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An airline is a company that provides air transport services for traveling passengers or
freight In transportation, cargo refers to goods transported by land, water or air, while freight refers to its conveyance. In economics, freight refers to goods transported at a freight rate for commercial gain. The term cargo is also used in ...
(cargo). Airlines use
aircraft An aircraft ( aircraft) is a vehicle that is able to flight, fly by gaining support from the Atmosphere of Earth, air. It counters the force of gravity by using either Buoyancy, static lift or the Lift (force), dynamic lift of an airfoil, or, i ...
to supply these services and may form
partnership A partnership is an agreement where parties agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations ...
s or alliances with other airlines for codeshare agreements, in which they both offer and operate the same flight. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body. Airlines may be scheduled or
charter A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified. It is implicit that the granter retains superiority (or sovereignty), and that the ...
operators. The first airline was the German
airship An airship, dirigible balloon or dirigible is a type of aerostat (lighter-than-air) aircraft that can navigate through the air flying powered aircraft, under its own power. Aerostats use buoyancy from a lifting gas that is less dense than the ...
company DELAG, founded on November 16, 1909. The four oldest non-airship airlines that still exist are the Netherlands' KLM (1919), Colombia's Avianca (1919), Australia's
Qantas Qantas ( ), formally Qantas Airways Limited, is the flag carrier of Australia, and the largest airline by fleet size, international flights, and international destinations in Australia and List of largest airlines in Oceania, Oceania. A foundi ...
(1920) and the Russian Aeroflot (1923). Airline ownership has seen a shift from mostly personal ownership until the 1930s to government-ownership of major airlines from the 1940s to 1980s and back to large-scale
privatization Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation w ...
following the mid-1980s. Since the 1980s, there has been a trend of major airline
mergers Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...
and the formation of airline alliances. The largest alliances are
Star Alliance Star Alliance is an airline alliance headquartered in Frankfurt, Germany. Founded on 14 May 1997, it was the world's first global airline alliance. Star Alliance has 25 member airlines that operate a combined fleet of over 5,000 aircraft, servi ...
, SkyTeam and
Oneworld Oneworld (Computer reservations system, CRS: *O, stylised as oneworld) is a global airline alliance consisting of 14 member airlines. It was founded on 1 February 1999. The alliance's stated objective is to be the first choice airline alliance f ...
. Airline alliances coordinate their passenger service programs (such as lounges and
frequent-flyer programs A frequent-flyer programme (FFP) is a loyalty program offered by an airline. Many airlines have frequent-flyer programmes designed to encourage airline customers enrolled in the programme to accumulate points (also called miles, kilometres, ...
), offer special interline tickets and often engage in extensive codesharing (sometimes systemwide).


History


The first airlines

DELAG, ''Deutsche Luftschiffahrts-Aktiengesellschaft I'' was the world's first airline. It was founded on November 16, 1909, with government assistance, and operated airships manufactured by The Zeppelin Corporation. Its headquarters were in
Frankfurt Frankfurt am Main () is the most populous city in the States of Germany, German state of Hesse. Its 773,068 inhabitants as of 2022 make it the List of cities in Germany by population, fifth-most populous city in Germany. Located in the forela ...
. The first
fixed-wing A fixed-wing aircraft is a heavier-than-air aircraft, such as an airplane, which is capable of flight using Lift (force), aerodynamic lift. Fixed-wing aircraft are distinct from rotorcraft, rotary-wing aircraft (in which a Helicopter rotor, r ...
scheduled airline was started on January 1, 1914. The flight was piloted by Tony Jannus and flew from St. Petersburg, Florida, to
Tampa, Florida Tampa ( ) is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. Tampa's borders include the north shore of Tampa Bay and the east shore of Old Tampa Bay. Tampa is the largest city in the Tampa Bay area and t ...
, operated by the St. Petersburg–Tampa Airboat Line.


Europe


Beginnings

The earliest fixed wing airline in Europe was
Aircraft Transport and Travel Aircraft Transport and Travel Limited, also known as AT&T was a British airline formed during the First World War, a subsidiary of Airco. It was the first airline to operate a regular international flight (between London and Paris). It is the ...
, formed by
George Holt Thomas George Holt Thomas (31 March 1869 – 1 January 1929) was an aviation industry pioneer and newspaper proprietor. In 1911, Holt Thomas founded the business which became Aircraft Manufacturing Company Limited or Airco. Son and grandson of succes ...
in 1916; via a series of takeovers and mergers, this company is an ancestor of modern-day
British Airways British Airways plc (BA) is the flag carrier of the United Kingdom. It is headquartered in London, England, near its main Airline hub, hub at Heathrow Airport. The airline is the second largest UK-based carrier, based on fleet size and pass ...
. Using a fleet of former military Airco DH.4A biplanes that had been modified to carry two passengers in the
fuselage The fuselage (; from the French language, French ''fuselé'' "spindle-shaped") is an aircraft's main body section. It holds Aircrew, crew, passengers, or cargo. In single-engine aircraft, it will usually contain an Aircraft engine, engine as wel ...
, it operated relief flights between
Folkestone Folkestone ( ) is a coastal town on the English Channel, in Kent, south-east England. The town lies on the southern edge of the North Downs at a valley between two cliffs. It was an important harbour, shipping port, and fashionable coastal res ...
and
Ghent Ghent ( ; ; historically known as ''Gaunt'' in English) is a City status in Belgium, city and a Municipalities of Belgium, municipality in the Flemish Region of Belgium. It is the capital and largest city of the Provinces of Belgium, province ...
, Belgium. On July 15, 1919, the company flew a proving flight across the
English Channel The English Channel, also known as the Channel, is an arm of the Atlantic Ocean that separates Southern England from northern France. It links to the southern part of the North Sea by the Strait of Dover at its northeastern end. It is the busi ...
, despite a lack of support from the British government. Flown by Lt. H Shaw in an Airco DH.9 between RAF Hendon and Paris – Le Bourget Airport, the flight took 2 hours and 30 minutes at £21 per passenger. On August 25, 1919, the company used DH.16s to pioneer a regular service from Hounslow Heath Aerodrome to Paris's Le Bourget, the first regular international service in the world. The airline soon gained a reputation for reliability, despite problems with bad weather, and began to attract European competition. In November 1919, it won the first British civil airmail contract. Six
Royal Air Force The Royal Air Force (RAF) is the Air force, air and space force of the United Kingdom, British Overseas Territories and Crown Dependencies. It was formed towards the end of the World War I, First World War on 1 April 1918, on the merger of t ...
Airco DH.9A aircraft were lent to the company, to operate the airmail service between Hawkinge and
Cologne Cologne ( ; ; ) is the largest city of the States of Germany, German state of North Rhine-Westphalia and the List of cities in Germany by population, fourth-most populous city of Germany with nearly 1.1 million inhabitants in the city pr ...
. In 1920, they were returned to the Royal Air Force. Other British competitors were quick to follow – Handley Page Transport was established in 1919 and used the company's converted wartime Type O/400
bomber A bomber is a military combat aircraft that utilizes air-to-ground weaponry to drop bombs, launch aerial torpedo, torpedoes, or deploy air-launched cruise missiles. There are two major classifications of bomber: strategic and tactical. Strateg ...
s with a capacity for 12 passengers, to run a
London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
-Paris passenger service. The first French airline was Société des lignes Latécoère, later known as Aéropostale, which started its first service in late 1918 to Spain. The Société Générale des Transports Aériens was created in late 1919, by the Farman brothers and the Farman F.60 Goliath plane flew scheduled services from Toussus-le-Noble to Kenley, near
Croydon Croydon is a large town in South London, England, south of Charing Cross. Part of the London Borough of Croydon, a Districts of England, local government district of Greater London; it is one of the largest commercial districts in Greater Lond ...
, England. Another early French airline was the Compagnie des Messageries Aériennes, established in 1919 by Louis-Charles Breguet, offering a mail and freight service between Le Bourget Airport, Paris and Lesquin Airport,
Lille Lille (, ; ; ; ; ) is a city in the northern part of France, within French Flanders. Positioned along the Deûle river, near France's border with Belgium, it is the capital of the Hauts-de-France Regions of France, region, the Prefectures in F ...
. The first German airline to use heavier than air aircraft was Deutsche Luft-Reederei established in 1917 which started operating in February 1919. In its first year, the D.L.R. operated regularly scheduled flights on routes with a combined length of nearly 1000 miles. By 1921 the D.L.R. network was more than 3000 km (1865 miles) long, and included destinations in the Netherlands, Scandinavia and the Baltic Republics. Another important German airline was Junkers Luftverkehr, which began operations in 1921. It was a division of the aircraft manufacturer
Junkers Junkers Flugzeug- und Motorenwerke AG (JFM, earlier JCO or JKO in World War I, English language, English: Junkers Aircraft and Motor Works) more commonly Junkers , was a major German aircraft manufacturer, aircraft and aircraft engine manufactu ...
, which became a separate company in 1924. It operated joint-venture airlines in Austria, Denmark, Estonia, Finland, Hungary, Latvia, Norway, Poland, Sweden and Switzerland. The Dutch airline KLM made its first flight in 1920, and is the oldest continuously operating airline in the world. Established by aviator Albert Plesman, it was immediately awarded a "Royal" predicate from Queen Wilhelmina. Its first flight was from Croydon Airport,
London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
to
Amsterdam Amsterdam ( , ; ; ) is the capital of the Netherlands, capital and Municipalities of the Netherlands, largest city of the Kingdom of the Netherlands. It has a population of 933,680 in June 2024 within the city proper, 1,457,018 in the City Re ...
, using a leased
Aircraft Transport and Travel Aircraft Transport and Travel Limited, also known as AT&T was a British airline formed during the First World War, a subsidiary of Airco. It was the first airline to operate a regular international flight (between London and Paris). It is the ...
DH-16, and carrying two British journalists and a number of newspapers. In 1921, KLM started scheduled services. In
Finland Finland, officially the Republic of Finland, is a Nordic country in Northern Europe. It borders Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of Bothnia to the west and the Gulf of Finland to the south, ...
, the charter establishing Aero O/Y (now
Finnair Finnair Plc (, ) is the flag carrier and largest full-service legacy airline of Finland, with headquarters in Vantaa on the grounds of Helsinki Airport, its airline hub, hub. Finnair and its subsidiaries dominate both domestic and international ...
) was signed in the city of
Helsinki Helsinki () is the Capital city, capital and most populous List of cities and towns in Finland, city in Finland. It is on the shore of the Gulf of Finland and is the seat of southern Finland's Uusimaa region. About people live in the municipali ...
on 12 September 1923. Junkers F.13 D-335 became the first aircraft of the company, when Aero took delivery of it on 14 March 1924. The first flight was between Helsinki and
Tallinn Tallinn is the capital city, capital and List of cities in Estonia, most populous city of Estonia. Situated on a Tallinn Bay, bay in north Estonia, on the shore of the Gulf of Finland of the Baltic Sea, it has a population of (as of 2025) and ...
, capital of
Estonia Estonia, officially the Republic of Estonia, is a country in Northern Europe. It is bordered to the north by the Gulf of Finland across from Finland, to the west by the Baltic Sea across from Sweden, to the south by Latvia, and to the east by Ru ...
, and it took place on 20 March 1924, one week later. In the
Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...
, the Chief Administration of the Civil Air Fleet was established in 1921. One of its first acts was to help found Deutsch-Russische Luftverkehrs A.G. (Deruluft), a German-Russian joint venture to provide air transport from Russia to the West. Domestic air service began around the same time, when Dobrolyot started operations on 15 July 1923 between Moscow and Nizhni Novgorod. Since 1932 all operations had been carried under the name Aeroflot. Early European airlines tended to favor comfort – the passenger cabins were often spacious with luxurious interiors – over speed and efficiency. The relatively basic navigational capabilities of pilots at the time also meant that delays due to the weather were commonplace.


