An airline is a company that provides
air transport services for traveling
passengers and
freight
Cargo consists of bulk goods conveyed by water, air, or land. In economics, freight is cargo that is transported at a freight rate for commercial gain. ''Cargo'' was originally a shipload but now covers all types of freight, including tran ...
. Airlines use
aircraft
An aircraft is a vehicle that is able to fly by gaining support from the air. It counters the force of gravity by using either static lift or by using the dynamic lift of an airfoil, or in a few cases the downward thrust from jet engine ...
to supply these services and may form
partnership
A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments ...
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 operators.
The
first airline was the German
airship
An airship or dirigible balloon is a type of aerostat or lighter-than-air aircraft that can navigate through the air under its own power. Aerostats gain their lift from a lifting gas that is less dense than the surrounding air.
In early ...
company
DELAG
DELAG, acronym for ''Deutsche Luftschiffahrts-Aktiengesellschaft'' (German for "German Airship Travel Corporation"), was the world's first airline to use an aircraft in revenue service. It operated a fleet of zeppelin rigid airships manufacture ...
, founded on November 16, 1909.
The four oldest non-airship airlines that still exist are the Netherlands'
KLM
KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
(1919),
Colombia's
Avianca
Avianca S.A. ( acronym in Spanish for ''Aerovias del Continente Americano S.A.'', "Airways of the American Continent") is a Colombian airline. It has been the flag carrier of Colombia since December 5, 1919, when it was initially registered und ...
(1919),
Australia's
Qantas
Qantas Airways Limited ( ) is the flag carrier of Australia and the country's largest airline by fleet size, international flights, and international destinations. It is the world's third-oldest airline still in operation, having been founde ...
(1920)
and the Czech Republic's
Czech Airlines
Czech Airlines j.s.c. (abbreviation: ČSA, cz, České Aerolinie, a.s.) is the flag carrier of the Czech Republic. Its head office is located in the Vokovice area of Prague's 6th district and its hub is Václav Havel Airport Prague. The compa ...
(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 (also 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 when ...
following the mid-1980s.
Since the 1980s, there has also been a trend of major airline
mergers and the formation of airline alliances.
The largest alliances are
Star Alliance
Star Alliance is the world's largest global airline alliance. Founded on 14 May 1997, its CEO is Jeffrey Goh and its headquarters is located in Frankfurt am Main, Germany. , Star Alliance is the largest of the three global alliances by passenge ...
,
SkyTeam and
Oneworld
Oneworld (stylised as oneworld; CRS: *O) is an airline alliance founded on 1 February 1999. The alliance's stated objective is to be the first choice airline alliance for the world's frequent international travellers. Its central alliance offic ...
, and these three collectively account for more than 60% of global commercial air traffic in 2015.
Airline alliances coordinate their passenger service programs (such as
lounges and
frequent-flyer programs
A frequent-flyer program (American English) or frequent-flyer programme (British English) is a loyalty program offered by an airline.
Many airlines have frequent-flyer programs designed to encourage airline customers enrolled in the program ...
), offer special
interline tickets and often engage in extensive codesharing (sometimes systemwide).
, the
largest airline
The largest airlines in the world can be defined in several ways. , Delta Air Lines is the largest by revenue, assets value and market capitalization, China Southern Air Holding by passengers carried and revenue passenger mile, American Airlines ...
by passengers carried and fleet size was the
American Airlines Group
American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed on December 9, 2013, by the merger of AMR Corporation, the parent company of American Airlines, and US Airways ...
, while
Delta Air Lines
Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. One of the world's oldest airlines in operation, Delta is headquartered in Atlanta, Georgia. The airline, along w ...
was the largest by
revenue
In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business.
Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...
.
Lufthansa Group
Deutsche Lufthansa AG (), commonly shortened to Lufthansa, is the flag carrier of Germany. When combined with its subsidiaries, it is the second- largest airline in Europe in terms of passengers carried. Lufthansa is one of the five founding ...
was the largest by number of
employees,
FedEx Express
FedEx Express, a subsidiary of FedEx Corporation, is a major American cargo airline based in Memphis, Tennessee, United States. As of 2020, it is one of the world's largest airlines in terms of fleet size and freight tons flown. It is the na ...
by freight
ton-kilometers,
Turkish Airlines
Turkish Airlines ( Turkish: ''Türk Hava Yolları'') is the national flag carrier airline of Turkey. , it operates scheduled services to 340 destinations in Europe, Asia, Africa, and the Americas, making it the largest mainline carrier in the ...
by number of countries served and
UPS Airlines
UPS Airlines is a major American cargo airline based in Louisville, Kentucky. The second-largest cargo airline worldwide ( in terms of freight volume flown), UPS Airlines flies to 815 destinations worldwide. A wholly owned subsidiary of UPS (Unit ...
by number of destinations served
(though
United Airlines
United Airlines, Inc. (commonly referred to as United), is a major American airline headquartered at the Willis Tower in Chicago, Illinois. was the largest passenger airline by number of destinations served).
