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
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
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
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.