Rationalization

By the early 1920s, small airlines were struggling to compete, and there was a movement towards increased rationalization and consolidation. In 1924, Imperial Airways was formed from the merger of Instone Air Line Company, British Marine Air Navigation, Daimler Airway and Handley Page Transport, to allow British airlines to compete with stiff competition from French and German airlines that were enjoying heavy government subsidies. The airline was a pioneer in surveying and opening up air routes across the world to serve far-flung parts of the
British Empire The British Empire comprised the dominions, Crown colony, colonies, protectorates, League of Nations mandate, mandates, and other Dependent territory, territories ruled or administered by the United Kingdom and its predecessor states. It bega ...
and to enhance trade and integration. The first new airliner ordered by Imperial Airways, was the Handley Page W8f ''City of Washington'', delivered on 3 November 1924. In the first year of operation the company carried 11,395 passengers and 212,380 letters. In April 1925, the film '' The Lost World'' became the first film to be screened for passengers on a scheduled airliner flight when it was shown on the London-Paris route. Two French airlines also merged to form Air Union on 1 January 1923. This later merged with four other French airlines to become Air France, the country's flagship carrier to this day, on 17 May 1933. Germany's Deutsche Lufthansa was created in 1926 by merger of two airlines, one of them Junkers Luftverkehr. Lufthansa, due to the
Junkers Junkers Flugzeug- und Motorenwerke AG (JFM, earlier JCO or JKO in World War I, English language, English: Junkers Aircraft and Motor Works) more commonly Junkers , was a major German aircraft manufacturer, aircraft and aircraft engine manufactu ...
heritage and unlike most other airlines at the time, became a major investor in airlines outside of Europe, providing capital to Varig and Avianca. German airliners built by
Junkers Junkers Flugzeug- und Motorenwerke AG (JFM, earlier JCO or JKO in World War I, English language, English: Junkers Aircraft and Motor Works) more commonly Junkers , was a major German aircraft manufacturer, aircraft and aircraft engine manufactu ...
, Dornier, and
Fokker Fokker (; ) was a Dutch aircraft manufacturer that operated from 1912 to 1996. The company was founded by the Dutch aviator Anthony Fokker and became famous during World War I for its fighter aircraft. During its most successful period in the 19 ...
were among the most advanced in the world at the time.


Expansion

In 1926, Alan Cobham surveyed a flight route from the UK to
Cape Town Cape Town is the legislature, legislative capital city, capital of South Africa. It is the country's oldest city and the seat of the Parliament of South Africa. Cape Town is the country's List of municipalities in South Africa, second-largest ...
,
South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
, following this up with another proving flight to
Melbourne Melbourne ( , ; Boonwurrung language, Boonwurrung/ or ) is the List of Australian capital cities, capital and List of cities in Australia by population, most populous city of the States and territories of Australia, Australian state of Victori ...
,
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
. Other routes to
British India The provinces of India, earlier presidencies of British India and still earlier, presidency towns, were the administrative divisions of British governance in South Asia. Collectively, they have been called British India. In one form or another ...
and the
Far East The Far East is the geographical region that encompasses the easternmost portion of the Asian continent, including North Asia, North, East Asia, East and Southeast Asia. South Asia is sometimes also included in the definition of the term. In mod ...
were also charted and demonstrated at this time. Regular services to
Cairo Cairo ( ; , ) is the Capital city, capital and largest city of Egypt and the Cairo Governorate, being home to more than 10 million people. It is also part of the List of urban agglomerations in Africa, largest urban agglomeration in Africa, L ...
and
Basra Basra () is a port city in Iraq, southern Iraq. It is the capital of the eponymous Basra Governorate, as well as the List of largest cities of Iraq, third largest city in Iraq overall, behind Baghdad and Mosul. Located near the Iran–Iraq bor ...
began in 1927 and were extended to
Karachi Karachi is the capital city of the Administrative units of Pakistan, province of Sindh, Pakistan. It is the List of cities in Pakistan by population, largest city in Pakistan and 12th List of largest cities, largest in the world, with a popul ...
in 1929. The London-
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
service was inaugurated in 1932 with the Handley Page HP 42 airliners. Further services were opened up to
Calcutta Kolkata, also known as Calcutta (List of renamed places in India#West Bengal, its official name until 2001), is the capital and largest city of the Indian States and union territories of India, state of West Bengal. It lies on the eastern ba ...
, Rangoon,
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
,
Brisbane Brisbane ( ; ) is the List of Australian capital cities, capital and largest city of the States and territories of Australia, state of Queensland and the list of cities in Australia by population, third-most populous city in Australia, with a ...
and
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
passengers departed London on 14 March 1936 following the establishment of a branch from Penang to Hong Kong. France began an air mail service to
Morocco Morocco, officially the Kingdom of Morocco, is a country in the Maghreb region of North Africa. It has coastlines on the Mediterranean Sea to the north and the Atlantic Ocean to the west, and has land borders with Algeria to Algeria–Morocc ...
in 1919 that was bought out in 1927, renamed Aéropostale, and injected with capital to become a major international carrier. In 1933, Aéropostale went
bankrupt Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the de ...
, was nationalized and merged into Air France. Although Germany lacked colonies, it also began expanding its services globally. In 1931, the airship Graf Zeppelin began offering regular scheduled passenger service between Germany and South America, usually every two weeks, which continued until 1937. In 1936, the airship Hindenburg entered passenger service and successfully crossed the Atlantic 36 times before crashing at Lakehurst, New Jersey, on 6 May 1937. In 1938, a weekly air service from Berlin to
Kabul Kabul is the capital and largest city of Afghanistan. Located in the eastern half of the country, it is also a municipality, forming part of the Kabul Province. The city is divided for administration into #Districts, 22 municipal districts. A ...
,
Afghanistan Afghanistan, officially the Islamic Emirate of Afghanistan, is a landlocked country located at the crossroads of Central Asia and South Asia. It is bordered by Pakistan to the Durand Line, east and south, Iran to the Afghanistan–Iran borde ...
, started operating. From February 1934 until World War II began in 1939, Deutsche Lufthansa operated an airmail service from
Stuttgart Stuttgart (; ; Swabian German, Swabian: ; Alemannic German, Alemannic: ; Italian language, Italian: ; ) is the capital city, capital and List of cities in Baden-Württemberg by population, largest city of the States of Germany, German state of ...
,
Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...
via
Spain Spain, or the Kingdom of Spain, is a country in Southern Europe, Southern and Western Europe with territories in North Africa. Featuring the Punta de Tarifa, southernmost point of continental Europe, it is the largest country in Southern Eur ...
, the
Canary Islands The Canary Islands (; ) or Canaries are an archipelago in the Atlantic Ocean and the southernmost Autonomous communities of Spain, Autonomous Community of Spain. They are located in the northwest of Africa, with the closest point to the cont ...
and West Africa to Natal in
Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
. This was the first time an airline flew across an ocean.James W. Graue & John Duggan "Deutsche Lufthansa South Atlantic Airmail Service 1934–1939", Zeppelin Study Group, Ickenham, UK 2000 By the end of the 1930s Aeroflot had become the world's largest airline, employing more than 4,000 pilots and 60,000 other service personnel and operating around 3,000 aircraft (of which 75% were considered obsolete by its own standards). During the Soviet era Aeroflot was synonymous with Russian civil aviation, as it was the only air carrier. It became the first airline in the world to operate sustained regular jet services on 15 September 1956 with the Tupolev Tu-104.


Deregulation

Deregulation of the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...
airspace in the early 1990s has had substantial effect on the structure of the industry there. The shift towards 'budget' airlines on shorter routes has been significant. Airlines such as EasyJet and Ryanair have often grown at the expense of the traditional national airlines. There has also been a trend for these national airlines themselves to be privatized such as has occurred for
Aer Lingus Aer Lingus ( ; an anglicisation of the Irish language, Irish , meaning "air fleet") is an Irish airline company which is the flag carrier of Republic of Ireland, Ireland. Founded by the Irish Government, it was privatised between 2006 and 201 ...
and
British Airways British Airways plc (BA) is the flag carrier of the United Kingdom. It is headquartered in London, England, near its main Airline hub, hub at Heathrow Airport. The airline is the second largest UK-based carrier, based on fleet size and pass ...
. Other national airlines, including Italy's Alitalia, suffered – particularly with the rapid increase of oil prices in early 2008.


