Airline deregulation in the United States didn’t mean that airlines were no longer regulated. In fact airlines are one of the most heavily regulated businesses in the country. Instead what it meant was that the government would no longer be the one to decide which routes airlines could fly, and what prices they had to charge.
The Civil Aeronautics Board focused on eliminating ‘ruinous’ competition and ensuring prices were high enough, and competition limited enough, that airlines could earn a consistent profit.
However when you set prices high, airlines compete for customer business in other ways. Each ticket was lucrative, so they’d spend money on customers – for instance on service and food and beverage – to attract more ticket sales.
Airlines also colluded to limit inflight drink service. U.S. airlines entered into an agreement not to serve customers more than two drinks back in 1956, but the agreement fell apart in 1971 as carriers competed for business.
The CAB actually discussed whether they needed to regulate the thickness of sandwiches on board, because airlines were getting too competitive on food. They were charging high prices for tickets, but spending that money right back on the customer – and the government meant to stop it.
Somehow I had forgotten that there were, once, actual regulations on inflight sandwiches – at least for international flights.
In 1958 airlines launched the first ‘economy’ service. This was strictly defined by world airline trade group IATA, to make sure airlines didn’t actually compete with each other on amenities offered. Airlines were allowed to serve coffee, tea, and mineral water to drink and sandwiches, which were supposed to be “simple, cold, and inexpensive.”
Even that couldn’t stop competition, though. American carriers drove to limit food costs, and Pan Am and TWA offered options like roast beef, ham and cheese, and egg salad between two pieces of bread. Several foreign carriers defected, most notably Scandinavian.
[P]assengers almost had an all-you-can-eat buffet of smørrebrød, the open-faced sandwiches popular in Scandinavia. SAS had 16 different variations and, to quote the Times, would “do something fancy with it, such as arranging it with a rosette, with perhaps a little pickle and radish added.”
An SAS spokesman was quoted as saying, “Since European loaves are a little smaller than American, we will offer each passenger three sandwiches [free of charge]. Of course, you can’t eat an open sandwich with your hand, so we will give you a knife and fork.”
Swiss offered appetizer sandwiches, an entree sandwich, and two dessert sandwiches. KLM and Air France were forced to match.
U.S. carriers formally complained about what amounted to coursed meals on bread. Customers might choose an airline based on service and that was supposed to be verboten. Swiss, for their part, claimed “everyman is entitled to his concept of a sandwich and we have ours.”
A special IATA meeting was held in London to define a sandwich, and hear violations. The airline industry body declared that sandwiches had to be “cold… simple… unadorned… inexpensive” and had to “consist of a substantial and visible chunk of bread.” Moreover they could not contain anything “normally regarded as expensive or luxurious, such as smoked salmon, oysters, caviar, lobster, game, asparagus, pate de foie gras” nor could they feature “overgenerous or lavish helpings which affect the money value of the unit.”
As is typical for the airline industry, though, most airlines were let off with a warning. Scandinavian, though, was fined $20,000.
SAS, in turn, ran ads saying they’d “rather pay a big fine than lower [their] service standards.” Although in truth they did lower their standards – they acquiesced and ensured that “garnishing didn’t cover the entire slice of bread. At least 2.5 square centimeters of the bread had to remain visible.”