Flying Blue

The Story Of KLM’s Dutch Houses

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The other week I was talking with someone about the little houses offered to business class passengers on KLM flights. I realized it’s a story that has never been told here on OMAAT, which is a shame, as this is one of my favorite pieces of avgeek trivia.

Once upon a time, the Civil Aeronautics Board (CAB) regulated all manner of aviation-related policies in the United States. The CAB’s reach extended far beyond the safety and fare regulations we see today — prior to the Airline Deregulation Act in 1978 everything from fares to routes and even schedules were subject to government approval. There were separate standards controlling international routes and carriers, with the general idea being to ensure an equal playing field.

One of these rules prohibited airlines from incentivizing passengers. Given tariffs were regulated such that airlines could not compete on price — in other words, airlines had to sell tickets from New York to Los Angeles at the exact same fare — tangible incentives (gifts, for instance) had a monetary value which could effectively “reduce” the price of the trip for the customer, and were thus not allowed.

Airlines, of course, tried to circumvent the restrictions, because that’s what people do.

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