United States


Early development

Tony Jannus conducted the United States' first scheduled commercial airline flight on January 1, 1914, for the St. Petersburg-Tampa Airboat Line. The 23-minute flight traveled between St. Petersburg, Florida and
Tampa, Florida Tampa ( ) is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. Tampa's borders include the north shore of Tampa Bay and the east shore of Old Tampa Bay. Tampa is the largest city in the Tampa Bay area and t ...
, passing some above Tampa Bay in Jannus' Benoist XIV wood and muslin biplane flying boat. His passenger was a former mayor of St. Petersburg, who paid $400 for the privilege of sitting on a wooden bench in the open cockpit. The Airboat line operated for about four months, carrying more than 1,200 passengers who paid $5 each. Chalk's International Airlines began service between Miami and Bimini in the
Bahamas The Bahamas, officially the Commonwealth of The Bahamas, is an archipelagic and island country within the Lucayan Archipelago of the Atlantic Ocean. It contains 97 per cent of the archipelago's land area and 88 per cent of its population. ...
in February 1919. Based in Ft. Lauderdale, Chalk's claimed to be the oldest continuously operating airline in the United States until its closure in 2008. Following
World War I World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...
, the United States found itself swamped with aviators. Many decided to take their war-surplus aircraft on barnstorming campaigns, performing aerobatic maneuvers to woo crowds. In 1918, the
United States Post Office Department The United States Post Office Department (USPOD; also known as the Post Office or U.S. Mail) was the predecessor of the United States Postal Service, established in 1792. From 1872 to 1971, it was officially in the form of a Cabinet of the Un ...
won the financial backing of
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
to begin experimenting with air mail service, initially using Curtiss Jenny aircraft that had been procured by the
United States Army Air Service The United States Army Air Service (USAAS)Craven and Cate Vol. 1, p. 9 (also known as the ''"Air Service"'', ''"U.S. Air Service"'' and before its legislative establishment in 1920, the ''"Air Service, United States Army"'') was the aerial warf ...
. Private operators were the first to fly the mail but due to numerous accidents the US Army was tasked with mail delivery. During the Army's involvement they proved to be too unreliable and lost their air mail duties. By the mid-1920s, the Post Office had developed its own air mail network, based on a transcontinental backbone between New York City and
San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...
. To supplement this service, they offered twelve contracts for spur routes to independent bidders. Some of the carriers that won these routes would, through time and mergers, evolve into Pan Am,
Delta Air Lines Delta Air Lines, Inc. is a Major airlines of the United States, major airline in the United States headquartered in Atlanta, Georgia (U.S. state), Georgia, operating nine hubs, with Hartsfield–Jackson Atlanta International Airport being its ...
, Braniff Airways,
American Airlines American Airlines, Inc. is a major airlines of the United States, major airline in the United States headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex, and is the Largest airlines in the world, largest airline in the ...
,
United Airlines United Airlines, Inc. is a Major airlines of the United States, major airline in the United States headquartered in Chicago, Chicago, Illinois that operates an extensive domestic and international route network across the United States and six ...
(originally a division of
Boeing The Boeing Company, or simply Boeing (), is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide. The company also provides leasing and product support s ...
), Trans World Airlines,
Northwest Airlines Northwest Airlines (often abbreviated as NWA) was a major airline in the United States that operated from 1926 until it Delta Air Lines–Northwest Airlines merger, merged with Delta Air Lines in 2010. The merger made Delta the largest airline ...
, and
Eastern Air Lines Eastern Air Lines (also colloquially known as Eastern) was a major airline in the United States that operated from 1926 to 1991. Before its dissolution, it was headquartered at Miami International Airport in an unincorporated area of Miami-Dade ...
. Service during the early 1920s was sporadic: most airlines at the time were focused on carrying bags of mail. In 1925, however, the
Ford Motor Company Ford Motor Company (commonly known as Ford) is an American multinational corporation, multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. T ...
bought out the Stout Aircraft Company and began construction of the all-metal
Ford Trimotor The Ford Trimotor (also called the "Tri-Motor", and nicknamed the "Tin Goose") is an American Trimotor, three-engined transport plane, transport aircraft. Production started in 1925 by the companies of Henry Ford and ended on June 7, 1933, afte ...
, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable. Air service was seen as a supplement to rail service in the American transportation network. At the same time, Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan Am, with a fleet of flying boats that linked
Los Angeles Los Angeles, often referred to by its initials L.A., is the List of municipalities in California, most populous city in the U.S. state of California, and the commercial, Financial District, Los Angeles, financial, and Culture of Los Angeles, ...
to
Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...
and
Boston Boston is the capital and most populous city in the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States. The city serves as the cultural and Financial centre, financial center of New England, a region of the Northeas ...
to
London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
. Pan Am and Northwest Airways (which began flights to Canada in the 1920s) were the only U.S. airlines to go international before the 1940s. With the introduction of the Boeing 247 and
Douglas DC-3 The Douglas DC-3 is a propeller-driven airliner manufactured by the Douglas Aircraft Company, which had a lasting effect on the airline industry in the 1930s to 1940s and World War II. It was developed as a larger, improved 14-bed sleeper ...
in the 1930s, the U.S. airline industry was generally profitable, even during the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
. This trend continued until the beginning of
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
.


Since 1945

World War II, like World War I, brought new life to the airline industry. Many airlines in the Allied countries were flush from lease contracts to the military, and foresaw a future explosive demand for civil air transport, for both passengers and cargo. They were eager to invest in the newly emerging flagships of air travel such as the Boeing Stratocruiser,
Lockheed Constellation The Lockheed Constellation ("Connie") is a propeller-driven, four-engined airliner built by Lockheed Corporation starting in 1943. The Constellation series was the first civil airliner family to enter widespread use equipped with a pressurized cab ...
, and Douglas DC-6. Most of these new aircraft were based on American bombers such as the
B-29 The Boeing B-29 Superfortress is a retired American four-engined Propeller (aeronautics), propeller-driven heavy bomber, designed by Boeing and flown primarily by the United States during World War II and the Korean War. Named in allusion to ...
, which had spearheaded research into new technologies such as pressurization. Most offered increased efficiency from both added speed and greater payload. In the 1950s, the De Havilland Comet,
Boeing 707 The Boeing 707 is an early American long-range Narrow-body aircraft, narrow-body airliner, the first jetliner developed and produced by Boeing Commercial Airplanes. Developed from the Boeing 367-80 prototype, the initial first flew on Decembe ...
, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Eastern bloc had Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Czechoslovak ČSA, Soviet Aeroflot and East-German Interflug. The Vickers Viscount and Lockheed L-188 Electra inaugurated turboprop transport. On 4 October 1958,
British Overseas Airways Corporation British Overseas Airways Corporation (BOAC) was the United Kingdom, British state-owned national airline created in 1939 by the merger of Imperial Airways and British Airways Ltd. It continued operating overseas services throughout World War II ...
started transatlantic flights between London Heathrow and New York Idlewild with a Comet 4, and Pan Am followed on 26 October with a Boeing 707 service between New York and Paris. The next big boost for the airlines would come in the 1970s, when the
Boeing 747 The Boeing 747 is a long-range wide-body aircraft, wide-body airliner designed and manufactured by Boeing Commercial Airplanes in the United States between 1968 and 2023. After the introduction of the Boeing 707, 707 in October 1958, Pan Am ...
, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated widebody ("jumbo jet") service, which is still the standard in international travel. The Tupolev Tu-144 and its Western counterpart, Concorde, made supersonic travel a reality. Concorde first flew in 1969 and operated through 2003. In 1972,
Airbus Airbus SE ( ; ; ; ) is a Pan-European aerospace corporation. The company's primary business is the design and manufacturing of commercial aircraft but it also has separate Airbus Defence and Space, defence and space and Airbus Helicopters, he ...
began producing Europe's most commercially successful line of airliners to date. The added efficiencies for these aircraft were often not in speed, but in passenger capacity, payload, and range. Airbus also features modern electronic cockpits that were common across their aircraft to enable pilots to fly multiple models with minimal cross-training.


Deregulation

The 1978 U.S. airline industry deregulation lowered federally controlled barriers for new airlines just as a downturn in the nation's economy occurred. New start-ups entered during the downturn, during which time they found aircraft and funding, contracted hangar and maintenance services, trained new employees, and recruited laid-off staff from other airlines. Major airlines dominated their routes through aggressive pricing and additional capacity offerings, often swamping new start-ups. In the place of high barriers to entry imposed by regulation, the major airlines implemented an equally high barrier called loss leader pricing. In this strategy an already established and dominant airline stomps out its competition by lowering airfares on specific routes, below the cost of operating on it, choking out any chance a start-up airline may have. The industry side effect is an overall drop in revenue and service quality. Since deregulation in 1978 the average domestic ticket price has dropped by 40%. So has airline employee pay. By incurring massive losses, the airlines of the USA now rely upon a scourge of cyclical Chapter 11 bankruptcy proceedings to continue doing business. America West Airlines (which has since merged with US Airways) remained a significant survivor from this new entrant era, as dozens, even hundreds, have gone under. In many ways, the biggest winner in the deregulated environment was the air passenger. Although not exclusively attributable to deregulation, indeed the U.S. witnessed an explosive growth in demand for air travel. Many millions who had never or rarely flown before became regular fliers, even joining frequent flyer loyalty programs and receiving free flights and other benefits from their flying. New services and higher frequencies meant that business fliers could fly to another city, do business, and return the same day, from almost any point in the country. Air travel's advantages put long-distance intercity
railroad Rail transport (also known as train transport) is a means of transport using wheeled vehicles running in railway track, tracks, which usually consist of two parallel steel railway track, rails. Rail transport is one of the two primary means of ...
travel and bus lines under pressure, with most of the latter having withered away, whilst the former is still protected under
nationalization Nationalization (nationalisation in British English) is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...
through the continuing existence of
Amtrak The National Railroad Passenger Corporation, Trade name, doing business as Amtrak (; ), is the national Passenger train, passenger railroad company of the United States. It operates intercity rail service in 46 of the 48 contiguous United Stat ...
. By the 1980s, almost half of the total flying in the world took place in the U.S., and today the domestic industry operates over 10,000 daily departures nationwide. Toward the end of the century, a new style of low cost airline emerged, offering a no-frills product at a lower price. Southwest Airlines, JetBlue, AirTran Airways, Skybus Airlines and other low-cost carriers began to represent a serious challenge to the so-called "legacy airlines", as did their low-cost counterparts in many other countries. Their commercial viability represented a serious competitive threat to the legacy carriers. However, of these, ATA and Skybus have since ceased operations. Increasingly since 1978, US airlines have been reincorporated and spun off by newly created and internally led management companies, and thus becoming nothing more than operating units and subsidiaries with limited financially decisive control. Among some of these holding companies and parent companies which are relatively well known, are the UAL Corporation, along with the AMR Corporation, among a long list of airline holding companies sometime recognized worldwide. Less recognized are the private-equity firms which often seize managerial, financial, and
board of directors A board of directors is a governing body that supervises the activities of a business, a nonprofit organization, or a government agency. The powers, duties, and responsibilities of a board of directors are determined by government regulatio ...
control of distressed airline companies by temporarily investing large sums of capital in air carriers, to rescheme an airlines assets into a profitable organization or liquidating an air carrier of their profitable and worthwhile routes and business operations. Thus the last 50 years of the airline industry have varied from reasonably profitable, to devastatingly depressed. As the first major market to deregulate the industry in 1978, U.S. airlines have experienced more turbulence than almost any other country or region. In fact, no U.S. legacy carrier survived bankruptcy-free. Among the outspoken critics of deregulation, former CEO of American Airlines, Robert Crandall has publicly stated: "Chapter 11 bankruptcy protection filing shows airline industry deregulation was a mistake."


