An airline is an organization providing aviation services to passengers and/or cargo. It owns or leases airliners with which to supply these services and may form partnerships or alliances with other airlines for reasons of mutual benefit. Airline services may be intercontinental, intracontinental, regional or domestic and may be operated as scheduled services or charters.
Early development of airlines in North America
After the Wright brothers flew the first heavier than air airplane in 1903, the airplane was not widely used commercially for over a decade, and was viewed mainly as a toy. In 1914, the world's first scheduled airline service began between Tampa, Florida and St. Petersburg, Florida, charging five dollars for each one-way trip across Tampa Bay.
Following World War I, the United States found itself swamped with aviators. Many decided to take their war-surplus aircraft on barnstorming campaigns, performing acrobatic maneuvers to woo crowds. In 1918, the United States Postal Service won the financial backing of Congress to begin experimenting with air mail service, initially using Curtiss Jenny aircraft that had been procured by the United States Army for reconaissance missions on the Western Front. The Army was the first to fly these missions, but quickly lost the contract when they proved to be too unreliable. By the mid-1920s, the Postal Service had developed its own air mail network, based on a transcontinental backbone between New York, New York and San Francisco, California. To supplant this service, they offered twelve contracts for spur routes to independent bidders: the carriers that won these routes would, through time and mergers, evolve into Braniff Airlines, American Airlines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Airlines, to name a few.
Passenger service during the early 1920s was sporadic at best: most airlines at the time were focused on carrying bags of mail. In 1925, however, Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, the first successful American airliner. With a 12-passenger capacity, it made passenger service potentially profitable. Air service became parallel to 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 American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London. Pan Am was the only U.S. airline to go international before the 1940s, and quickly became a symbol of the potential of the American airline industry.
With the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, the U.S. airline industry continued to build up profitability, despite the Great Depression. This trend continued until the beginning of World War II.
Early development of airlines in Europe
The first countries in Europe to embrace air transport were France and Germany. France begain an air mail service to Morocco in 1919 that was bought out in 1927, renamed Aéropostale, and injected with capital to become a major international carrier. In 1933, Aeropostale went bankrupt, was nationalized, and became Air France.
The German airline industry began with Lufthansa in 1926, which, unlike other airlines at the time, became a major investor in airlines in the developing world, founding Varig and Avianca. German airliners built by Junkers, Dornier, and Fokker were the most advanced in the world at the time. The peak of German air travel came in the mid-1930s, when Nazi propaganda ministers approved the start of commercial zeppelin service: the big airships were a symbol of industrial might, but the fact that they used flammable hydrogen gas raised safety concerns that culminated with the Hindenburg disaster of 1937.
United Kingdom's flag carrier during this period was Imperial Airways, which became BOAC (British Overseas Airlines Co.) in 1939. Imperial Airways used huge Handley-Page biplanes for routes between London, the Middle East, and India: images of Imperial aircraft in the middle of the Rub'al Khali, being maintained by Bedouins, are among the most famous pictures from the heyday of the British Empire.
Development of airlines post-1945
World War II, like World War I, brought new life to the airline industry. Many airlines in the Allied countries had become rich by leasing their airplanes to the military, and were eager to spend this money on the new 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.
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 Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug. The Vickers Viscount and Lockheed L-188 Electra inaugurated turboprop transport.
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. In 1972, Airbus began producing Europe's most commercially successful line of airliners to date.
Starting in the late 1970s, hit by the oil crisis and airline deregulation, many airlines across the world entered financial difficulties. New low-cost carriers, such as Laker Airways and Southwest Airlines, emerged as competitors to older "legacy" carriers. Pan Am, Eastern, and many other large airlines disappeared by the 1990s. Although the ensuing decade brought record profits to airlines, particularly in the United States, the September 11, 2001 terrorist attacks greatly stifled this boom.
Many countries have national airlines that are owned and operated by the government. Even fully privatized airlines are subject to a great deal of government regulation for economic, political, and safety concerns. Airline labor actions, for instance, are often halted by government intervention in order to protect the free flow of people, communications, and goods between different regions without compromising safety.
The United States, European Union, 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, and to levy airfares and supply flights according to market demand. This freedom has caused many airlines to become highly profitable enterprises, but has also led to the downfall of well-known carriers, most notably Pan Am and Eastern in the U.S.
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 ports 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 ports 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, which 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.
Although many countries continue to operate state-owned or parastatal airlines, most large airlines today are privately-owned and are therefore governed by microeconomic principles in order to maximize shareholder profit.
Most private airlines practice price discrimination by selling seats at different prices based on the terms of the ticket. Tickets purchased in advance are usually much cheaper than tickets purchased on the day of travel, even though they provide the same service to the bearer. The advent of advanced computerized reservations systems in the late 1970s, most notably Sabre, allowed airlines to easily perform 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.
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.
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.
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 tradeable asset in the portfolios of many airlines. Clearly take-off slots at popular times of the day can be critical in attracting the more profitable business traveller 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. 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.
Code sharing 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' code sharing partnership with Aeroflot in the 1960s on flights from Tokyo to Moscow: 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.
Since airline reservation requests are often made by city-pair (such as "show me flights from Chicago to Dusseldorf"), an airline who is able to code share with another airline for a variety of routes might be able to be listed as indeed offering a Chicago-Dusseldorf flight. The passenger is advised however, that Airline 1 operates the flight from say Chicago to Amsterdam, and Airline 2 operates the continuing flight (on a different airplane, sometimes from another terminal) to Dusseldorf. Thus the primary rationale for code sharing is to expand one's service offerings in city-pair terms so as to increase sales.
Virtually all international airlines practice code sharing.
A more recent development is the airline alliance, which became prevalent in the 1990s. Groups of airlines such as the Star Alliance, oneworld, and SkyTeam 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. Often the companies combine IT operations, buy fuel, or purchase airplanes as a bloc in order to achieve higher bargaining power.
Customs and conventions
Each operator of a scheduled or charter flight uses a distinct airline call sign when communicating with airports or air traffic control centres. 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.
The various types of airline personnel include:
Most airlines follow a corporate structure where each broad area of operations (such as maintenance, flight operations, 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 also tend to employ considerable numbers of lawyers to deal with regulatory procedures and other administrative tasks.
da:Flyselskab de:Fluggesellschaft es:Línea aérea fr:Compagnie aérienne nl:Luchtvaartmaatschappij ja:航空会社 pl:Linie lotnicze zh:航空公司