. Meanwhile, salaries and benefits for staff at established carriers were seriously eroded.

Professor Kahn is widely seen as the architect of low cost airlines. His reforms made it possible for budget airlines in the US, such as Southwest and Jetblue, to offer no-frills service at massively lower prices than traditional carriers.

This model has been widely copied elsewhere in the world, with the new generation no-frills low-price carriers now entrenched in Europe and Asia, as well as the US.

This article is from the BBC News website. � British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.