The CAB had earned a reputation for bureaucratic complacency; airlines were subject to lengthy delays when they applied for new routes or fare changes, and were often not approved.

For example, World Airways applied to begin a low-fare New York City–to–Los Angeles route in 1967; the CAB studied the request for over six years, only to dismiss it because the record was "stale".

[2] Continental Airlines began service between Denver and San Diego after eight years only because a United States Court of Appeals ordered the CAB to approve the application.

Most major airlines, whose profits were virtually guaranteed, favored the rigid system, but passengers who were forced to pay escalating fares were against it and were joined by communities that subsidized air service at ever-higher rates.

The Penn Central Railroad had collapsed in 1970, which was at that time the largest bankruptcy in history; this resulted in a huge taxpayer-funded bailout and the creation of the government-owned corporations Conrail and Amtrak.

The Carter administration argued that the industry and its customers would benefit from new entrants, the abolishing of price regulation, and reduced control over routes and hub cities.

[5] In 1970 and 1971, the Council of Economic Advisers in the Nixon administration, along with the Antitrust Division of the United States Department of Justice and other agencies, proposed legislation to diminish price collusion and entry barriers in rail and trucking transportation.

While the initiative was in process in the Ford administration, the Senate Judiciary Committee, which had jurisdiction over antitrust law, began hearings on airline deregulation in 1975.

A concerted push for the legislation had developed from leading economists, leading think-tanks in Washington, a civil society coalition advocating the reform (patterned on a coalition earlier developed for the truck-and-rail-reform efforts), the head of the regulatory agency, Senate leadership, the Carter administration, and even some in the airline industry.

The growth of low-cost carriers such as Southwest Airlines has brought more point-to-point service back into the United States air transport system, and contributed to the development of a wider range of aircraft types that are better adaptable to markets of varying sizes.

As a result, no one foresaw the extent to which new bottlenecks would develop: a flight-choked Northeast corridor, overcrowded airports, delays, and terrorist risks consequently making air travel increasingly difficult.