History
The first airlines
DELAG
DELAG, acronym for ''Deutsche Luftschiffahrts-Aktiengesellschaft'' (German for "German Airship Travel Corporation"), was the world's first airline to use an aircraft in revenue service. It operated a fleet of zeppelin rigid airships manufacture ...
, ''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, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...
. The first
fixed-wing
A fixed-wing aircraft is a heavier-than-air flying machine, such as an airplane, which is capable of flight using wings that generate lift caused by the aircraft's forward airspeed and the shape of the wings. Fixed-wing aircraft are distinct ...
scheduled airline was started on January 1, 1914, from
St. Petersburg, Florida
St. Petersburg is a city in Pinellas County, Florida, United States. As of the 2020 census, the population was 258,308, making it the fifth-most populous city in Florida and the second-largest city in the Tampa Bay Area, after Tampa. It is the ...
, to
Tampa, Florida
Tampa () is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. The city'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 ...
, operated by the
St. Petersburg–Tampa Airboat Line. The four
oldest non-dirigible airlines that still exist are the Netherlands'
KLM
KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
(1919),
Colombia's
Avianca
Avianca S.A. ( acronym in Spanish for ''Aerovias del Continente Americano S.A.'', "Airways of the American Continent") is a Colombian airline. It has been the flag carrier of Colombia since December 5, 1919, when it was initially registered und ...
(1919),
Australia's
Qantas
Qantas Airways Limited ( ) is the flag carrier of Australia and the country's largest airline by fleet size, international flights, and international destinations. It is the world's third-oldest airline still in operation, having been founde ...
(1921),
and the Czech Republic's
Czech Airlines
Czech Airlines j.s.c. (abbreviation: ČSA, cz, České Aerolinie, a.s.) is the flag carrier of the Czech Republic. Its head office is located in the Vokovice area of Prague's 6th district and its hub is Václav Havel Airport Prague. The compa ...
(1923).
Europe
Beginnings
The earliest fixed wing airline in Europe was
Aircraft Transport and Travel, formed by
George Holt Thomas
George Holt Thomas (31 March 1869 – 1 January 1929) aviation industry pioneer and newspaper proprietor. Holt Thomas founded, in 1911, the business which became Aircraft Manufacturing Company Limited or Airco.
Son and grandson of successful ar ...
in 1916; via a series of takeovers and mergers, this company is an ancestor of modern-day
British Airways
British Airways (BA) is the flag carrier airline of the United Kingdom. It is headquartered in London, England, near its main hub at Heathrow Airport.
The airline is the second largest UK-based carrier, based on fleet size and passengers ...
. Using a fleet of former military
Airco DH.4
The Aircraft Manufacturing Company Limited (Airco) was an early British aircraft manufacturer. Established during 1912, it grew rapidly during the First World War, referring to itself as the largest aircraft company in the world by 1918.
Ai ...
A biplanes that had been modified to carry two passengers in the
fuselage
The fuselage (; from the French ''fuselé'' "spindle-shaped") is an aircraft's main body section. It holds crew, passengers, or cargo. In single-engine aircraft, it will usually contain an engine as well, although in some amphibious aircraf ...
, it operated relief flights between
Folkestone and
Ghent
Ghent ( nl, Gent ; french: Gand ; traditional English: Gaunt) is a city and a municipality in the Flemish Region of Belgium. It is the capital and largest city of the East Flanders province, and the third largest in the country, exceeded i ...
. On July 15 , 1919, the company flew a proving flight across the
English Channel
The English Channel, "The Sleeve"; nrf, la Maunche, "The Sleeve" (Cotentinais) or ( Jèrriais), (Guernésiais), "The Channel"; br, Mor Breizh, "Sea of Brittany"; cy, Môr Udd, "Lord's Sea"; kw, Mor Bretannek, "British Sea"; nl, Het Kana ...
