Airlines

First Flight

The first recorded flight of a human being took place in 1783 when French inventors Joseph and Etienne Montgolfier inflated a large balloon with hot air, reaching an altitude of 6,000 feet. Advancements in aeronautics, the science of flight, soon led to the development of successful glider designs. In the late 1800s Brothers Orville Wright and Wilbur Wright became convinced that the typical glider wing structure was fundamentally flawed. They built a wind tunnel to test the flow of air over various new designs. They also developed specifications for an internal combustion engine powerful enough to lift its own weight and the weight of a plane. They consulted marine engineering texts and constructed a propeller for their plane. When they made their historic first flight on December 17, 1903, near Kitty Hawk, North Carolina, they embodied the basic structural components – engineering, manufacturing, ground crew, and pilots – of today's airline industry.

Military Aviation

Technological advances followed rapidly. Spurred by the growing certainty of war in Europe, designers sought faster, more maneuverable, and more stable aircraft. The outbreak of World War I stalled development of commercial air transport. Efforts turned to developing the airplane's military potential. By the end of the war, planes could reach speeds nearing 200 miles per hour and could climb as high as 30,000 feet, while operating for many hours in the air. By 1919, a U.S. Navy plane made the first transatlantic flight of nearly 3,400 miles. Commercial use of the airplane was limited for some years after the war. Airplanes were not yet large enough or reliable enough to carry passengers at a profit, and they were not yet able to fly in bad weather.

Commercial Aviation

In 1919, companies in Germany, France, and England, with support from their governments and using converted surplus warplanes, began civil airline services. In the United States, civil airplanes were chiefly the props of stunt flyers and daredevils. The passage of the Kelly Air Mail Act of 1925, in which mail transport was turned over to private contractors, coupled with technological advances in airplane and airplane engine design in the 1920s and 1930s, gave the airline industry a much needed boost.

Increasing numbers of people were flying on commercial airplanes. The 1926 Air Commerce Act established licensing requirements for pilots and airlines, while creating an airway network with lights and radio beacons. This provided greater safety in the air and greater consumer confidence in the airline industry. On May 21, 1927, Charles Lindbergh completed the first nonstop flight from New York to Paris and set off a boom in aviation and air travel. By 1933, the United States boasted the busiest airport in the world, at Newark, New Jersey. Companies, such as Boeing, Douglas, and Lockheed, began focusing on aircraft manufacture and design.

In the 1930s, many of the small airlines from the decade before had merged to form what would become known as the Big Four airline companies: American, United, Trans World (TWA), and Eastern. By the end of the 1930s, the U.S. companies carried 30 million people per year. World War II interrupted the growth of the commercial airlines. All available resources and research were directed toward the war and to winning dominance in the air over the powerful German Luftwaffe. The development of the jet engine, a turbine engine more powerful than the internal combustion engine, occurred during this time, dramatically effecting the commercial airline industry.

Following the war, the industry underwent a rapid expansion. Planes could carry larger numbers of people and transport far heavier payloads, with shorter travel times and fewer refueling stops. In the United States, the Federal Aviation Agency, now the Federal Aviation Administration (FAA), regulated the technical aspects of the airline industry, performing safety inspections of the aircraft, creating specifications for airport and runway design, and establishing a system of air traffic control to help maintain the safety of the increasingly crowded skies. The Civil Aeronautics Board regulated the economic aspects, dictating airline routes and passenger fares.

In 1952, British European Airways was the first to add commercial jet service and the first foreign company to successfully enter the U.S. market. U.S. airlines were slower to adopt jet planes. It was not until 1959 that Boeing introduced its 707, but by the mid-1960s, the United States dominated the international airways. By the end of the decade, manufacturers were building jumbo jet airplanes, such as the Boeing 747 and McDonnell-Douglas's DC-10, capable of carrying from 300 to 500 people per flight. These planes reached speeds of up to 625 miles per hour. The supersonic Concorde, designed to fly at 1,350 miles per hour, was introduced in 1976 and flew until 2003, when its commercial flights ended.

General Aviation

Larger planes meant lower prices, and lower prices meant more passengers than ever before. Meanwhile, airplanes had long been put to other uses. Alongside the commercial airline industry, the general aviation industry included roughly 80 percent of all registered aircraft in the United States. Manufacturers such as Cessna and Piper created smaller, usually piston-engine planes, for such purposes as pilot training, aerial sports such as skydiving, and private pleasure flying. Later, the jet engine was adapted for general aviation use in executive and business transport services. Private mail and package delivery companies such as Federal Express and United Parcel Service began to build fleets of their own. 

Changes in Aviation Regulation and the Economy

Until 1978, the airline industry was strictly regulated by the Civil Aeronautics Board. Air travel was largely dominated by a handful of giant companies. In an effort to increase competition within the industry, the Airline Deregulation Act of 1978 removed these controls. The airline industry entered a chaotic period in which many airlines failed, while others merged and many new ones appeared. Ticket fares decreased for some larger, more frequently traveled destinations. But for smaller destinations, fares rose drastically. Nonetheless, the industry underwent an explosion in the number of passengers flying each year.

In the 1990s, a more profitable hub-and-spoke system began to emerge in which airlines based their operations in one or more cities. An economic downturn, however, coupled with the enormous competition of the last decade, took its toll on the airlines. The sudden end of the Cold War meant an end to unlimited government defense spending, causing a crisis among aircraft manufacturers. In the industry itself, fewer and fewer jobs were being created, and many were being lost.

The end of the recession brought renewed prosperity to the airlines and increases in the numbers of people traveling. Airlines focused more on services such as electronic ticketing, frequent flyer programs, and in-flight telephones and videoplayers to increase their attractiveness to customers. Another trend was the formation of partnerships between U.S. and foreign companies, allowing them to extend the routes they could offer to their customers. Many aircraft manufacturers began to enter other areas of manufacturing and technology to replace revenues lost to the shrinking defense budget.

The economy slipped into recession again in 2001, hitting the airline industry hard, primarily because of drastically lower numbers of business travelers. Then, the terrorist attacks of September 11, 2001, put the industry in real crisis. The attacks shut down air transport completely for four days and new security measures and regulations were immediately instituted. Airlines were forced to reduce flight capacity and cut schedules. To persuade passengers to fly again, they had to offer cheaper fares. As a result, the industry reported losses of nearly $10 billion at the end of 2001. Nearly 100,000 jobs were lost. In response, Congress passed the Air Transportation Safety and System Stabilization Act to help the airline industry deal with the financial ramifications of the terrorism. The bill provided direct cash grants, loan guarantees, compensation for increased insurance costs, and limits to liability for third-party damages resulting from terrorist acts.

The airline industry slowly rebounded over the ensuing years, posting net profits in 2006 and 2007. The recent economic recession, however, has taken another considerable toll on the airlines industry, with multibillion-dollar losses posted in recent years. In 2011 and 2012, fuel costs had risen steadily, driving passenger ticket prices up and airlines' profitability down. Many airlines have since added ancillary fees in an effort to recoup some of the profits, for instance, baggage fees and onboard sales of food and beverages. Airlines mergers have also consolidated the industry and put control of passenger ridership into fewer hands. In 2013, two of the largest airlines—American Airlines and US Airways—merged to form the American Airlines Group.

Despite the industry's ups and downs, air travel remains one of the most popular forms of transportation for business and pleasure.

Related Companies

▲ Show Less ▼ Show More

Become a Vault Basic Member

Complete your Vault Profile and get seen by top employers