The History of Airline Industry

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Over the past century, the airline industry has grown from an experimental mode of transportation to a major part of the world's transportation system, carrying an estimated 1.5 billion passengers annually. Following rapid growth in the years after World War II, the airline industry in the U.S. changed dramatically when it was deregulated in 1978. Over the next 30 years, major airlines merged, failed, and filed for bankruptcy, and some smaller airline companies emerged as strong competitors for domestic travel. At the same time, many airlines have purchased bigger aircraft to accommodate the surge of passengers.

Early Years

  • The world did not embrace flight following Wilbur and Orville Wright's historic flight at Kitty Hawk in 1903, perceiving air travel as too dangerous. World War I helped popularize the aircraft as military vehicles, with heroic tales of American, British and German fighter pilots. But it wasn't until after Charles Lindbergh's 1927 transatlantic flight that the commercial possibilities of air travel were recognized, according to an article about the airline industry by Lydia Boyd of Duke University Library.

The 1930s

  • Air traffic regulations were passed in 1926, which were followed by the development of an extensive airmail system that flourished in the 1930s. In 1938, the Civil Aeronautics Authority was created to regulate the transportation of both mail and passengers. During that period, the DC-3 aircraft was developed to carry up to 21 passengers, according to Boyd at Duke and Stanford University's online library.

Early Postwar Era

  • The air-travel industry bloomed after World War II, with major airlines flying passengers an estimated 3.3 billion miles worldwide in 1945-1946. The development of the Lockheed Constellation pioneered the four-engine commercial airliner. In 1958, the Federal Aviation Administration was founded to develop an air-traffic control system, following a spate of mid-air collisions, according to the Duke University's Boyd and Stanford's library.

Deregulation

  • The U.S. government deregulated the airline industry in 1978. Europe followed in 1997. The deregulated market allowed airline companies to fly in other markets that were once off-limits. Deregulation ignited a fierce competition among airline companies that resulted in many mergers and failures, according to Boyd and Stanford's library.

The 1990s

  • The economic boom of the 1980s spelled trouble for some airlines in the 1990s, after companies had ordered too many aircraft, and exceeded the demand of international passengers. Cumulative losses were estimated at more than $20 billion from 1990-1994, according to Standard University. The once popular airlines Pan American and Eastern failed. Continental Airlines and TWA filed for bankruptcy at that time as well, according to Stanford's library.

Growth

  • Up until the 2008-2009 recession, air travel had grown by about 7 percent annually over 10 years, with an estimated 1.5 billion passengers taking to the air last year. The Asia/Pacific region has witnessed the fastest growth by climbing 9 percent a year in the last decade, according to Boyd and Stanford's library.

Today

  • Most airlines today have entered alliances to share the burden of operating costs. Low-cost carriers, such as JetBlue, Aer Lingus and EasyJet, have made significant inroads into the market. Airlines were expected in 2009 to carry 180 million fewer passengers compared to 2008 due to the weakened global economy, according to the Financial Post.

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