airline industry program
THE AIRLINE INDUSTRY The dramatic growth of commercial air transportation during the second half of this century has had a truly revolutionary impact on technical, economic and cultural development throughout the world. The international airline industry provides service to virtually every corner of the globe and has played an essential role in the creation of a global economy. The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as tourism and aircraft manufacturing, to name but two. ... During the earlier years of development, growth of the global airline industry was driven primarily by major technological innovations such as the introduction of jet airplanes for commercial use in the late 1950s, followed by the development of wide-body "jumbo jets" in the late 1960s. At the same time, airlines throughout the world were heavily regulated, creating an environment in which airline profitability was largely dependent on government decisions and policy, while competition was limited by strict restrictions on market entry at the city-pair level. Only during the period since the economic deregulation of airlines in the United States in 1978 have issues related to cost efficiency, operating profitability and competitive behavior become the dominant challenges to airline management. With the US leading the way, airline deregulation (or at least "liberalization") has now spread to much of the industrialized world, affecting both domestic air travel within individual countries and, perhaps more importantly, the continuing evolution of a highly competitive international airline industry. The deregulation of the industry in all the member states of the European Union in 1993 --and the creation of a single air transportation market in the EU-- marked another important step in this evolution. Today, the global airline industry handles over 1. ... The economic impacts of the airline industry range from its direct effects on airline employment, company profitability and net worth to its less direct but very important effects on the aircraft manufacturing industry, airports, and the tourism industry, not to mention the large economic impact on virtually every other industry affected by the ability to travel by air. ... The US airline industry operates well over 6,000 aircraft in total, of which 5,000 are large commercial jet aircraft. ... The volatility of airline profits and their strong dependence on good economic conditions are a serious concern for the industry itself and, by implication, to aircraft manufacturers, as well. Volatility has become dramatically more acute in the era of airline deregulation.