, despite a lack of support from the British government. Flown by Lt. H Shaw in an
Airco DH.9 between
RAF Hendon
Hendon is an urban area in the Borough of Barnet, North-West London northwest of Charing Cross. Hendon was an ancient manor and parish in the county of Middlesex and a former borough, the Municipal Borough of Hendon; it has been part of Grea ...
and
Paris – Le Bourget Airport
Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. Si ...
, 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
Hounslow Heath Aerodrome was a grass airfield, operational 1914–1920. It was in the London borough of Hounslow, and hosted the British Empire's first scheduled daily international commercial flights, in 1919. The site today includes the main r ...
to 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
Airmail (or air mail) is a mail transport service branded and sold on the basis of at least one leg of its journey being by air. Airmail items typically arrive more quickly than surface mail, and usually cost more to send. Airmail may be t ...
contract. Six
Royal Air Force
The Royal Air Force (RAF) is the United Kingdom's air and space force. It was formed towards the end of the First World War on 1 April 1918, becoming the first independent air force in the world, by regrouping the Royal Flying Corps (RFC) an ...
Airco DH.9A
The Airco DH.9A was a British single-engined light bomber designed and first used shortly before the end of the First World War. It was a development of the unsuccessful Airco DH.9 bomber, featuring a strengthened structure and, crucially, repla ...
aircraft were lent to the company, to operate the airmail service between
Hawkinge
Hawkinge ( ) is a town and civil parish in the Folkestone and Hythe district of Kent, England. The original village of Hawkinge is actually just less than a mile (c. 1.3 km) due east of the present village centre; the village of Hawkinge ...
and
Cologne
Cologne ( ; german: Köln ; ksh, Kölle ) is the largest city of the German western state of North Rhine-Westphalia (NRW) and the fourth-most populous city of Germany with 1.1 million inhabitants in the city proper and 3.6 millio ...
. In 1920, they were returned to the Royal Air Force.
Other British competitors were quick to follow –
Handley Page Transport
Handley Page Transport Ltd was an airline company founded in 1919, soon after the end of the First World War, by Frederick Handley Page.
The company's first planes were Handley Page Type O/400 bombers modified for passenger use. They flew a Lo ...
was established in 1919 and used the company's converted
wartime Type O/400 bomber
A bomber is a military combat aircraft designed to attack ground and naval targets by dropping air-to-ground weaponry (such as bombs), launching torpedoes, or deploying air-launched cruise missiles. The first use of bombs dropped from an air ...
s with a capacity for 12 passengers, to run a
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
-
Paris
Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), ma ...
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
The Société Générale des Transports Aériens (SGTA) was a French airline founded in 1919. It operated until 1933 when its assets were incorporated in the newly created Air France airline.
History
Initially known as the ''Lignes Aériennes Fa ...
was created in late 1919, by the
Farman
Farman Aviation Works (french: Avions Farman) was a French aircraft company founded and run by the brothers Richard, Henri, and Maurice Farman. They designed and constructed aircraft and engines from 1908 until 1936; during the French national ...
brothers and the
Farman F.60 Goliath plane flew scheduled services from
Toussus-le-Noble
Toussus-le-Noble () is a commune in the Yvelines department in the Île-de-France region in north-central France.
History
In 1969, the communes of Châteaufort and Toussus-le-Noble were separated from the Essonne department and added to Yvelin ...
to
Kenley
Kenley is an area within the London Borough of Croydon. Prior to its incorporation into Greater London in 1965 it was in the historic county of Surrey. It is situated south of Purley, east of Coulsdon, north of Caterham and Whyteleafe and w ...
, near
Croydon
Croydon is a large town in south London, England, south of Charing Cross. Part of the London Borough of Croydon, a local government district of Greater London. It is one of the largest commercial districts in Greater London, with an extensi ...
, England. Another early French airline was the
Compagnie des Messageries Aériennes
''Compagnie des messageries aériennes'' was a pioneering French airline which was in operation from 1919–23, when it was merged with Grands Express Aériens to form Air Union.
History
Compagnie des messageries aériennes was established Februa ...
, established in 1919 by
Louis-Charles Breguet, offering a mail and freight service between
Le Bourget Airport,
Paris
Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), ma ...
and
Lesquin Airport,
Lille
Lille ( , ; nl, Rijsel ; pcd, Lile; vls, Rysel) is a city in the northern part of France, in French Flanders. On the river Deûle, near France's border with Belgium, it is the capital of the Hauts-de-France region, the prefecture of the N ...
