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The Airline Deregulation Act of 1978 had a significant impact on Eastern Airlines' profitability. Deregulation allowed airlines to set their own fares and routes, leading to increased competition. Eastern Airlines, which had been operating under a regulated environment, faced challenges adapting to the new competitive landscape.

Here are some key points regarding its impact:

1. Increased Competition: With the removal of federal control over routes and fares, Eastern Airlines encountered more competitors entering the market. This increased pressure to lower fares, which squeezed profit margins.

2. Cost Management Challenges: Eastern struggled with managing costs effectively in the deregulated environment, making it difficult to maintain profitability.

3. Labor Issues: Eastern had ongoing labor disputes, particularly with unions, which further strained its financial situation.

Overall, deregulation forced Eastern Airlines to adapt rapidly to a more competitive and less predictable market, contributing to its financial struggles in the subsequent years.

For more detailed insight, see this article on the Airline Deregulation Act.