airline industry

airline industry the business of transporting paying passengers and freight by air along regularly scheduled routes, typically by airplanes but also by helicopter.

Ferdinand Graf von Zeppelin set up the first commercial airline in 1912, using a form of the dirigible to transport more than 34,000 passengers before World War I. Early air travel began with balloons (first flown by two Frenchmen in 1783), gliders (first flown in 1809), and ultimately airplanes (a Frenchman Clement Ader, flew his steam-powered plane, the Eole, in 1890). Prior to World War I, the public's interest in flying was peaked by demonstrations and airplane races; during the war, government subsidies and demands for new airplanes vastly improved techniques for designing and building them. Following the war, the first commercial airplane routes were set up in Europe, using wartime pilots and decommissioned war planes—often passengers were seated in chairs set up in old bombers. During the 1920s, European governments heavily subsidized the establishment of such well-known commercial airlines as British Airways, Air France, and KLM.

In the United States, commercial airlines developed more slowly. The U.S. Post Office established an air mail service in 1919 and played an important role in developing air travel by setting up a nationwide system of airports. In 1925 the U.S. government began paying generous subsidies to private carriers to deliver the mail, and some companies began hauling passengers as well. Many well-known U.S. carriers were established during this period, including Pan Am (founded in 1928; now defunct), United Airlines (created in 1931 by a merger between several older mail carrying operations), American Airlines (created in 1930 out of several mail carriers), TWA (1928; now merged with American), and Delta (1929).

Public interest in air travel grew after Charles A. Lindbergh 's transatlantic flight (1927). Improved air safety and Boeing's and Lockheed's decision to produce airplanes that were especially designed for commercial airlines helped the number of passengers grow from only a few thousand a year in 1930 to about 2 million in 1939 and 16.7 million in 1949. The introduction of jet airplanes in 1957 and increasingly larger aircraft helped lower the cost of air travel in subsequent years. To regulate the industry, the Civilian Aeronautic Board was established in 1938 with the authority to establish routes, fares, and safety standards.

The Airline Deregulation Act of 1978 allowed airlines to set their own routes and after 1982 let them set their own fares. In 1984 the CAB was abolished; the Federal Aviation Administration now regulates airline safety. Lower fares and greater competition increased the number of passengers from 297 million in 1980 to over 455 million in 1988, producing complaints about congestion and safety. Financial problems in the 1980s after deregulation of the industry led to a period of labor strife. A number of major carriers were either bought by other airlines or forced out of business, and small start-up airlines began serving niche markets.

The industry continued to grow through the 1990s; in 1998, U.S. airlines carried a record 551 million passengers, but the 10 largest carriers now control about 96% of the U.S. market. The 2001 terrorist attacks on the World Trade Center and Pentagon , in which four jetliners were hijacked and intentionally crashed, threw the airline industry into turmoil, especially in the United States, as people avoided flying and new security restrictions made travel more difficult. Tens of thousands of employees were laid off, many flights were dropped, and Congress passed a $15 billion bailout package that ultimately had only a limited effect. Two major airlines, US Airways and United, filed for bankruptcy in 2002, but this was due only in part to the events of Sept., 2001; US Airways, which had emerged from bankruptcy, filed again in 2004. Higher fuel costs and competition from newer airlines contributed to the Sept., 2005, decision by Delta and Northwest airlines to file for bankruptcy, creating a situation in which three of the top four U.S. airlines (by revenue) were in bankruptcy protection. US Airways emerged from bankruptcy the same month and merged with America West; UAL emerged in 2006. The string of bankruptcies ended in 2007, when Delta and Northwest exited bankruptcy.

Bibliography: See A. Sampson, Empires of the Sky (1984); R. Dooanis, Flying Off Course (1991).

Aviation Industry. At the time of the first flight by Wilbur and Orville Wright in 1903, aircraft builders in the United States constituted a disparate group of amateurs. During 1908 and 1909, Orville Wright completed a series of highly publicized flights in America for the U.S. Army; overseas, his brother Wilbur dazzled European royalty and enthusiastic crowds. Against this backdrop of public acclaim and investor interest, the Wrights formed a manufacturing company in 1909, followed by dozens of other entrepreneurs. Military contracts represented the core market, and the outbreak of World War I in 1914 brought additional orders from Europe. When the United States declared war in 1917, Congress authorized massive aircraft contracts for domestic production. Although subsequent investigations revealed widespread fraud, the wartime effort provided valuable experience in high‐volume production and the manufacture of myriad basic components such as engines, propellers, magnetos, and instrumentation.

During the 1920s and 1930s, manufacturers successfully incorporated numerous technological innovations developed by the National Advisory Committee for Aeronautics. The military services also carried on practical research, and new curricula in aeroengineering at major universities contributed to an expanding population of trained engineers. Trade associations and professional societies appeared. Government regulatory agencies, such as the Civil Aeronautics Authority (1938) and the later Federal Aviation Administration (1958), helped stabilize the industry, which encouraged airlines and private pilots alike to order new aircraft. Douglas Aircraft Company launched the historic DC–3 airliner in 1935 and builders of light planes for private pilots delivered classic designs like the two‐seat Piper Cub and Beechcraft's twin‐engine models for executive travel.

The success of the American aviation industry during the interwar years rested on a mix of corporate innovation, federal research and development, and the contribution of such emigres from Europe such as Igor Sikorsky (flying boats and helicopters), Theodore von Karman (theorist and educator), and others in both the private and public sectors. A late 1930s wave of orders from European air forces, accelerated by the Lend Lease program, had a significant impact on the aviation industry's record production during World War II, totaling 300,000 aircraft. Development of planes like the complex Boeing B–29 bomber rested on sophisticated management and production procedures, including the coordination of thousands of suppliers. At the same time, the introduction of jet propulsion engines and aircraft by Britain and Germany proved crucial in subsequent American progress, as did German developments.

After 1945, Cold War antagonisms intensified the wartime concentration of aviation industries in the Northeast and along the Pacific coast, including the Seattle‐based Boeing Company, although diversification in the South and Middle West occurred as well. Electronics became a major component of both civil and military aircraft, increasing their costs. Postwar prosperity and business expansion created a strong demand for postwar airliners, and vast production resources gave U.S. manufactures the lead in global sales. During the 1960s, American jet transports dominated the world market. The light plane industry also soared, turning out 18,000 planes in the record year 1978, compared to 240 civil transports and 1,000 military aircraft. During the 1990s despite financial difficulties and the end of the Cold War, manufacturers continued to produce annually 900 light planes, 500 transports, and 700 military planes. Exports remained crucial to the industry, and multinational agreements proliferated. Although American manufacturers led the world, corporate mergers reduced the number of domestic firms, which faced strong challenges from European consortia.
See also Airplanes and Air Transport; Engineering; Military, The; Technology; Weaponry, Nonnuclear.

Bibliography

Jacob Vander Meulen , The Politics of Aircraft: Building an American Military Industry, 1991; Roger Bilstein , The American Aerospace Industry: From Workshop to Global Enterprise, 1996.

Roger E. Bilstein