Bailout

Congress passed th
Air Transportation Safety and System Stabilization Act
(P.L. 107–42) in response to a severe liquidity crisis facing the already-troubled airline industry in the aftermath of the
September 11 attacks The September 11 attacks, also known as 9/11, were four coordinated Islamist terrorist suicide attacks by al-Qaeda against the United States in 2001. Nineteen terrorists hijacked four commercial airliners, crashing the first two into ...
. Through the ATSB Congress sought to provide cash infusions to carriers for both the cost of the four-day federal shutdown of the airlines and the incremental losses incurred through December 31, 2001, as a result of the terrorist attacks. This resulted in the first government bailout of the 21st century. Between 2000 and 2005 US airlines lost $30 billion with wage cuts of over $15 billion and 100,000 employees laid off. In recognition of the essential national economic role of a healthy aviation system, Congress authorized partial compensation of up to $5 billion in cash subject to review by the U.S. Department of Transportation and up to $10 billion in loan guarantees subject to review by a newly created Air Transportation Stabilization Board (ATSB). The applications to DOT for reimbursements were subjected to rigorous multi-year reviews not only by DOT program personnel but also by the
Government Accountability Office The United States Government Accountability Office (GAO) is an independent, nonpartisan government agency within the legislative branch that provides auditing, evaluative, and investigative services for the United States Congress. It is the s ...
and the DOT Inspector General. Ultimately, the federal government provided $4.6 billion in one-time, subject-to-income-tax cash payments to 427 U.S. air carriers, with no provision for repayment, essentially a gift from the taxpayers. (Passenger carriers operating scheduled service received approximately $4 billion, subject to tax.) In addition, the ATSB approved loan guarantees to six airlines totaling approximately $1.6 billion. Data from the U.S. Treasury Department show that the government recouped the $1.6 billion and a profit of $339 million from the fees, interest and purchase of discounted airline stock associated with loan guarantees. the four largest major carriers controlled 70% of the U.S. passenger market.


Asia

Although
Philippine Airlines Philippine Airlines (PAL) is the flag carrier of the Philippines. Headquartered at the Philippine National Bank, PNB Financial Center in Pasay, the airline was founded in 1941 and is the oldest operating commercial airline in Asia. Philippine ...
(PAL) was officially founded on February 26, 1941, its license to operate as an airliner was derived from merged Philippine Aerial Taxi Company (PATCO) established by mining magnate Emmanuel N. Bachrach on 3 December 1930, making it Asia's oldest scheduled carrier still in operation. Commercial air service commenced three weeks later from
Manila Manila, officially the City of Manila, is the Capital of the Philippines, capital and second-most populous city of the Philippines after Quezon City, with a population of 1,846,513 people in 2020. Located on the eastern shore of Manila Bay on ...
to Baguio, making it Asia's first airline route. Bachrach's death in 1937 paved the way for its eventual merger with Philippine Airlines in March 1941 and made it Asia's oldest airline. It is also the oldest airline in Asia still operating under its current name.Jane,
Jane's airlines & airliners By Jeremy Flack
', First Edition, 2003,
Bachrach's majority share in PATCO was bought by beer magnate Andres R. Soriano in 1939 upon the advice of General
Douglas MacArthur Douglas MacArthur (26 January 18805 April 1964) was an American general who served as a top commander during World War II and the Korean War, achieving the rank of General of the Army (United States), General of the Army. He served with dis ...
and later merged with newly formed Philippine Airlines with PAL as the surviving entity. Soriano has controlling interest in both airlines before the merger. PAL restarted service on 15 March 1941, with a single Beech Model 18 NPC-54 aircraft, which started its daily services between
Manila Manila, officially the City of Manila, is the Capital of the Philippines, capital and second-most populous city of the Philippines after Quezon City, with a population of 1,846,513 people in 2020. Located on the eastern shore of Manila Bay on ...
(from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. In Japan, Japan Air Transport was established in 1928 as the national flag carrier. Upon the completion of Haneda Airport in 1931, it became the airline's hub. The airline initially operated domestic routes such as
Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...
Osaka is a Cities designated by government ordinance of Japan, designated city in the Kansai region of Honshu in Japan. It is the capital of and most populous city in Osaka Prefecture, and the List of cities in Japan, third-most populous city in J ...
and Osaka–
Fukuoka is the List of Japanese cities by population, sixth-largest city in Japan and the capital city of Fukuoka Prefecture, Japan. The city is built along the shores of Hakata Bay, and has been a center of international commerce since ancient times. ...
. In September 1929, it opened its first overseas route, which connected Fukuoka to
Dalian Dalian ( ) is a major sub-provincial port city in Liaoning province, People's Republic of China, and is Liaoning's second largest city (after the provincial capital Shenyang) and the third-most populous city of Northeast China (after Shenyang ...
in the
Kwantung Leased Territory The Kwantung Leased Territory () was a Concessions in China, leased territory of the Empire of Japan in the Liaodong Peninsula from 1905 to 1945. Japan first acquired Kwantung from the Qing dynasty, Qing Empire in perpetuity in 1895 in the Tre ...
via
Seoul Seoul, officially Seoul Special Metropolitan City, is the capital city, capital and largest city of South Korea. The broader Seoul Metropolitan Area, encompassing Seoul, Gyeonggi Province and Incheon, emerged as the world's List of cities b ...
and
Pyongyang Pyongyang () is the Capital city, capital and largest city of North Korea, where it is sometimes labeled as the "Capital of the Revolution" (). Pyongyang is located on the Taedong River about upstream from its mouth on the Yellow Sea. Accordi ...
in Japanese Korea. After Japan established the puppet state of
Manchukuo Manchukuo, officially known as the State of Manchuria prior to 1934 and the Empire of Great Manchuria thereafter, was a puppet state of the Empire of Japan in Northeast China that existed from 1932 until its dissolution in 1945. It was ostens ...
, the airline opened routes to major cities within this territory. The company was reorganised as Japan Airways in 1938. During the Second World War, it operated routes to various Japanese-occupied territories and
Thailand Thailand, officially the Kingdom of Thailand and historically known as Siam (the official name until 1939), is a country in Southeast Asia on the Mainland Southeast Asia, Indochinese Peninsula. With a population of almost 66 million, it spa ...
. The company was dissolved immediately after the war, as civil aviation was prohibited by the Allied Occupation Forces. Civil aviation in Japan did not resume until the founding of Japan Airlines in 1951.
Cathay Pacific Cathay Pacific Airways Limited, or simply Cathay Pacific, is the flag carrier of Hong Kong, with its head office and main airline hub, hub located at Hong Kong International Airport. The airline's operations and its subsidiaries have schedule ...
was one of the first airlines to be launched among the other Asian countries in 1946. The license to operate as an airliner was granted by the federal government body after reviewing the necessity at the national assembly. The
Hanjin The Hanjin Group () is a South Korean chaebol. The group has various industries covered from transportation and airlines to hotels, tourism, and airport businesses, and is one of the largest chaebols in Korea. The group includes Korean Air (KA ...
occupies the largest ownership of Korean Air as well as few low-budget airlines as of now. Korean Air is one of the four founders of SkyTeam, which was established in 2000.
Asiana Airlines Asiana Airlines Inc. ( ) is a South Korean airline headquartered in Seoul.Home
." Asiana Airlines. Retrieved 13 September 2 ...
, launched in 1988, joined
Star Alliance Star Alliance is an airline alliance headquartered in Frankfurt, Germany. Founded on 14 May 1997, it was the world's first global airline alliance. Star Alliance has 25 member airlines that operate a combined fleet of over 5,000 aircraft, servi ...
in 2003. Korean Air and Asiana Airlines comprise one of the largest combined airline miles and number of passenger served at the regional market of Asian airline industry
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
was also one of the first countries to embrace civil aviation. One of the first Asian airline companies was Air India, which was founded as Tata Airlines in 1932, a division of Tata Sons Ltd. (now
Tata Group The Tata Group () is an Indian multinational conglomerate group of companies headquartered in Mumbai. Established in 1868, it is India's largest business conglomerate, with products and services in over 160 countries, and operations in 100 c ...
). The airline was founded by India's leading industrialist, JRD Tata. On 15 October 1932, J. R. D. Tata himself flew a single engined De Havilland Puss Moth carrying air mail (postal mail of Imperial Airways) from
Karachi Karachi is the capital city of the Administrative units of Pakistan, province of Sindh, Pakistan. It is the List of cities in Pakistan by population, largest city in Pakistan and 12th List of largest cities, largest in the world, with a popul ...
to
Bombay Mumbai ( ; ), also known as Bombay ( ; its official name until 1995), is the capital city of the Indian States and union territories of India, state of Maharashtra. Mumbai is the financial centre, financial capital and the list of cities i ...
via Ahmedabad. The aircraft continued to
Madras Chennai, also known as Madras ( its official name until 1996), is the capital and largest city of Tamil Nadu, the southernmost state of India. It is located on the Coromandel Coast of the Bay of Bengal. According to the 2011 Indian ce ...
via Bellary piloted by
Royal Air Force The Royal Air Force (RAF) is the Air force, air and space force of the United Kingdom, British Overseas Territories and Crown Dependencies. It was formed towards the end of the World War I, First World War on 1 April 1918, on the merger of t ...
pilot Nevill Vintcent. Tata Airlines was also one of the world's first major airlines which began its operations without any support from the Government. With the outbreak of World War II, the airline presence in Asia came to a relative halt, with many new flag carriers donating their aircraft for military aid and other uses. Following the end of the war in 1945, regular commercial service was restored in India and Tata Airlines became a public limited company on 29 July 1946, under the name Air India. After the
independence of India The Indian independence movement was a series of historic events in South Asia with the ultimate aim of ending British Raj, British colonial rule. It lasted until 1947, when the Indian Independence Act 1947 was passed. The first nationalistic ...
, 49% of the airline was acquired by the
Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...
. In return, the airline was granted status to operate international services from India as the designated flag carrier under the name Air India International. On 31 July 1946, a chartered Philippine Airlines (PAL) DC-4 ferried 40 American servicemen to Oakland,
California California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...
, from Nielson Airport in Makati with stops in
Guam Guam ( ; ) is an island that is an Territories of the United States, organized, unincorporated territory of the United States in the Micronesia subregion of the western Pacific Ocean. Guam's capital is Hagåtña, Guam, Hagåtña, and the most ...
, Wake Island,
Johnston Atoll Johnston Atoll is an Unincorporated territories of the United States, unincorporated territory of the United States, under the jurisdiction of the United States Air Force (USAF). The island is closed to public entry, and limited access for mana ...
and
Honolulu Honolulu ( ; ) is the List of capitals in the United States, capital and most populous city of the U.S. state of Hawaii, located in the Pacific Ocean. It is the county seat of the Consolidated city-county, consolidated City and County of Honol ...
,
Hawaii Hawaii ( ; ) is an island U.S. state, state of the United States, in the Pacific Ocean about southwest of the U.S. mainland. One of the two Non-contiguous United States, non-contiguous U.S. states (along with Alaska), it is the only sta ...
, making PAL the first Asian airline to cross the
Pacific Ocean The Pacific Ocean is the largest and deepest of Earth's five Borders of the oceans, oceanic divisions. It extends from the Arctic Ocean in the north to the Southern Ocean, or, depending on the definition, to Antarctica in the south, and is ...
. A regular service between
Manila Manila, officially the City of Manila, is the Capital of the Philippines, capital and second-most populous city of the Philippines after Quezon City, with a population of 1,846,513 people in 2020. Located on the eastern shore of Manila Bay on ...
and
San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...
was started in December. It was during this year that the airline was designated as the flag carrier of Philippines. During the era of
decolonization Decolonization is the undoing of colonialism, the latter being the process whereby Imperialism, imperial nations establish and dominate foreign territories, often overseas. The meanings and applications of the term are disputed. Some scholar ...
, newly born Asian countries started to embrace air transport. Among the first Asian carriers during the era were
Cathay Pacific Cathay Pacific Airways Limited, or simply Cathay Pacific, is the flag carrier of Hong Kong, with its head office and main airline hub, hub located at Hong Kong International Airport. The airline's operations and its subsidiaries have schedule ...
of
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
(founded in September 1946), Orient Airways (later Pakistan International Airlines; founded in October 1946), Air Ceylon (later SriLankan Airlines; founded in 1947), Malayan Airways Limited in 1947 (later
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
and Malaysia Airlines), El Al in
Israel Israel, officially the State of Israel, is a country in West Asia. It Borders of Israel, shares borders with Lebanon to the north, Syria to the north-east, Jordan to the east, Egypt to the south-west, and the Mediterranean Sea to the west. Isr ...
in 1948, Garuda Indonesia in 1949, Thai Airways in 1960, and Korean National Airlines in 1947.


