A. Kahn; led airline deregulation

Alfred E. Kahn, 93, the economist-turned-regulator whose moves to end U.S. government controls on airlines in the late 1970s set the stage for today's cheap fares and for much of the industry's financial troubles, died Monday at his home in Ithaca, N.Y.

Cornell University, where he spent most of his career, said he died from cancer.

As chairman of the Civil Aeronautics Board under President Jimmy Carter, Mr. Kahn was probably the first Washington regulator to put himself out of a job. He argued that airlines could serve consumers and business best by competing with one another, a novel notion at a time when prices and routes were government-controlled.

It was under pressure from Mr. Kahn and Carter that Congress passed the Airline Deregulation Act of 1978. Later, as Carter's anti-inflation adviser, Mr. Kahn also earned fame for saying banana rather than depression to avoid uttering an unpopular word.

He was often asked in his later years whether his push for deregulation had made the industry worse off than if government oversight had remained.

"Consumers have benefited to the effect of $20 billion a year," Mr. Kahn was quoted in the Denver Post as saying at a 2005 conference. "Where competition is feasible, the government should get the hell out of the way."

Mr. Kahn was known not just for what he did but also for the humor and informality with which he did it. As chairman of the Civil Aeronautics Board, he granted media interviews in his stocking feet, hanging a leg over the arm of the old rocking chair in his office. He had a bad back, and once spoke to a conference of 60 utility lawyers while lying flat on a table.

He was chairman of the economics department and dean of the College of Arts and Sciences at Cornell before entering public service. He also finished his career there.

At Cornell, he was an enthusiastic performer in Gilbert & Sullivan operettas. His roles - he sang baritone - ranged from Sergeant Meryll in Yeomen of the Guard in 1964 to the poet Bunthorne in the 2000 production of Patience.

Alfred Edward Kahn was born in Paterson, N.J., on Oct. 17, 1917, to Jacob and Bertha Kahn. His father, a Russian Jewish immigrant, worked in a silk mill.

Mr. Kahn graduated from high school at 15 and New York University at 18, summa cum laude and first in his class. He earned a doctorate in economics from Yale University in 1942 after graduate study at NYU and the University of Missouri.

Before World War II, he also worked for policy research groups and government agencies in Washington, including the Brookings Institution and the antitrust division of the Justice Department. He served in the Army during the war and began teaching at Cornell in 1947.

His thinking on marginal-cost pricing - setting a product's price to account for the cost of producing one more unit - led him to focus on ways to inject competition into industries previously viewed as monopolistic, such as power utilities. Rather than merely controlling prices and service, he argued, regulators could set the stage for lower prices by applying some of the principles of classical economics.

In 1974, Mr. Kahn was named chairman of the New York Public Service Commission, which regulated more than 40 industries, including buses, telephones, shipping docks, and the electric-and gas-utility industry. Against the wishes of the affected companies, he pioneered such notions as peak- and off-peak pricing for electricity and disclosure of the cost of phone services rather than bundling them together in rate applications.

Under Mr. Kahn, the CAB began approving discount fares for interstate and trans-Atlantic travel. Passengers began flying cheaper, and planes began filling up. He also loosened rules to let airlines set their own fares, and to choose their routes with more freedom from government oversight.