Mid-20th Century
In 1938, the Civil Aeronautics Act established the Civil Aeronautics Board. This board served numerous functions, the two most significant being determining airlines' routes of travel and regulating prices for passenger fares. The CAB based airfares on average costs, so because airlines couldn't compete with each other by offering lower fares, they competed by striving to offer the best quality service. If the CAB found an airline's service quality was lacking on a certain route, it would allow other carriers to begin operating on that route. In this environment, established airlines enjoyed an advantage over startups, as new carriers found it difficult to break into existing routes. The Federal Aviation Agency, now known as the Federal Aviation Administration, was created in 1958 to manage safety operations.