Latin America and Caribbean

Among the first countries to have regular airlines in Latin America and the Caribbean were
Bolivia Bolivia, officially the Plurinational State of Bolivia, is a landlocked country located in central South America. The country features diverse geography, including vast Amazonian plains, tropical lowlands, mountains, the Gran Chaco Province, w ...
with Lloyd Aéreo Boliviano,
Cuba Cuba, officially the Republic of Cuba, is an island country, comprising the island of Cuba (largest island), Isla de la Juventud, and List of islands of Cuba, 4,195 islands, islets and cays surrounding the main island. It is located where the ...
with Cubana de Aviación,
Colombia Colombia, officially the Republic of Colombia, is a country primarily located in South America with Insular region of Colombia, insular regions in North America. The Colombian mainland is bordered by the Caribbean Sea to the north, Venezuel ...
with Avianca (the first airline established in the Americas), Argentina with Aerolíneas Argentinas,
Chile Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...
with LAN Chile (today LATAM Airlines),
Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
with Varig, the
Dominican Republic The Dominican Republic is a country located on the island of Hispaniola in the Greater Antilles of the Caribbean Sea in the Atlantic Ocean, North Atlantic Ocean. It shares a Maritime boundary, maritime border with Puerto Rico to the east and ...
with Dominicana de Aviación,
Mexico Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
with Mexicana de Aviación,
Trinidad and Tobago Trinidad and Tobago, officially the Republic of Trinidad and Tobago, is the southernmost island country in the Caribbean, comprising the main islands of Trinidad and Tobago, along with several List of islands of Trinidad and Tobago, smaller i ...
with BWIA West Indies Airways (today Caribbean Airlines),
Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many Federal Dependencies of Venezuela, islands and islets in the Caribbean Sea. It com ...
with Aeropostal,
Puerto Rico ; abbreviated PR), officially the Commonwealth of Puerto Rico, is a Government of Puerto Rico, self-governing Caribbean Geography of Puerto Rico, archipelago and island organized as an Territories of the United States, unincorporated territo ...
with Puertorriquena; and TACA based in
El Salvador El Salvador, officially the Republic of El Salvador, is a country in Central America. It is bordered on the northeast by Honduras, on the northwest by Guatemala, and on the south by the Pacific Ocean. El Salvador's capital and largest city is S ...
and representing several airlines of
Central America Central America is a subregion of North America. Its political boundaries are defined as bordering Mexico to the north, Colombia to the southeast, the Caribbean to the east, and the Pacific Ocean to the southwest. Central America is usually ...
(
Costa Rica Costa Rica, officially the Republic of Costa Rica, is a country in Central America. It borders Nicaragua to the north, the Caribbean Sea to the northeast, Panama to the southeast, and the Pacific Ocean to the southwest, as well as Maritime bo ...
,
Guatemala Guatemala, officially the Republic of Guatemala, is a country in Central America. It is bordered to the north and west by Mexico, to the northeast by Belize, to the east by Honduras, and to the southeast by El Salvador. It is hydrologically b ...
,
Honduras Honduras, officially the Republic of Honduras, is a country in Central America. It is bordered to the west by Guatemala, to the southwest by El Salvador, to the southeast by Nicaragua, to the south by the Pacific Ocean at the Gulf of Fonseca, ...
and
Nicaragua Nicaragua, officially the Republic of Nicaragua, is the geographically largest Sovereign state, country in Central America, comprising . With a population of 7,142,529 as of 2024, it is the third-most populous country in Central America aft ...
). All the previous airlines started regular operations well before
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
. Puerto Rican commercial airlines such as Prinair, Oceanair, Fina Air and
Vieques Air Link Vieques Air Link (VAL, IATA code: V4) is a small VFR (Visual Flight Rules) Puerto Rico-based airline that operates under FAR Part 135, that links Vieques, Puerto Rico, Vieques and Culebra, Puerto Rico, Culebra with mainland Puerto Rico. Hist ...
came much after the second world war, as did several others from other countries like Mexico's Interjet and Volaris, Venezuela's Aserca Airlines and others. The air travel market has evolved rapidly over recent years in
Latin America Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
. Some industry estimates indicated in 2011 that over 2,000 new aircraft will begin service over the next five years in this region. These airlines serve domestic flights within their countries, as well as connections within Latin America and also overseas flights to North America, Europe, Australia, and Asia. Only four airline groups – Avianca, Panama's Copa, Mexico's Volaris, and LATAM Airlines – have international subsidiaries and cover many destinations within the Americas as well as major hubs in other continents. LATAM with
Chile Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...
as the central operation along with
Peru Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...
,
Ecuador Ecuador, officially the Republic of Ecuador, is a country in northwestern South America, bordered by Colombia on the north, Peru on the east and south, and the Pacific Ocean on the west. It also includes the Galápagos Province which contain ...
,
Colombia Colombia, officially the Republic of Colombia, is a country primarily located in South America with Insular region of Colombia, insular regions in North America. The Colombian mainland is bordered by the Caribbean Sea to the north, Venezuel ...
,
Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
and
Argentina Argentina, officially the Argentine Republic, is a country in the southern half of South America. It covers an area of , making it the List of South American countries by area, second-largest country in South America after Brazil, the fourt ...
and formerly with some operations in the
Dominican Republic The Dominican Republic is a country located on the island of Hispaniola in the Greater Antilles of the Caribbean Sea in the Atlantic Ocean, North Atlantic Ocean. It shares a Maritime boundary, maritime border with Puerto Rico to the east and ...
. The Avianca group has its main operation in Colombia based around the hub in
Bogotá Bogotá (, also , , ), officially Bogotá, Distrito Capital, abbreviated Bogotá, D.C., and formerly known as Santa Fe de Bogotá (; ) during the Spanish Imperial period and between 1991 and 2000, is the capital city, capital and largest city ...
, Colombia, as well as subsidiaries in various Latin American countries with hubs in San Salvador, El Salvador, as well as
Lima Lima ( ; ), founded in 1535 as the Ciudad de los Reyes (, Spanish for "City of Biblical Magi, Kings"), is the capital and largest city of Peru. It is located in the valleys of the Chillón River, Chillón, Rímac River, Rímac and Lurín Rive ...
, Peru, with a smaller operation in Ecuador. Copa has subsidiaries Copa Airlines Colombia and Wingo, both in Colombia, while Volaris of Mexico has Volaris Costa Rica and Volaris El Salvador, and the Irelandia group formerly included Viva Aerobus of Mexico, Viva Colombia and Viva Air Peru.


Regulation


National

Many countries have national airlines that the government owns and operates. Fully private airlines are subject to much government regulation for economic, political, and safety concerns. For instance, governments often intervene to halt airline labor actions to protect the free flow of people, communications, and goods between different regions without compromising safety. The United States, Australia, and to a lesser extent Brazil, Mexico, India, the United Kingdom, and Japan have "deregulated" their airlines. In the past, these governments dictated airfares, route networks, and other operational requirements for each airline. Since deregulation, airlines have been largely free to negotiate their own operating arrangements with different airports, enter and exit routes easily, and to levy airfares and supply flights according to market demand. The entry barriers for new airlines are lower in a deregulated market, and so the U.S. has seen hundreds of airlines start up (sometimes for only a brief operating period). This has produced far greater competition than before deregulation in most markets. The added competition, together with pricing freedom, means that new entrants often take market share with highly reduced rates that, to a limited degree, full service airlines must match. This is a major constraint on profitability for established carriers, which tend to have a higher cost base. As a result, profitability in a deregulated market is uneven for most airlines. These forces have caused some major airlines to go out of business, in addition to most of the poorly established new entrants. In the United States, the airline industry is dominated by four large firms. Because of industry consolidation, after fuel prices dropped considerably in 2015, very little of the savings were passed on to consumers.


