Federal regulation of air transportation began with the Air Mail Act of 1925, a law that allowed the Post Office to contract with private air carriers – creating the first scheduled airlines. More comprehensive regulation came with the Air Commerce Act of 1926, which charged the Secretary of Commerce with fostering air commerce, regulating airlines and air traffic, certifying pilots and aircraft, and aiding air navigation . In the early era of air transportation, the aviation industry welcomed federal regulation as a means to improve safety and commercial development .
Under the New Deal, a new Bureau of Air Commerce was established within the Commerce Department and the federal government took charge of air traffic control centers around the country. The Civil Aeronautics Act, which President Roosevelt signed on June 23, 1938, extended the reach of federal regulation and transferred responsibility to an independent Civil Aeronautics Authority (CAA) and a 3-member Air Safety Board . The mission of the CAA was to encourage, develop, and regulate air transportation, for the improvement of mail service, national defense, and foreign and domestic commerce. It had new powers of rate regulation and approving new airline routes .
The CAA performed a number of tasks to improve aviation and air commerce: air traffic surveys to determine passenger flow and the need for new routes; analysis of the air mail rates charged by private carriers to determine fairness of pricing; examination of price complaints from passengers; authorization of new overseas routes; oversight of the trans-Atlantic industry (affected by the escalating war in Europe); and participation in international discussions of aviation regulations .
A key accomplishment of the CAA was improvement of air safety. From August 1938 to October 1939, the Air Safety Board investigated 2,668 accidents and made recommendations to prevent similar incidents in the future . The CAA also began implementing new safety initiatives and enforcing new safety standards through its Bureau of Safety Regulations: certification of airmen (e.g., pilots and mechanics); aircraft inspection; education on health issues related to aviation; and more . The CAA’s efforts paid off: “The scheduled airlines operating within the continental United States, under the Civil Aeronautics Act of 1938, during [fiscal year 1940] set the unparalleled record of completing a period of a full year without a single accident resulting in fatal injury to any passenger or crew member” . The CAA also ran a civilian pilot training program, working with 435 colleges and 528 flight schools to train and certify 8,313 new civilian pilots, more than any program in the United States had ever trained before .
In 1940, the CAA was reorganized into two new agencies: the Civil Aeronautics Board (CAB) to regulate routes and carriers and a Civil Aeronautics Administration in the Department of Commerce to handle safety certification. The latter’s functions were transferred to a new independent agency, the Federal Aviation Agency (FAA), in 1958. The CAB was terminated after passage of the Airline Deregulation Act of 1978 .
Sources: (1) “A Brief History of the FAA,” Federal Aviation Administration, http://www.faa.gov/about/history/brief_history/, accessed July 29, 2015. (2) See, e.g., “History, the Regulation of Air Transportation, Airports, and the Federal Aviation Administration” (training material), American Association of Airport Executives, http://www.aaae.org/training_professional_development/professional_development/accredited_airport_executive_program/program_study_materials/ACC%20Module1.pdf, accessed July 29, 2015. (3) “Transferring Funds from the Department of Commerce to the Civil Aeronautics Authority,” American Presidency Project, University of California – Santa Barbara, http://www.presidency.ucsb.edu/ws/?pid=61276, accessed July 29, 2015 (also see next note). (4) “Civil Aeronautics Act of 1938” (full text), Embry-Riddle Aeronautical University http://libraryonline.erau.edu/online-full-text/books-online/CivilAeronauticsAct.pdf, Titles I, II, and VII, accessed July 29, 2015. See also note 1. (5) “Second Annual Report of the Civil Aeronautics Authority: Fiscal Year Ended June 30, 1940,” Washington, DC: U.S. Government Printing Office, 1940, pp. 1-14. (6) “First Annual Report of the Civil Aeronautics Authority: Fiscal Year Ended June 30, 1939, with Additional Activities to November 1939,” Washington, DC; U.S. Government Printing Office, 1940, pp. 39-41. (7) See note 5 at pp. 14-22. (8) See note 5 at p. 2. (9) See note 5 at pp. 22-23; figures for 1940 fiscal year. (10) See note 1, and also “Records of the Federal Aviation Administration,” National Archives and Records Administration, http://www.archives.gov/research/guide-fed-records/groups/237.html, accessed July 30, 2015. (The two annual reports of the Civil Aeronautics Authority can be viewed at Hathitrust, http://babel.hathitrust.org/cgi/pt?id=uc1.b3907859;view=1up;seq=1.)