.
The first German airline to use heavier than air aircraft was
Deutsche Luft-Reederei
Deutsche Luft-Reederei (D.L.R.), was a German airline established in December 1917 which started operating in 1919.
History
The name means "German (Deutsche) Air (Luft) Shipping Company (Reederei)". D.L.R. was reorganized as Aero Lloyd AG in 1 ...
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, 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
Dutch commonly refers to:
* Something of, from, or related to the Netherlands
* Dutch people ()
* Dutch language ()
Dutch may also refer to:
Places
* Dutch, West Virginia, a community in the United States
* Pennsylvania Dutch Country
People E ...
airline
KLM
KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
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
Wilhelmina (; Wilhelmina Helena Pauline Maria; 31 August 1880 – 28 November 1962) was Queen of the Netherlands from 1890 until her abdication in 1948. She reigned for nearly 58 years, longer than any other Dutch monarch. Her reign saw World Wa ...
. Its first flight was from
Croydon Airport,
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
to
Amsterdam
Amsterdam ( , , , lit. ''The Dam on the River Amstel'') is the capital and most populous city of the Netherlands, with The Hague being the seat of government. It has a population of 907,976 within the city proper, 1,558,755 in the urban ar ...
, using a leased
Aircraft Transport and Travel DH-16, and carrying two British journalists and a number of newspapers. In 1921, KLM started scheduled services.
In
Finland
Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...
, the charter establishing Aero O/Y (now
Finnair
Finnair ( fi, Finnair Oyj, sv, Finnair Abp) is the flag carrier and largest airline of Finland, with its headquarters in Vantaa on the grounds of Helsinki Airport, its hub. Finnair and its subsidiaries dominate both domestic and international ...
) was signed in the city of
Helsinki
Helsinki ( or ; ; sv, Helsingfors, ) is the capital, primate, and most populous city of Finland. Located on the shore of the Gulf of Finland, it is the seat of the region of Uusimaa in southern Finland, and has a population of . The city ...
on 12 September 1923.
Junkers F.13
The Junkers F 13 was the world's first all-metal transport aircraft, developed in Weimar Republic, Germany at the end of World War I. It was an advanced Cantilever#Aircraft, cantilever-wing monoplane, with enclosed accommodation for four passenge ...
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 most populous and capital city of Estonia. Situated on a bay in north Estonia, on the shore of the Gulf of Finland of the Baltic Sea, Tallinn has a population of 437,811 (as of 2022) and administratively lies in the Harju '' ...
, capital of
Estonia
Estonia, formally the Republic of Estonia, is a country by the Baltic Sea in Northern Europe. It is bordered to the north by the Gulf of Finland across from Finland, to the west by the sea across from Sweden, to the south by Latvia, a ...
, and it took place on 20 March 1924, one week later.
In the
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...
, 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
Imperial Airways was the early British commercial long-range airline, operating from 1924 to 1939 and principally serving the British Empire routes to South Africa, India, Australia and the Far East, including Malaya and Hong Kong. Passengers ...
was formed from the merger of
Instone Air Line Company,
British Marine Air Navigation,
Daimler Airway
Daimler Airway was an airline subsidiary of the Birmingham Small Arms Company (BSA)'s Daimler Company. It was created to use some of the assets of the failed ventures Airco and its subsidiary, Aircraft Transport and Travel, which was acquired ...
and
Handley Page Transport
Handley Page Transport Ltd was an airline company founded in 1919, soon after the end of the First World War, by Frederick Handley Page.
The company's first planes were Handley Page Type O/400 bombers modified for passenger use. They flew a Lo ...
, 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 was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts e ...
and to enhance trade and integration.
The first new airliner ordered by Imperial Airways, was the
Handley Page W8f
The Handley Page W.8, W.9 and W.10 were British two- and three-engine medium-range biplane airliners designed and built by Handley Page.
The W.8 (also known as the H.P.18) was the company's first purpose-built civil airliner although it was a ...
''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
Air Union was a French airline established January 1, 1923, as the result of a merger between the airlines ''Compagnie des Messageries Aériennes'' and '' Compagnie des Grands Express Aériens''. Air Union was merged with four other French airli ...
on 1 January 1923. This later merged with four other French airlines to become
Air France
Air France (; formally ''Société Air France, S.A.''), stylised as AIRFRANCE, is the flag carrier of France headquartered in Tremblay-en-France. It is a subsidiary of the Air France–KLM Group and a founding member of the SkyTeam global a ...