International

Groups such as the
International Civil Aviation Organization The International Civil Aviation Organization (ICAO ) is a specialized agency of the United Nations that coordinates the principles and techniques of international air navigation, and fosters the planning and development of international sch ...
establish worldwide standards for safety and other vital concerns. Most international air traffic is regulated by bilateral agreements between countries, which designate specific carriers to operate on specific routes. The model of such an agreement was the Bermuda Agreement between the US and UK following World War II, which designated airports to be used for transatlantic flights and gave each government the authority to nominate carriers to operate routes. Bilateral agreements are based on the " freedoms of the air", a group of generalized traffic rights ranging from the freedom to overfly a country to the freedom to provide domestic flights within a country (a very rarely granted right known as cabotage). Most agreements permit airlines to fly from their home country to designated airports in the other country: some also extend the freedom to provide continuing service to a third country, or to another destination in the other country while carrying passengers from overseas. In the 1990s, " open skies" agreements became more common. These agreements take many of these regulatory powers from state governments and open up international routes to further competition. Open skies agreements have met some criticism, particularly within the European Union, whose airlines would be at a comparative disadvantage with the United States' because of cabotage restrictions.


Economy

In 2017, 4.1 billion passengers have been carried by airlines in 41.9 million commercial scheduled flights (an average payload of passengers), for 7.75 trillion passenger kilometres (an average trip of km) over 45,091 airline routes served globally. In 2016, air transport generated $704.4 billion of revenue in 2016, employed 10.2 million workers, supported 65.5 million jobs and $2.7 trillion of economic activity: 3.6% of the global GDP. In July 2016, the total weekly airline capacity was 181.1 billion Available Seat Kilometers (+6.9% compared to July 2015): 57.6bn in Asia-Pacific, 47.7bn in Europe, 46.2bn in North America, 12.2bn in Middle East, 12.0bn in Latin America and 5.4bn in Africa.


Costs

Airlines have substantial fixed and operating costs to establish and maintain air services: labor, fuel, airplanes, engines, spares and parts, IT services and networks, airport equipment, airport handling services, booking commissions, advertising, catering, training,
aviation insurance Aviation insurance is insurance coverage geared specifically to the operation of aircraft and the risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation and tend to incorporat ...
and other costs. Thus all but a small percentage of the income from ticket sales is paid out to a wide variety of external providers or internal cost centers. Moreover, the industry is structured so that airlines often act as tax collectors. Airline fuel is untaxed because of a series of treaties existing between countries. Ticket prices include a number of fees, taxes and surcharges beyond the control of airlines. Airlines are also responsible for enforcing government regulations. If airlines carry passengers without proper documentation on an international flight, they are responsible for returning them back to the original country. Analysis of the 1992–1996 period shows that every player in the air transport chain is far more profitable than the airlines, who collect and pass through fees and revenues to them from ticket sales. While airlines as a whole earned 6% return on capital employed (2–3.5% less than the cost of capital), airports earned 10%, catering companies 10–13%, handling companies 11–14%, aircraft lessors 15%, aircraft manufacturers 16%, and global distribution companies more than 30%. There has been continuing cost competition from low cost airlines. Many companies emulate Southwest Airlines in various respects. The lines between full-service and low-cost airlines have become blurred – e.g., with most "full service" airlines introducing baggage check fees despite Southwest not doing so. Many airlines in the U.S. and elsewhere have experienced business difficulty. U.S. airlines that have declared
Chapter 11 Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...
bankruptcy since 1990 have included
American Airlines American Airlines, Inc. is a major airlines of the United States, major airline in the United States headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex, and is the Largest airlines in the world, largest airline in the ...
, Continental Airlines (twice),
Delta Air Lines Delta Air Lines, Inc. is a Major airlines of the United States, major airline in the United States headquartered in Atlanta, Georgia (U.S. state), Georgia, operating nine hubs, with Hartsfield–Jackson Atlanta International Airport being its ...
,
Northwest Airlines Northwest Airlines (often abbreviated as NWA) was a major airline in the United States that operated from 1926 until it Delta Air Lines–Northwest Airlines merger, merged with Delta Air Lines in 2010. The merger made Delta the largest airline ...
, Pan Am,
United Airlines United Airlines, Inc. is a Major airlines of the United States, major airline in the United States headquartered in Chicago, Chicago, Illinois that operates an extensive domestic and international route network across the United States and six ...
and
US Airways US Airways was a major airline in the United States. It was originally founded in History of aviation in Pittsburgh, Pittsburgh as a mail delivery airline called All American Aviation, which soon became a commercial passenger airline. In 1953, it ...
(twice). Where an airline has established an engineering base at an airport, then there may be considerable economic advantages in using that same airport as a preferred focus (or "hub") for its scheduled flights. Fuel hedging is a contractual tool used by transportation companies like airlines to reduce their exposure to volatile and potentially rising fuel costs. Several low-cost carriers such as Southwest Airlines adopt this practice. Southwest is credited with maintaining strong business profits between 1999 and the early 2000s due to its fuel hedging policy. Many other airlines are replicating Southwest's hedging policy to control their fuel costs. Operating costs for US major airlines are primarily aircraft operating expense including
jet fuel Jet fuel or aviation turbine fuel (ATF, also abbreviated avtur) is a type of aviation fuel designed for use in aircraft powered by Gas turbine, gas-turbine engines. It is colorless to straw-colored in appearance. The most commonly used fuels for ...
, aircraft maintenance,
depreciation In accountancy, depreciation refers to two aspects of the same concept: first, an actual reduction in the fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wears, and second, the allocation i ...
and aircrew for 44%, servicing expense for 29% (traffic 11%, passenger 11% and aircraft 7%), 14% for reservations and sales and 13% for overheads (administration 6% and advertising 2%). An average US major
Boeing 757 The Boeing 757 is an American Narrow-body aircraft, narrow-body airliner designed and built by Boeing Commercial Airplanes. The then-named 7N7, a twinjet successor for the trijet Boeing 727, 727, received its first orders in August 1978. The ...
-200 flies stages 11.3 block hours per day and costs $2,550 per block hour: $923 of ownership, $590 of maintenance, $548 of fuel and $489 of crew; or $13.34 per 186 seats per block hour. For a Boeing 737-500, a low-cost carrier like Southwest have lower operating costs at $1,526 than a full service one like United at $2,974, and higher
productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proce ...
with 399,746 ASM per day against 264,284, resulting in a unit cost of $cts/ASM against $cts/ASM. McKinsey observes that "newer technology, larger aircraft, and increasingly efficient operations continually drive down the cost of running an airline", from nearly 40 US cents per ASK at the beginning of the jet age, to just above 10 cents since 2000. Those improvements were passed onto the customer due to high competition: fares have been falling throughout the history of airlines.


Revenue

Airlines assign prices to their services in an attempt to maximize profitability. The pricing of airline tickets has become increasingly complicated over the years and is now largely determined by computerized yield management systems. Because of the complications in scheduling flights and maintaining profitability, airlines have many loopholes that can be used by the knowledgeable traveler. Many of these airfare secrets are becoming more and more known to the general public, so airlines are forced to make constant adjustments. Most airlines use differentiated pricing, a form of price discrimination, to sell air services at varying prices simultaneously to different segments. Factors influencing the price include the days remaining until departure, the booked load factor, the forecast of total demand by price point, competitive pricing in force, and variations by day of week of departure and by time of day. Carriers often accomplish this by dividing each cabin of the aircraft (first, business and economy) into a number of travel classes for pricing purposes. A complicating factor is that of origin-destination control ("O&D control"). Someone purchasing a ticket from Melbourne to Sydney (as an example) for A$200 is competing with someone else who wants to fly Melbourne to Los Angeles through Sydney on the same flight, and who is willing to pay A$1400. Should the airline prefer the $1400 passenger, or the $200 passenger plus a possible Sydney-Los Angeles passenger willing to pay $1300? Airlines have to make hundreds of thousands of similar pricing decisions daily. The advent of advanced computerized reservations systems in the late 1970s, most notably
Sabre A sabre or saber ( ) is a type of backsword with a curved blade associated with the light cavalry of the Early Modern warfare, early modern and Napoleonic period, Napoleonic periods. Originally associated with Central European cavalry such a ...
, allowed airlines to easily perform cost-benefit analyses on different pricing structures, leading to almost perfect price discrimination in some cases (that is, filling each seat on an aircraft at the highest price that can be charged without driving the consumer elsewhere). The intense nature of airfare pricing has led to the term " fare war" to describe efforts by airlines to undercut other airlines on competitive routes. Through computers, new airfares can be published quickly and efficiently to the airlines' sales channels. For this purpose the airlines use the Airline Tariff Publishing Company (ATPCO), who distribute latest fares for more than 500 airlines to Computer Reservation Systems across the world. The extent of these pricing phenomena is strongest in "legacy" carriers. In contrast, low fare carriers usually offer pre-announced and simplified price structure, and sometimes quote prices for each leg of a trip separately. Computers also allow airlines to predict, with some accuracy, how many passengers will actually fly after making a reservation to fly. This allows airlines to overbook their flights enough to fill the aircraft while accounting for "no-shows", but not enough (in most cases) to force paying passengers off the aircraft for lack of seats, stimulative pricing for low demand flights coupled with overbooking on high demand flights can help reduce this figure. This is especially crucial during tough economic times as airlines undertake massive cuts to ticket prices to retain demand. Over January/February 2018, the cheapest airline surveyed by price comparator rome2rio was now-defunct Tigerair Australia with $0.06/km followed by AirAsia X with $0.07/km, while the most expensive was Charterlines, Inc. with $1.26/km followed by Buddha Air with $1.18/km. For the
IATA The International Air Transport Association (IATA ) is an airline trade association founded in 1945. IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organized tariff conferences tha ...
, the global airline industry
revenue In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...
was $754 billion in 2017 for a $38.4 billion collective
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
, and should rise by 10.7% to $834 billion in 2018 for a $33.8 billion profit forecast, down by 12% due to rising
jet fuel Jet fuel or aviation turbine fuel (ATF, also abbreviated avtur) is a type of aviation fuel designed for use in aircraft powered by Gas turbine, gas-turbine engines. It is colorless to straw-colored in appearance. The most commonly used fuels for ...
and labor costs. The demand for air transport will be less
elastic Elastic is a word often used to describe or identify certain types of elastomer, Elastic (notion), elastic used in garments or stretch fabric, stretchable fabrics. Elastic may also refer to: Alternative name * Rubber band, ring-shaped band of rub ...
for longer flights than for shorter flights, and more elastic for leisure travel than for business travel. Airlines often have a strong
seasonality In time series data, seasonality refers to the trends that occur at specific regular intervals less than a year, such as weekly, monthly, or quarterly. Seasonality may be caused by various factors, such as weather, vacation, and holidays and consi ...
, with traffic low in winter and peaking in summer. In Europe the most extreme market are the Greek islands with July/August having more than ten times the winter traffic, as Jet2 is the most seasonal among low-cost carriers with July having seven times the January traffic, whereas legacy carriers are much less with only 85/115% variability.


