Transportation infrastructure - roads, bridges, rail lines, waterways, and airports - has traditionally been built by governments, with the cost borne by user fees or by all taxpayers. The investment was considered a public good that only the government could afford to do.
In this country, we've always had a mix of public and private investment in transportation. The government spurred the building of private-sector rail lines with free land in the 19th century, and it helped the first airlines get off the ground with U.S. mail contracts in the 1920s and '30s.
The City of Philadelphia built Philadelphia International Airport in the 1940s as a way to spur economic development while also helping support a fledgling, heavily regulated - but still private-sector - airline industry.
Today, most airports are still government-owned and largely paid for with fees collected from passengers or from the airlines and concessionaires who benefit from using them. But if a city-owned airport builds a new terminal to accommodate airlines, and the carriers later abandon the city because they're not making enough money, guess who's stuck paying the mortgage?
Many smaller U.S. airports do give direct aid to airlines. An example is Lehigh Valley International, which pays to advertise new service for start-up airlines because local officials say they believe the flights are good for the whole community.
The Federal Aviation Administration, whose job it is to regulate and promote air travel, is funded not only with taxes and fees levied on airlines and their customers but also with general tax revenue.
So let's call the American aviation system a public-private partnership designed for the good of everyone.
Looking at airline regulation, the most pervasive form of it for the domestic industry ended in 1978, when Congress and the Carter administration lifted all restrictions on fares, routes, and frequency of service.