, the country's flagship carrier to this day, on 17 May 1933.
Germany's
Deutsche Lufthansa
Deutsche Lufthansa AG (), commonly shortened to Lufthansa, is the flag carrier of Germany. When combined with its subsidiaries, it is the second- largest airline in Europe in terms of passengers carried. Lufthansa is one of the five founding m ...
was created in 1926 by merger of two airlines, one of them
Junkers Luftverkehr. Lufthansa, due to the
Junkers heritage and unlike most other airlines at the time, became a major investor in airlines outside of Europe, providing capital to
Varig
VARIG (acronym for Viação Aérea RIo-Grandense, ''Rio Grandean Airways'') was the first airline founded in Brazil, in 1927. From 1965 until 1990, it was Brazil's leading airline, and virtually its only international one. In 2005, Varig went ...
and Avianca. German airliners built by
Junkers,
Dornier, and
Fokker were among the most advanced in the world at the time.
Expansion
In 1926,
Alan Cobham
Sir Alan John Cobham, KBE, AFC (6 May 1894 – 21 October 1973) was an English aviation pioneer.
Early life and family
As a child he attended Wilson's School, then in Camberwell, London. The school relocated to the former site of Croydo ...
surveyed a flight route from the UK to
Cape Town
Cape Town ( af, Kaapstad; , xh, iKapa) is one of South Africa's three capital cities, serving as the seat of the Parliament of South Africa. It is the legislative capital of the country, the oldest city in the country, and the second largest ...
,
South Africa
South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...
, following this up with another proving flight to
Melbourne
Melbourne ( ; Boonwurrung/Woiwurrung: ''Narrm'' or ''Naarm'') is the capital and most populous city of the Australian state of Victoria, and the second-most populous city in both Australia and Oceania. Its name generally refers to a met ...
, Australia. Other routes to British India and the Far East were also charted and demonstrated at this time. Regular services to Cairo and Basra began in 1927 and were extended to Karachi in 1929. The London-Australia service was inaugurated in 1932 with the Handley Page HP 42 airliners. Further services were opened up to Kolkata, Calcutta, Rangoon, Singapore, Brisbane and Hong Kong passengers departed London on 14 March 1936 following the establishment of a branch from Penang to Hong Kong.
Imperial's aircraft were small, most seating fewer than twenty passengers, and catered for the rich. Only about 50,000 passengers used Imperial Airways in the 1930s. Most passengers on intercontinental routes or on services within and between British colonies were men doing colonial administration, business or research.
Like Imperial Airways,
Air France
Air France (; formally ''Société Air France, S.A.''), stylised as AIRFRANCE, is the flag carrier of France headquartered in Tremblay-en-France. It is a subsidiary of the Air France–KLM Group and a founding member of the SkyTeam global a ...
and
KLM
KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
's early growth depended heavily on the needs to service links with far-flung colonial possessions (French North Africa, North Africa and French Indochina, Indochina for the French and the Dutch Indies, East Indies for the Dutch). France began an air mail service to Morocco in 1919 that was bought out in 1927, renamed Aéropostale (aviation), Aéropostale, and injected with capital to become a major international carrier. In 1933, Aéropostale went Bankruptcy, bankrupt, was nationalized and merged into
Air France
Air France (; formally ''Société Air France, S.A.''), stylised as AIRFRANCE, is the flag carrier of France headquartered in Tremblay-en-France. It is a subsidiary of the Air France–KLM Group and a founding member of the SkyTeam global a ...
.
Although Germany lacked colonies, it also began expanding its services globally. In 1931, the airship LZ 127 Graf Zeppelin, 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 LZ 129 Hindenburg, 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, Afghanistan, started operating.
From February 1934 until World War II began in 1939, Deutsche Luft Hansa, Deutsche Lufthansa operated an airmail service from Stuttgart, Germany via Spain, the Canary Islands and West Africa to Natal, Rio Grande do Norte, Natal in Brazil. 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 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 and
British Airways
British Airways (BA) is the flag carrier airline of the United Kingdom. It is headquartered in London, England, near its main hub at Heathrow Airport.
The airline is the second largest UK-based carrier, based on fleet size and passengers ...
. Other national airlines, including Italy's Alitalia, suffered – particularly with the rapid increase of oil prices in early 2008.
