This article is an analysis of the airline industry’s struggle to achieve profitability in the age of deregulation. The article begins with a description of historical circumstances that have brought about the airline industry’s current state. Next, the article evaluates the advantages and disadvantages of deregulating the airline industry and discusses how the problems of anticompetitive abuses and excessive competition have plagued the industry since deregulation. The article then explores possible solutions to the airline industry’s dilemma and concludes that, as a form of mass transportation, the airlines are incapable of yielding long-term profits because consumer demand forces pricing below cost. Lastly, the article hypothesizes that the airlines will eventually cease to exist as ordinary commercial enterprises and will instead rely on government subsidies to maintain their operations and perhaps even descend into public ownership.

The Federal Aviation Administration is giving serious consideration to converting to a user fee based system to fund its air traffic control operations. However, the FAA’s experience with user fee funding system has been an unmitigated disaster. Beginning in 1997, the FAA has attempted to use limited user fees for overflights. In implementing this system, the FAA failed to invite and ignored input from the airline industry and failed demonstrate how the fees charged related to the cost of providing services as the Federal Aviation Reauthorization Act of 1996 required. Therefore, the D.C. Circuit Court twice struck down the fees when they were challenged. In implementing a more massive user fee funding system to replace the “Aviation Trust Fund”, the FAA most avoid repeating these past mistakes to have a successful conversion.

In this article the author examines the issue of whether or not a Georgia State Dram Shop Act is properly preempted by the Airline Deregulation Act. In 2005, the Supreme Court of Georgia held the question of federal pre-emption moot in a non-passenger's suit against Delta airlines. The underlying litigation sought damages after an accident caused by a driver who was earlier served alcoholic drinks on while aboard a Delta airplane. The Supreme Court of Georgia, the author finds, failed to address the issue of preemption, thus subjecting future claimants to continued uncertainty.