In the United States, a legacy carrier is an airline that was once economically regulated by the now defunct Civil Aeronautics Board (CAB) during the period of airline regulation 1938–1978 or can trace its origin to one that did. The CAB was a federal agency that tightly controlled almost all US commercial air transport during that period. As related below, many features associated with the legacy airline business model were actually developed not during the regulated era, but instead in the first decade or so of the deregulated era following it, as legacy carriers adapted to an unfamiliar competitive environment. While the term "legacy carrier" is most often used in a US context, it is possible to speak of legacy carriers elsewhere, since tight airline regulation was once the global norm and following US airline deregulation, many other countries went through some kind of airline deregulation. Non-US carriers with origins that precede liberalization can be viewed as legacy carriers. For instance, in Europe, flag carriers such as British Airways, Air France, KLM, Iberia, and Lufthansa, (with origins well before the liberalized era) can be viewed as legacy carriers in contrast to airlines such as Ryanair, EasyJet and Wizz Air.
Surviving legacy carriers There are currently four surviving legacy carriers, with Alaska Airlines and Hawaiian Airlines having completed their merger on September 18, 2024:
Alaska Airlines/Hawaiian Airlines American Airlines Delta Air Lines United Airlines Each of the above was founded by 1932 (94 years ago), although typically under a different name than they are currently known under. Legacy carriers do not include:
Any airline founded after the regulated era. A few prominent examples include America West Airlines, ValuJet, Virgin America, JetBlue, and Spirit Airlines. Any US airline with a pre-1979 origin that was not regulated by the CAB. In the US, there are two such US airlines still in operation: Southwest Airlines, which started operations in 1971 but was never subject to CAB regulation because it was an intrastate airline and thus was subject to less regulation; and SkyWest Airlines, founded in 1972 as a commuter carrier, thus not being subject to CAB regulation. As explained below, the term "intrastate airline" meant more than simply operating within a single state. For example, Hawaiian Airlines operated only within the state of Hawaii prior to 1981, yet was CAB-regulated.
Significance Prior to 1979, the CAB regulated its carriers as a cartel, strictly limiting competition between them and setting uniform fare levels nationally. Such fare levels were above those that would prevail in a free market, as proven by comparison with fares charged by less-regulated intrastate carriers during the regulated era. CAB carriers thus entered deregulation with a legacy of high costs. The history of the legacy carriers following deregulation is in significant part the story of their struggle with this legacy, their efforts to cut costs and to compensate for such costs through various business model adaptations. One indication of this long-term struggle is that of the surviving US legacy carriers, all have gone through bankruptcy since 1978 with the exception of Alaska Airlines.
Context A complete list of CAB-regulated scheduled airlines in 1978, the last year of the regulated era, is available in the Civil Aeronautics Board article. Those are the legacy carriers as of the start of the deregulated era. For completeness, there is also a list of charter carriers (the CAB called them supplemental air carriers) and all-cargo carriers (such as Flying Tiger Lines) from the same year. Whether CAB-era supplemental or all-cargo airlines count as legacy carriers is largely moot since none survive and they had little impact on the passenger industry after deregulation. Of the 1978 scheduled passenger CAB carriers, as shown in the table referenced above, 23 flew jets:
Ten domestic trunk carriers (American, Braniff, Continental, Delta, Eastern, National, Northwest, TWA, United, Western) plus Pan Am Eight local service carriers (Allegheny, Frontier, Hughes Airwest, North Central, Ozark, Piedmont, Southern, Texas International) The two Hawaiian carriers: Hawaiian and Aloha Two of the Alaskan carriers: Alaska and Wien Air Alaska
Airlines not regulated by the CAB
During the 1938–1978 regulated era, intrastate airlines were those that minimized participation in interstate commerce, most obviously by operating only within a single state, but also by measures such as not selling joint tickets with other carriers for itineraries that crossed state lines, not selling tickets in other states and so forth. By doing so, they sidestepped regulation by the CAB and were able to be economically regulated instead by an agency of their state, most of which were more flexible than the CAB. However, despite not flying outside of Hawaii, Hawaiian Airlines and Aloha Airlines were CAB-regulated carriers during this era, and participated in the interstate airline system by, for instance, selling connecting tickets to elsewhere in the US. For many reasons, neither airline was an intrastate carrier. For instance, it was determined in the courts that an intrastate carrier was essentially legally impossible in Hawaii. Federally-controlled waters start three miles offshore, which made most flights between islands subject to federal regulation.
Southwest started operations in 1971 and from 1971 thru 1978 was a Texas intrastate carrier, escaping CAB regulation. It was, in a sense, a carrier that was deregulated even before deregulation. Other important intrastate carriers included Pacific Southwest Airlines, Air California (later AirCal) and Air Florida, none of which survived the 1980s.
While the CAB was legally unable to regulate intrastate carriers, from 1952, it chose not to regulate airlines flying "small" aircraft, leading to the growth of a deregulated air taxi or commuter airline segment decades before wider deregulation. Any US airline that was a commuter carrier before 1979 therefore also escaped CAB regulation.
A prominent example of a CAB-era commuter carrier survives today: the large regional airline SkyWest, which first started operating in 1972 as a commuter carrier.
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