Finnair
Finnair ( fi, Finnair Oyj, sv, Finnair Abp) is the flag carrier and largest airline of Finland, with its headquarters in Vantaa on the grounds of Helsinki Airport, its hub. Finnair and its subsidiaries dominate both domestic and international ...
, the largest airline of
Finland
Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...
, had no fatal or hull-loss accidents since 1963, and is recognized for its safety.
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
St. Petersburg is a city in Pinellas County, Florida, United States. As of the 2020 census, the population was 258,308, making it the fifth-most populous city in Florida and the second-largest city in the Tampa Bay Area, after Tampa. It is the ...
and
Tampa, Florida
Tampa () is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. The city'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 ...
, 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 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, 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 Postal Service won the financial backing of United States Congress, Congress to begin experimenting with air mail service, initially using Curtiss Jenny aircraft that had been procured by the United States Army Air Service. 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 United States Postal Service, Postal Service had developed its own air mail network, based on a transcontinental backbone between New York City and San Francisco, California, San Francisco. 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., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. One of the world's oldest airlines in operation, Delta is headquartered in Atlanta, Georgia. The airline, along w ...
, Braniff Airways, American Airlines,
United Airlines
United Airlines, Inc. (commonly referred to as United), is a major American airline headquartered at the Willis Tower in Chicago, Illinois. (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines.
Service during the early 1920s was sporadic: most airlines at the time were focused on airmail#History, carrying bags of mail. In 1925, however, the Ford Motor Company bought out the William Bushnell Stout, Stout Aircraft Company and began construction of the all-metal Ford Trimotor, 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 transport, 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 to Shanghai and Boston to
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
. 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 in the 1930s, the U.S. airline industry was generally profitable, even during the Great Depression. This trend continued until the beginning of World War II.
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, and Douglas DC-6. Most of these new aircraft were based on American bombers such as the B-29, 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, 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 Czech Airlines, 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 started transatlantic flights between Heathrow Airport, London Heathrow and New York-Idlewild Airport, 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, 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 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 deregulation act, 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 travel and bus lines under pressure, with most of the latter having withered away, whilst the former is still protected under nationalization through the continuing existence of Amtrak.
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 carrier, 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 Airlines, ATA and Skybus have since ceased operations.
Increasingly since 1978, US airlines have been reincorporated and off spin, 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 company, holding companies and parent company, 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 control of distressed airline companies by temporarily investing large sums of Equity (finance), capital in air carriers, to rescheme an airlines assets into a profitable organization or liquidate, 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. Through the Air Transportation Stabilization Board, 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 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 United States Department of the Treasury, 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 three largest major carriers and Southwest Airlines control 70% of the U.S. passenger market.
[
]
Asia
Although Philippine Airlines (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 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 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 (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount.
Cathay Pacific was one of the first airlines to be launched among the other Asian countries in 1946 along with Asiana Airlines, which later joined in 1988. The license to operate as an airliner was granted by the federal government body after reviewing the necessity at the national assembly. The Hanjin 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 joined Star Alliance
Star Alliance is the world's largest global airline alliance. Founded on 14 May 1997, its CEO is Jeffrey Goh and its headquarters is located in Frankfurt am Main, Germany. , Star Alliance is the largest of the three global alliances by passenge ...
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 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 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
Imperial Airways was the early British commercial long-range airline, operating from 1924 to 1939 and principally serving the British Empire routes to South Africa, India, Australia and the Far East, including Malaya and Hong Kong. Passengers ...
) from Karachi to Mumbai, Bombay via Ahmedabad. The aircraft continued to Madras via Bellary piloted by Royal Air Force
The Royal Air Force (RAF) is the United Kingdom's air and space force. It was formed towards the end of the First World War on 1 April 1918, becoming the first independent air force in the world, by regrouping the Royal Flying Corps (RFC) an ...
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, 49% of the airline was acquired by the Government of India. 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, Oakland, California, from Nielson Airport in Makati with stops in Guam, Wake Island, Johnston Atoll and Honolulu, Hawaii, making PAL the first Asian airline to cross the Pacific Ocean. A regular service between Manila and San Francisco 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, newly born Asian countries started to embrace air transport. Among the first Asian carriers during the era were Cathay Pacific of Hong Kong (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 Airlines, Singapore and Malaysia Airlines), El Al in Israel in 1948, Garuda Indonesia in 1949, Japan Airlines in 1951, Thai Airways in 1960, and Korean National Airlines in 1947.
