A Tribute to Alfred E. Kahn

Alfred E. Kahn, who died Monday at age 93, was the academic whose ideas laid the groundwork for airline deregulation.  As an economist he saw advantages for practically everyone in having the government step aside and allow the airlines to fly where they wanted to and to offer fares that they themselves set.

 

On the whole, deregulation has been a good move, certainly for travelers who benefit today from low fares and from the development of airlines such as Southwest, AirTran, Ryanair, EasyJet, to name a few. International deregulation also gave the major airlines the chance to become network carriers, taking over from the great old pre-deregulation airlines such as Pan American World Airways and Trans World Airlines.  For the airlines and the people who work for them, the last three decades of deregulation have brought plenty of misery, financial losses and disruptions. They have a multitude of stories to tell and are likely to disagree with this assessment. 

 

Kahn served as chairman of the Civil Aeronautics Board in 1977-1978 just prior to the passage of the deregulation act by Congress in the fall, 1978. He put the pieces together that provided the rare sight of a government agency in retreat.  And it was a long retreat with the airline industry struggling through a recession, the change of administrations from Carter to Reagan, and the huge, rippling changes that deregulation brought. The CAB finally lost its authority of domestic routes and fares in 1983 and closed the next year, ending 46 years as a regulatory body. I think everyone was glad to see it go, except for the lawyers and influence peddlers who had made a living out of persuading the CAB to act one way or another in favor of one group or another.   

 

In the role of CAB chairman Kahn was succeeded by Marvin Cohen who shared Kahn’s principles and carried out the congressional mandate in those early days of deregulation. And those days were as nutty as one could possibly imagine. New airlines appeared everywhere, and hundreds have been lost, blown away in the harsh economic winds of high fuel prices, management ineptitude and a new, rough kind of rivalry in the industry In those days Braniff International Airlines was a rising star. It opened market after poorly chosen market, a batch nearly ever week and all across the nation. The airline took a tragic dip into the international market and operated virtually empty Boeing 747s to Korea for a while. Braniff even struck a deal with British Airways and operated Concorde at subsonic speeds across the U.S. It was a heady time, much of it due to Alfred Kahn.

 

For those of us who covered deregulation and its impact, the job was a treat to deal with Kahn even though his tenure at the CAB was short. Through the years, though, he continued as a chief spokesman for deregulation. Beyond this very public role, he was a gentleman, quick as a cat mentally, a wizard with words and a marvel to watch as he laid out his thoughts carefully, an academic and a public servant one could admire.