Assets and financing

Airline financing is quite complex, since airlines are highly leveraged operations. Not only must they purchase (or lease) new airliner bodies and engines regularly, they must make major long-term fleet decisions with the goal of meeting the demands of their markets while producing a fleet that is relatively economical to operate and maintain; comparably Southwest Airlines and their reliance on a single airplane type (the
Boeing 737 The Boeing 737 is an American narrow-body aircraft, narrow-body aircraft produced by Boeing at its Boeing Renton Factory, Renton factory in Washington (state), Washington. Developed to supplement the Boeing 727 on short and thin routes, the t ...
and derivatives), with the now defunct
Eastern Air Lines Eastern Air Lines (also colloquially known as Eastern) was a major airline in the United States that operated from 1926 to 1991. Before its dissolution, it was headquartered at Miami International Airport in an unincorporated area of Miami-Dade ...
which operated 17 different aircraft types, each with varying pilot, engine, maintenance, and support needs. A second financial issue is that of hedging oil and
fuel A fuel is any material that can be made to react with other substances so that it releases energy as thermal energy or to be used for work (physics), work. The concept was originally applied solely to those materials capable of releasing chem ...
purchases, which are usually second only to labor in its relative cost to the company. However, with the current high fuel prices it has become the largest cost to an airline. Legacy airlines, compared with new entrants, have been hit harder by rising fuel prices partly due to the running of older, less fuel efficient aircraft. While hedging instruments can be expensive, they can easily pay for themselves many times over in periods of increasing fuel costs, such as in the 2000–2005 period. In view of the congestion apparent at many international
airport An airport is an aerodrome with extended facilities, mostly for commercial Aviation, air transport. They usually consist of a landing area, which comprises an aerially accessible open space including at least one operationally active surf ...
s, the ownership of slots at certain airports (the right to take-off or land an aircraft at a particular time of day or night) has become a significant tradable asset for many airlines. Clearly take-off slots at popular times of the day can be critical in attracting the more profitable business traveler to a given airline's flight and in establishing a competitive advantage against a competing airline. If a particular city has two or more airports, market forces will tend to attract the less profitable routes, or those on which competition is weakest, to the less congested airport, where slots are likely to be more available and therefore cheaper. For example, Reagan National Airport attracts profitable routes due partly to its congestion, leaving less-profitable routes to Baltimore-Washington International Airport and Dulles International Airport. Other factors, such as surface transport facilities and onward connections, will also affect the relative appeal of different airports and some long-distance flights may need to operate from the one with the longest runway. For example, LaGuardia Airport is the preferred airport for most of
Manhattan Manhattan ( ) is the most densely populated and geographically smallest of the Boroughs of New York City, five boroughs of New York City. Coextensive with New York County, Manhattan is the County statistics of the United States#Smallest, larg ...
due to its proximity, while long-distance routes must use John F. Kennedy International Airport's longer runways.


Airline alliances

The first
airline alliance An airline alliance is an aviation industry arrangement between two or more airlines agreeing to cooperate on a substantial level. Alliances may provide marketing branding to facilitate travelers making inter-airline codeshare agreement, codeshare ...
was formed in the 1930s when Pan Am and its subsidiary, Panair do Brasil, agreed to codeshare routes in Latin America when they overlapped with each other. Codesharing involves one airline selling tickets for another airline's flights under its own airline code. An early example of this was Japan Airlines' (JAL) codesharing partnership with Aeroflot in the 1960s on
Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...
Moscow Moscow is the Capital city, capital and List of cities and towns in Russia by population, largest city of Russia, standing on the Moskva (river), Moskva River in Central Russia. It has a population estimated at over 13 million residents with ...
flights; Aeroflot operated the flights using Aeroflot aircraft, but JAL sold tickets for the flights as if they were JAL flights. Another example was the AustrianSabena partnership on the
Vienna Vienna ( ; ; ) is the capital city, capital, List of largest cities in Austria, most populous city, and one of Federal states of Austria, nine federal states of Austria. It is Austria's primate city, with just over two million inhabitants. ...
Brussels Brussels, officially the Brussels-Capital Region, (All text and all but one graphic show the English name as Brussels-Capital Region.) is a Communities, regions and language areas of Belgium#Regions, region of Belgium comprising #Municipalit ...
–New York/JFK route during the late '60s, using a Sabena
Boeing 707 The Boeing 707 is an early American long-range Narrow-body aircraft, narrow-body airliner, the first jetliner developed and produced by Boeing Commercial Airplanes. Developed from the Boeing 367-80 prototype, the initial first flew on Decembe ...
with Austrian
livery A livery is an identifying design, such as a uniform, ornament, symbol, or insignia that designates ownership or affiliation, often found on an individual or vehicle. Livery often includes elements of the heraldry relating to the individual or ...
. Since airline reservation requests are often made by city-pair (such as "show me flights from Chicago to Düsseldorf"), an airline that can codeshare with another airline for a variety of routes might be able to be listed as indeed offering a Chicago–
Düsseldorf Düsseldorf is the capital city of North Rhine-Westphalia, the most populous state of Germany. It is the second-largest city in the state after Cologne and the List of cities in Germany with more than 100,000 inhabitants, seventh-largest city ...
flight. The passenger is advised however, that airline no. 1 operates the flight from say Chicago to Amsterdam (for example), and airline no. 2 operates the continuing flight (on a different airplane, sometimes from another terminal) to Düsseldorf. Thus the primary rationale for code sharing is to expand one's service offerings in city-pair terms to increase sales. A more recent development is the
airline alliance An airline alliance is an aviation industry arrangement between two or more airlines agreeing to cooperate on a substantial level. Alliances may provide marketing branding to facilitate travelers making inter-airline codeshare agreement, codeshare ...
, which became prevalent in the late 1990s. These alliances can act as virtual mergers to get around government restrictions. The largest are
Star Alliance Star Alliance is an airline alliance headquartered in Frankfurt, Germany. Founded on 14 May 1997, it was the world's first global airline alliance. Star Alliance has 25 member airlines that operate a combined fleet of over 5,000 aircraft, servi ...
, SkyTeam and
Oneworld Oneworld (Computer reservations system, CRS: *O, stylised as oneworld) is a global airline alliance consisting of 14 member airlines. It was founded on 1 February 1999. The alliance's stated objective is to be the first choice airline alliance f ...
, and these accounted for over 60% of global commercial air traffic . Alliances of airlines coordinate their passenger service programs (such as lounges and
frequent-flyer program A frequent-flyer programme (FFP) is a loyalty program offered by an airline. Many airlines have frequent-flyer programmes designed to encourage airline customers enrolled in the programme to accumulate points (also called miles, kilometres, ...
s), offer special interline tickets and often engage in extensive codesharing (sometimes systemwide). These are increasingly integrated business combinations—sometimes including cross-equity arrangements—in which products, service standards, schedules, and airport facilities are standardized and combined for higher efficiency. One of the first airlines to start an alliance with another airline was KLM, who partnered with
Northwest Airlines Northwest Airlines (often abbreviated as NWA) was a major airline in the United States that operated from 1926 until it Delta Air Lines–Northwest Airlines merger, merged with Delta Air Lines in 2010. The merger made Delta the largest airline ...
. Both airlines later entered the SkyTeam alliance after the fusion of KLM and Air France in 2004. Often the companies combine IT operations, or purchase fuel and aircraft as a bloc to achieve higher bargaining power. However, the alliances have been most successful at purchasing invisible supplies and services, such as fuel. Airlines usually prefer to purchase items visible to their passengers to differentiate themselves from local competitors. If an airline's main domestic competitor flies Boeing airliners, then the airline may prefer to use Airbus aircraft regardless of what the rest of the alliance chooses.


Largest airlines

The world's largest airlines can be defined in several ways. , American Airlines Group was the largest by fleet size, passengers carried and
revenue passenger mile A passenger is a person who travels in a vehicle, but does not bear any responsibility for the tasks required for that vehicle to arrive at its destination or otherwise operate the vehicle, and is not a steward. The vehicles may be bicycles, ...
.
Delta Air Lines Delta Air Lines, Inc. is a Major airlines of the United States, major airline in the United States headquartered in Atlanta, Georgia (U.S. state), Georgia, operating nine hubs, with Hartsfield–Jackson Atlanta International Airport being its ...
was the largest by
revenue In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...
,
asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...
s value and
market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...
. Lufthansa Group was the largest by number of
employee Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a cor ...
s,
FedEx Express FedEx Express is a major American cargo airline based in Memphis, Tennessee, United States. As of 2023, it is the world's List of largest airlines, largest cargo airline in terms of fleet size and freight tons flown. It is the namesake and leadi ...
by freight tonne-kilometres,
Turkish Airlines Turkish Airlines (Turkish language, Turkish: ''Türk Hava Yolları''), or legally Türk Hava Yolları Anonim Ortaklığı, is the flag carrier of Turkey. , it operates scheduled services to 352 destinations (including cargo) in Europe, Asia, Oce ...
by number of countries served and UPS Airlines by number of destinations served (though
United Airlines United Airlines, Inc. is a Major airlines of the United States, major airline in the United States headquartered in Chicago, Chicago, Illinois that operates an extensive domestic and international route network across the United States and six ...
was the largest passenger airline by number of destinations served).


State support

Historically, air travel has survived largely through state support, whether in the form of equity or subsidies. The airline industry as a whole has made a cumulative loss during its 100-year history. One argument is that positive externalities, such as higher growth due to global mobility, outweigh the microeconomic losses and justify continuing government intervention. A historically high level of government intervention in the airline industry can be seen as part of a wider political consensus on strategic forms of transport, such as
highway A highway is any public or private road or other public way on land. It includes not just major roads, but also other public roads and rights of way. In the United States, it is also used as an equivalent term to controlled-access highway, or ...
s and railways, both of which receive public funding in most parts of the world. Although many countries continue to operate state-owned or parastatal airlines, many large airlines today are privately owned and are therefore governed by microeconomic principles to maximize shareholder profit. In December 1991, the collapse of Pan Am, an airline often credited for shaping the international airline industry, highlighted the financial complexities faced by major airline companies. Following the 1978 deregulation, U.S. carriers did not manage to make an aggregate
profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...
for 12 years in 31, including four years where combined losses amounted to $10 billion, but rebounded with eight consecutive years of profits since 2010, including its four with over $10 billion profits. They drop loss-making routes, avoid fare wars and
market share Market share is the percentage of the total revenue or sales in a Market (economics), market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those ...
battles, limit capacity growth, add hub feed with regional jets to increase their profitability. They change
schedule A schedule (, ) or a timetable, as a basic time-management tool, consists of a list of times at which possible tasks, events, or actions are intended to take place, or of a sequence of events in the chronological order in which such thing ...
s to create more connections, buy used aircraft, reduce international frequencies and leverage
partnership A partnership is an agreement where parties agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations ...
s to optimize capacities and benefit from overseas connectivity.