Singapore Airlines had won quality awards.
Latin America and Caribbean
Among the first countries to have regular airlines in Latin America and the Caribbean were Bolivia with Lloyd Aéreo Boliviano, Cuba with Cubana de Aviación, Colombia with Avianca
Avianca S.A. ( acronym in Spanish for ''Aerovias del Continente Americano S.A.'', "Airways of the American Continent") is a Colombian airline. It has been the flag carrier of Colombia since December 5, 1919, when it was initially registered und ...
(the first airline established in the Americas), Argentina with Aerolíneas Argentinas, Chile with LAN Chile (today LATAM Airlines), Brazil with Varig
VARIG (acronym for Viação Aérea RIo-Grandense, ''Rio Grandean Airways'') was the first airline founded in Brazil, in 1927. From 1965 until 1990, it was Brazil's leading airline, and virtually its only international one. In 2005, Varig went ...
, the Dominican Republic with Dominicana de Aviación, Mexico with Mexicana de Aviación, Trinidad and Tobago with BWIA West Indies Airways (today Caribbean Airlines), Venezuela with Aeropostal, Puerto Rico with Aerovias nacionales de puerto rico, Puertorriquena; and Grupo TACA, TACA based in El Salvador and representing several airlines of Central America (Costa Rica, Guatemala, Honduras and Nicaragua). All the previous airlines started regular operations well before World War II. Puerto Rican commercial airlines such as Prinair, Oceanair, Fina Air and Vieques Air Link 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. Some industry estimates indicate 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 five airline groups – Avianca
Avianca S.A. ( acronym in Spanish for ''Aerovias del Continente Americano S.A.'', "Airways of the American Continent") is a Colombian airline. It has been the flag carrier of Colombia since December 5, 1919, when it was initially registered und ...
, Panama's Copa Airlines, Copa, Mexico's Volaris, the Irelandia group and LATAM Airlines – have international subsidiaries and cover many destinations within the Americas as well as major hubs in other continents. LATAM with Chile as the central operation along with Peru, Ecuador, Colombia, Brazil and Argentina and formerly with some operations in the Dominican Republic. The Avianca Holdings, Avianca group has its main operation in Colombia based around the hub in El Dorado International Airport, Bogotá, Colombia, as well as subsidiaries in various Latin American countries with hubs in Monseñor Óscar Arnulfo Romero (airport), San Salvador, El Salvador, as well as Lima International Airport, Lima, Peru, with a smaller operation in Ecuador. Copa has subsidiaries Copa Airlines Colombia and Wingo (airline), 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; it now includes Viva Colombia and Viva Air Peru.
Regulation
National
Many countries have Flag carrier, 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 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 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 bankruptcy since 1990 have included American Airlines, Continental Airlines (twice), Delta Air Lines
Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. One of the world's oldest airlines in operation, Delta is headquartered in Atlanta, Georgia. The airline, along w ...
, Northwest Airlines, Pan Am, United Airlines
United Airlines, Inc. (commonly referred to as United), is a major American airline headquartered at the Willis Tower in Chicago, Illinois. and US Airways (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, aircraft maintenance, depreciation 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 757-200 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 with 399,746 available seat miles, 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 available seat kilometer, 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 (computer system), Sabre, allowed airlines to easily perform cost-benefit analysis, 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 global airline industry revenue
In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business.
Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...
was $754 billion in 2017 for a $38.4 billion collective Profit (accounting), profit, 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 and Workforce, labor costs.
The demand for air transport will be less Elasticity (economics), elastic for flight length, longer flights than for shorter flights, and more elastic for leisure travel than for business travel.
Airlines often have a strong seasonality, 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 and derivatives), with the now defunct Eastern Air Lines which operated 17 different aircraft types, each with varying pilot, engine, maintenance, and support needs.
A second financial issue is that of Hedge (finance), hedging Petroleum, oil and fuel purchases, which are usually second only to Labour (economics), 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 airports, 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 due to its proximity, while long-distance routes must use John F. Kennedy International Airport's longer runways.
Partnerships
Codesharing is the most common type of airline partnership; it 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–Moscow flights; Aeroflot operated the flights using Aeroflot aircraft, but JAL sold tickets for the flights as if they were JAL flights. This practice allows airlines to expand their operations, at least on paper, into parts of the world where they cannot afford to establish bases or purchase aircraft. Another example was the Austrian Airlines, Austrian–Sabena partnership on the Vienna–Brussels–New York City, New York/JFK route during the late '60s, using a Sabena Boeing 707 with Austrian Aircraft livery, livery.
