Intrastate air carriers in California and Texas have succeeded in earning profits and providing a high level of service while keeping fares well below those charged by interstate air carriers. The three carriers analyzed in this report are not subject to regulation by the Civil Aeronautics Board (CAB), which controls both rates and routes of the trunk and local interstate air carriers. The different regulatory environments impact on the performance of the aviation system. Sixty interstate markets are identified with potential for profitable operation at high levels of service at lower air fares, and regulatory requirements to allow such service to develop can be identified. (Author)


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