Page 65 - Tourism The International Business

3. How do tourists travel?

and American Sightseeing International offer regularly scheduled sightseeing tours of most major cities. Other
companies contract their buses for local services to a tour operator as part of a tour. Many hotels close to airports
offer complimentary transfers between airport and hotel.

Exhibit 26: The Airbus connects downtown
London and its airports. (Courtesy Britrail Travel
International, Inc.)

Regulation
The past decade has seen sweeping changes in the regulation of the American transportation system. In order to
understand the present environment it is necessary to review the past.
Goals of regulation

As the airline industry developed in the 1930s there was concern that unbridled growth could have negative
consequences for industry and passengers alike. From this concern there developed a desire to control the growth
of the airline industry through a variety of regulations.
The goals of regulation were twofold: to protect the public and to promote the best possible system of

transportation. Because these goals can be contradictory, the result was a system that did neither one completely.
Types of regulation
There were two types of regulations: economic and physical. The Civil Aeronautics Board or CAB was formed in
1938. The board consists of five members who are independent of the executive branch but appointed by the US

President with the consent of Congress. The CAB was primarily responsible for the economic aspects of regulation
at the federal level.
Economic. Economically, control was exerted over rates, entry into and exit from the market, and the level of
service provided. Economic regulations were intended to prevent a few airlines from controlling the market. The
airlines were regarded as a public utility, and there was a fear that open competition might result in service to only
the major markets; many communities would not receive airline service.

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