Alfred Kahn 1917-2010; Economist Upended Airline Industry
Author: Stephen Miller</br></br>The economist Alfred Kahn was considered the father of airline deregulation. He was also a notorious Washington wag, who once responded to White House criticisms for warning of a depression by changing "depression" to "banana."</br></br>As chairman of the Civil Aeronautics Board, or CAB, under President Jimmy Carter, Mr. Kahn eliminated restrictions on prices and allowed airlines to choose their own routes. The move has been credited with lowering airfares--estimates of annual savings range up to $20 billion--and dramatically expanding flying. It also caused industry turmoil, as old airlines went bankrupt and new discount carriers, like Jet Blue and Southwest, emerged.</br></br>Mr. Kahn, who died Monday at age 93, was a happy warrior. At New York's Public Service Commission, he introduced off-peak discounts on electricity and let consumers plug their own phones into AT&T's system. In Washington, he once called a news conference to criticize the president for overriding him on a CAB matter. He set the bureaucratic tone for CAB with a memo advising staff to read their memos to their children, adding, "If they do not drive you out of the room with their derisive laughter, disown them."</br></br>Confirmed by Congress in 1977, Mr. Kahn introduced the biggest changes in airline regulation since CAB was established in 1940. By fiat, he eliminated restrictions on offering discounts and on establishing new routes and opened up smaller airports, including Chicago's Midway, to commercial traffic. In one case, two airlines flying between Los Angeles and Miami in 1978 slashed prices by a third and eliminated the Saturday stay-over rule. "I open my mouth and a fare goes down," he told the Washington Post in 1978.