Development of Airlines in the USA

Airlines are nothing more than large sophisticated organisations providing air transport services. They either own or lease their aircraft for freight, passengers or chartered flights.

Increasing Demand

The demand and pricing for air travel services depends on a number of factors, including leisure passenger needs, business passenger needs, demand for business cargo shipments and all of these are of course influenced by overall economic activity of a given area or region.

Overall, the demand for air travel services has risen rather consistently. While annual growth rates during the 80s and 90s ranged between 5-6%, this was a drastic 15% in earlier days of aviation during the 1950s and 1960s.

Growth rates are certainly not consistent across the board and differ from area to area. In areas where deregulation provided greater pricing independence and so competition, the results were lower fares and sometimes very dramatic spikes in overall growth.

Timeline

After World War I the U.S. was inundated with aviators. Many of these aviators opted to use their war surplus planes to perform various barnstorming programs for passengers and spectators.

In 1918 the United States Postal Service began to use airplanes to experiment with air mail service. They used aircraft gotten from the United States Army. After the Army flew many air mail missions, the Post Office decided to start their own air mail network, as the Army proved to be unreliable.

Though the 1920s brought passenger airlines, many of these companies still dealt primarily with transporting mail. Then in the year 1925, Ford bought the Stout Aircraft Company as well as started construction on an all-metal aircraft that became the first American passenger airliner.

Pan American World Airways was the first American airline to go international, and was the only U.S. airline to do so before the 1940s. Even during the depression the American airline industry was profitable for most airlines and continued to be so until the start of World War II, when the U.S. saw much better airline profits than war-torn Europe. Around this time the airline industry really took off with advances in technology as well as manufacturing of aircraft.

Airlines Today

The landscape today is dominated by several large companies.  Although small discount operations start up from time to time, they often come and go because the larger airlines have the financial capital to withstand short term price wars created by these smaller niche airlines.