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 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, 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 the world's largest global airline alliance. Founded on 14 May 1997, its CEO is Jeffrey Goh and its headquarters is located in Frankfurt am Main, Germany. , Star Alliance is the largest of the three global alliances by passenge ...
, SkyTeam and Oneworld
Oneworld (stylised as oneworld; CRS: *O) is an airline alliance founded on 1 February 1999. The alliance's stated objective is to be the first choice airline alliance for the world's frequent international travellers. Its central alliance offic ...
, 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 programs), 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
KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
, who partnered with Northwest Airlines. Both airlines later entered the SkyTeam alliance after the Air France-KLM, fusion of KLM and Air France in 2004.
Often the companies combine Information technology, 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
American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed on December 9, 2013, by the merger of AMR Corporation, the parent company of American Airlines, and US Airways ...
was the largest by fleet size, passengers carried and revenue passenger mile. Delta Air Lines
Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. One of the world's oldest airlines in operation, Delta is headquartered in Atlanta, Georgia. The airline, along w ...
was the largest by revenue
In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business.
Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...
, assets value and market capitalization. Lufthansa Group
Deutsche Lufthansa AG (), commonly shortened to Lufthansa, is the flag carrier of Germany. When combined with its subsidiaries, it is the second- largest airline in Europe in terms of passengers carried. Lufthansa is one of the five founding ...
was the largest by number of employees, FedEx Express
FedEx Express, a subsidiary of FedEx Corporation, is a major American cargo airline based in Memphis, Tennessee, United States. As of 2020, it is one of the world's largest airlines in terms of fleet size and freight tons flown. It is the na ...
by freight tonne-kilometres, Turkish Airlines
Turkish Airlines ( Turkish: ''Türk Hava Yolları'') is the national flag carrier airline of Turkey. , it operates scheduled services to 340 destinations in Europe, Asia, Africa, and the Americas, making it the largest mainline carrier in the ...
by number of countries served and UPS Airlines
UPS Airlines is a major American cargo airline based in Louisville, Kentucky. The second-largest cargo airline worldwide ( in terms of freight volume flown), UPS Airlines flies to 815 destinations worldwide. A wholly owned subsidiary of UPS (Unit ...
by number of destinations served (though United Airlines
United Airlines, Inc. (commonly referred to as United), is a major American airline headquartered at the Willis Tower in Chicago, Illinois. 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 highways and Rail transport, 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 Airline Deregulation Act, 1978 deregulation, U.S. carriers did not manage to make an aggregate economic profit, profit for 12 years in 31, including four years where combined economic loss, 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 battles, limit Seating capacity, capacity growth, add airline hub, hub feed with regional jets to increase their profitability. They change schedules to create more connections, buy used aircraft, reduce international frequencies and leverage partnership
A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments ...
s to optimize capacities and benefit from overseas connectivity.
Environment
Aircraft engines emit noise pollution, gases and particulate emissions, and contribute to global dimming.
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 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 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 gases emitted by the U.S. transportation sector. Boeing estimates that biofuels 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 are collaborating with leading Brazilian biofuel maker Tecbio, New Zealand'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
KLM Royal Dutch Airlines, legally ''Koninklijke Luchtvaart Maatschappij N.V.'' (literal translation: Royal Aviation Company Plc.), is the flag carrier airline of the Netherlands. KLM is headquartered in Amstelveen, with its hub at nearby Amste ...
has made the first commercial flight with biofuel in 2009.
There are projects on electric aircraft, and some of which are fully operational as of 2013.
Call signs
Main Article : Aviation call signs
Each operator of a scheduled or charter flight uses an Airline codes, 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, British Overseas Airways Corporation, 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: Aviator, Pilots (Pilot in command, Captain and First officer (civil aviation), First Officer: some older aircraft also required a Flight Engineer and/or a Navigator); Flight attendants (led by a purser on larger aircraft); Sky marshal, 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 engineers, responsible for airframe, powerplant and electrical systems maintenance; Avionics engineers responsible for avionics and instruments maintenance; Airframe and Aircraft engine, 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 corporation, corporate 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, Brazil, India 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 and acquisitions, mergers, or takeovers. 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 (aeronautics), 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; 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
See also
Related lists
References
Bibliography
# "A history of the world's airlines", R. E. G. Davies, 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
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