through the Postal Service, when in 1926 the Postmaster General began giving airlines permission to fly certain

routes based on mail delivery needs—and the airlines took some passengers along for the ride. In 1934, the

antitrust authorities charged the Postmaster General with colluding with the major airlines of that day to monopolize

the nation’s airways. In 1938, the U.S. government created the Civil Aeronautics Board (CAB) to regulate airfares

and routes instead. For 40 years, from 1938 to 1978, the CAB approved all fares, controlled all entry and exit, and

specified which airlines could fly which routes. There was zero entry of new airlines on the main routes across the

country for 40 years, because the CAB did not think it was necessary.

In 1978, the Airline Deregulation Act took the government out of the business of determining airfares and

schedules. The new law shook up the industry. Famous old airlines like Pan American, Eastern, and Braniff went
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