Civil Aeronautics Board CAB

As commercial aviation grew in the 1930s, the Civil Aeronautics Act, signed on June 23, 1938, created a Civil Aeronautics Authority to regulate both the economics and safety of air travel. A 1940 reorganization split it in two: the Civil Aeronautics Administration, which ran air traffic control and later became part of the Federal Aviation Administration, and the five-member Civil Aeronautics Board, which handled economic regulation and investigated accidents.

For four decades the CAB decided which airlines could fly which routes and approved the fares they charged, generally keeping prices high and limiting competition so that established carriers could earn steady profits and serve smaller cities. No new major interstate airline was certified for decades. Airlines competed instead on service, with spacious seats and elaborate meals, while flying remained too expensive for many Americans. The CAB also investigated air crashes until that job moved to the new National Transportation Safety Board in 1967.

In the 1970s, low fares on unregulated intrastate airlines in California and Texas, congressional hearings, and an economist chair who promoted competition helped build bipartisan support for change. The Airline Deregulation Act, signed on October 24, 1978, phased out federal control of fares and routes and scheduled the board's closure, and the CAB shut down at the end of 1984, with remaining functions moving to the Transportation Department. Supporters of deregulation point to much lower real fares and a large increase in air travel, while critics cite airline bankruptcies, crowded planes, and reduced service to small communities.