Environment

Aircraft engines emit
noise pollution Noise pollution, or sound pollution, is the propagation of noise or sound with potential harmful effects on humans and animals. The source of outdoor noise worldwide is mainly caused by machines, transport and propagation systems.Senate Publi ...
, gases and particulate emissions, and contribute to
global dimming Global dimming is a decline in the amount of sunlight reaching the Earth's surface. It is caused by atmospheric particulate matter, predominantly sulfate aerosols, which are components of air pollution. Global dimming was observed soon after t ...
. Growth of the industry in recent years raised a number of ecological questions. Domestic air transport grew in China at 15.5 percent annually from 2001 to 2006. The rate of air travel globally increased at 3.7 percent per year over the same time. In the EU
greenhouse gas emissions Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide (), from burning fossil fuels such as coal, petroleum, oil, and natural gas, is the main cause of climate chan ...
from aviation increased by 87% between 1990 and 2006. However it must be compared with the flights increase, only in UK, between 1990 and 2006 terminal passengers increased from 100 000 thousands to 250 000 thousands., according to AEA reports every year, 750 million passengers travel by European airlines, which also share 40% of merchandise value in and out of Europe. Without even pressure from "green activists", targeting lower ticket prices, generally, airlines do what is possible to cut the fuel consumption (and gas emissions connected therewith). Further, according to some reports, it can be concluded that the last piston-powered aircraft were as fuel-efficient as the average jet in 2005. Despite continuing efficiency improvements from the major aircraft manufacturers, the expanding demand for global air travel has resulted in growing greenhouse gas (GHG) emissions. Currently, the aviation sector, including US domestic and global international travel, make approximately 1.6 percent of global anthropogenic GHG emissions per annum. North America accounts for nearly 40 percent of the world's GHG emissions from aviation fuel use. emissions from the
jet fuel Jet fuel or aviation turbine fuel (ATF, also abbreviated avtur) is a type of aviation fuel designed for use in aircraft powered by Gas turbine, gas-turbine engines. It is colorless to straw-colored in appearance. The most commonly used fuels for ...
burned per passenger on an average airline flight is about 353 kilograms (776 pounds). Loss of natural habitat potential associated with the jet fuel burned per passenger on a airline flight is estimated to be 250 square meters (2700 square feet). In the context of climate change and peak oil, there is a debate about possible taxation of air travel and the inclusion of aviation in an emissions trading scheme, with a view to ensuring that the total external costs of aviation are taken into account. The airline industry is responsible for about 11 percent of
greenhouse gas Greenhouse gases (GHGs) are the gases in the atmosphere that raise the surface temperature of planets such as the Earth. Unlike other gases, greenhouse gases absorb the radiations that a planet emits, resulting in the greenhouse effect. T ...
es emitted by the U.S. transportation sector.
Boeing The Boeing Company, or simply Boeing (), is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide. The company also provides leasing and product support s ...
estimates that
biofuel Biofuel is a fuel that is produced over a short time span from Biomass (energy), biomass, rather than by the very slow natural processes involved in the formation of fossil fuels such as oil. Biofuel can be produced from plants or from agricu ...
s could reduce flight-related greenhouse-gas emissions by 60 to 80 percent. The solution would be blending algae fuels with existing jet fuel: * Boeing and
Air New Zealand Air New Zealand Limited () is the flag carrier of New Zealand. Based in Auckland, the airline operates scheduled passenger flights to 20 domestic and 28 international destinations in 18 countries, primarily within the Pacific Rim. The airline h ...
are collaborating with leading Brazilian biofuel maker Tecbio,
New Zealand New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...
's Aquaflow Bionomic and other jet biofuel developers around the world. * Virgin Atlantic and Virgin Green Fund are looking into the technology as part of a biofuel initiative. * KLM has made the first commercial flight with biofuel in 2009. There are projects on
electric aircraft An electric aircraft is an aircraft powered by electricity. Electric aircraft are seen as a way to reduce the environmental effects of aviation, providing zero emissions and quieter flights. Electricity may be supplied by a variety of methods, ...
, and some of which are fully operational as of 2013.


Call signs

Each operator of a scheduled or charter flight uses an airline call sign when communicating with airports or air traffic control. Most of these call-signs are derived from the airline's trade name, but for reasons of history, marketing, or the need to reduce ambiguity in spoken English (so that pilots do not mistakenly make navigational decisions based on instructions issued to a different aircraft), some airlines and air forces use call-signs less obviously connected with their trading name. For example, British Airways uses a ''Speedbird'' call-sign, named after the logo of one of its predecessors, BOAC, while SkyEurope used ''Relax''.


Personnel

The various types of airline personnel include flight crew, responsible for the operation of the aircraft. Flight crew members include: pilots ( captain and first officer: some older aircraft also required a flight engineer and/or a navigator);
flight attendant A flight attendant is a member of the aircrew whose primary responsibility is ensure the safety of passengers in the cabin of an aircraft across all stages of flight. Their secondary duty is to see to the comfort of passengers. Flight attenda ...
s (led by a
purser A purser is the person on a ship principally responsible for the handling of money on board. On modern merchant ships, the purser is the officer responsible for all administration (including the ship's cargo and passenger manifests) and supply. ...
on larger aircraft); In-flight security personnel on some airlines (most notably El Al) Groundcrew, responsible for operations at airports, include Aerospace and avionics engineers responsible for certifying the aircraft for flight and management of aircraft maintenance;
Aerospace Aerospace is a term used to collectively refer to the atmosphere and outer space. Aerospace activity is very diverse, with a multitude of commercial, industrial, and military applications. Aerospace engineering consists of aeronautics and astron ...
engineers, responsible for airframe, powerplant and electrical systems maintenance;
Avionics Avionics (a portmanteau of ''aviation'' and ''electronics'') are the Electronics, electronic systems used on aircraft. Avionic systems include communications, Air navigation, navigation, the display and management of multiple systems, and the ...
engineers responsible for avionics and instruments maintenance; Airframe and powerplant technicians; Electric System technicians, responsible for maintenance of electrical systems; Flight dispatchers; Baggage handlers; Ramp Agents; Remote centralized weight and balancing; Gate agents; Ticket agents; Passenger service agents (such as airline lounge employees); Reservation agents, usually (but not always) at facilities outside the airport; Crew schedulers. Airlines follow a
corporate A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the state to act as a single entity (a legal entity recognized by private and public law as "born out of s ...
structure where each broad area of operations (such as maintenance, flight operations (including flight safety), and passenger service) is supervised by a vice president. Larger airlines often appoint vice presidents to oversee each of the airline's hubs as well. Airlines employ lawyers to deal with regulatory procedures and other administrative tasks.


Trends

The pattern of ownership has been privatized since the mid-1980s, that is, the ownership has gradually changed from governments to private and individual sectors or organizations. This occurs as regulators permit greater freedom and non-government ownership, in steps that are usually decades apart. This pattern is not seen for all airlines in all regions. Many major airlines operating between the 1940s and 1980s were government-owned or government-established. However, most airlines from the earliest days of air travel in the 1920s and 1930s were personal businesses. Growth rates are not consistent in all regions, but countries with a deregulated airline industry have more competition and greater pricing freedom. This results in lower fares and sometimes dramatic spurts in traffic growth. The U.S., Australia, Canada,
Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
,
Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
,
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
and other markets exhibit this trend. The industry has been observed to be cyclical in its financial performance. Four or five years of poor earnings precede five or six years of improvement. But profitability even in the good years is generally low, in the range of 2–3% net profit after interest and tax. In times of profit, airlines lease new generations of airplanes and upgrade services in response to higher demand. Since 1980, the industry has not earned back the cost of capital during the best of times. Conversely, in bad times losses can be dramatically worse. Warren Buffett in 1999 said "the money that had been made since the dawn of aviation by all of this country's airline companies was zero. Absolutely zero." As in many mature industries, consolidation is a trend. Airline groupings may consist of limited bilateral partnerships, long-term, multi-faceted alliances between carriers, equity arrangements,
mergers Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...
, or
takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are publicly listed, in contrast to the acquisi ...
s. Since governments often restrict ownership and merger between companies in different countries, most consolidation takes place within a country. In the U.S., over 200 airlines have merged, been taken over, or gone out of business since the Airline Deregulation Act in 1978. Many international airline managers are lobbying their governments to permit greater consolidation to achieve higher economy and efficiency.


Types

There are several types of passenger airlines, mainly: * Mainline airlines operate flights by the airline's main operating unit, rather than by regional affiliates or subsidiaries. * Regional airlines, non-"mainline" airlines that operate
regional aircraft A regional airliner, commuter airliner or feeder liner is a small airliner that is designed to fly up to 100 passengers on short-haul flights, usually feeding larger carriers' airline hubs from small markets. This class of airliners is typically ...
; regionals typically operate over shorter non-intercontinental distances, often as feeder services for legacy mainline networks. * Low-cost carriers, giving a "basic", "no-frills" and perceived inexpensive service. * Business class airline, an airline aimed at the business traveler, featuring all business class seating and amenities. * Charter airlines, operating outside regular schedule intervals. * Flag carriers, the historically nationally owned airlines that were considered representative of the country overseas. * Legacy carriers, US carriers that predate the Airline Deregulation Act of 1978. * Major airlines of the United States, airlines with at least $1 billion in revenues. In addition, there are several cargo-only airlines.


See also


Related lists


References


Bibliography

# "A history of the world's airlines", R.E.G. Davies, Oxford U.P, 1964 # "The airline encyclopedia, 1909–2000.” Myron J. Smith, Scarecrow Press, 2002 # "Flying Off Course: The Economics of International Airlines," 3rd edition. Rigas Doganis, Routledge, New York, 2002. # "The Airline Business in the 21st Century." Rigas Doganis, Routledge, New York, 2001.


External links

* * * * {{Authority control Economics of transport and utility industries