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uired by the government of india in return the airline was granted status to operate international services from india as the designated flag carrier under the name air india international 89 on 31 july 1946 a chartered philippine airlines pal dc 4 ferried 40 american servicemen to oakland california from nielson airport in makati with stops in guam wake island johnston atoll and honolulu hawaii making pal the first asian airline to cross the pacific ocean a regular service between manila and san francisco was started in december it was during this year that the airline was designated as the flag carrier of philippines 90 during the era of decolonization newly born asian countries started to embrace air transport among the first asian carriers during the era were cathay pacific of hong kong founded in september 1946 orient airways later pakistan international airlines founded in october 1946 air ceylon later srilankan airlines founded in 1947 malayan airways limited in 1947 later singapore and malaysia airlines el al in israel in 1948 garuda indonesia in 1949 thai airways in 1960 and korean national airlines in 1947 citation needed latin america and caribbean edit latam airlines is the largest airline in latin america in terms of number of annual passengers flown 91 among the first countries to have regular airlines in latin america and the caribbean were bolivia with lloyd aéreo boliviano 92 cuba with cubana de aviación colombia with avianca the first airline established in the americas argentina with aerolíneas argentinas chile with lan chile today latam airlines brazil with varig the dominican republic with dominicana de aviación mexico with mexicana de aviación trinidad and tobago with bwia west indies airways today caribbean airlines venezuela with aeropostal puerto rico with puertorriquena and taca based in el salvador and representing several airlines of central america costa rica guatemala honduras and nicaragua all the previous airlines started regular operations well before world war ii puerto rican commercial airlines such as prinair oceanair fina air and vieques air link came much after the second world war as did several others from other countries like mexico s interjet and volaris venezuela s aserca airlines and others the air travel market has evolved rapidly over recent years in latin america some industry estimates indicated in 2011 that over 2 000 new aircraft will begin service over the next five years in this region 93 these airlines serve domestic flights within their countries as well as connections within latin america and also overseas flights to north america europe australia and asia only four airline groups avianca panama s copa mexico s volaris and latam airlines have international subsidiaries and cover many destinations within the americas as well as major hubs in other continents latam with chile as the central operation along with peru ecuador colombia brazil and argentina and formerly with some operations in the dominican republic the avianca group has its main operation in colombia based around the hub in bogotá colombia as well as subsidiaries in various latin american countries with hubs in san salvador el salvador as well as lima peru with a smaller operation in ecuador citation needed copa has subsidiaries copa airlines colombia and wingo both in colombia while volaris of mexico has volaris costa rica and volaris el salvador and the irelandia group formerly included viva aerobus of mexico viva colombia and viva air peru regulation edit this section needs more citations please help improve this section by adding citations to reliable sources unsourced material may be challenged and removed july 2020 learn how and when to remove this message national edit union jack tails of british airways uk s flag carrier many countries have national airlines that the government owns and operates fully private airlines are subject to much government regulation for economic political and safety concerns for instance governments often intervene to halt airline labor actions to protect the free flow of people communications and goods between different regions without compromising safety the united states australia and to a lesser extent brazil mexico india the united kingdom 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 enter and exit routes easily and to levy airfares and supply flights according to market demand the entry barriers for new airlines are lower in a deregulated market and so the u s has seen hundreds of airlines start up sometimes for only a brief operating period this has produced far greater competition than before deregulation in most markets the added competition together with pricing freedom means that new entrants often take market share with highly reduced rates that to a limited degree full service airlines must match this is a major constraint on profitability for established carriers which tend to have a higher cost base as a result profitability in a deregulated market is uneven for most airlines these forces have caused some major airlines to go out of business in addition to most of the poorly established new entrants in the united states the airline industry is dominated by four large firms because of industry consolidation after fuel prices dropped considerably in 2015 very little of the savings were passed on to consumers 94 international edit international civil aviation organization headquarters in montreal 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 airports 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 airports 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 these agreements 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 economy edit this section needs more citations please help improve this section by adding citations to reliable sources unsourced material may be challenged and removed january 2020 learn how and when to remove this message see also aviation taxation and subsidies in 2017 4 1 billion passengers have been carried by airlines in 41 9 million commercial scheduled flights an average payload of 98 passengers for 7 75 trillion passenger kilometers an average trip of 1890 km over 45 091 airline routes served globally in 2016 air transport generated 704 4 billion of revenue in 2016 employed 10 2 million workers supported 65 5 million jobs and 2 7 trillion of economic activity 3 6 of the global gdp 95 in july 2016 the total weekly airline capacity was 181 1 billion available seat kilometers 6 9 compared to july 2015 57 6bn in asia pacific 47 7bn in europe 46 2bn in north america 12 2bn in middle east 12 0bn in latin america and 5 4bn in africa 96 top 150 airline groups 97 2016 2015 2014 2013 2012 2011 2010 2009 2008 revenue bn 694 698 704 684 663 634 560 481 540 operating result bn 58 9 65 0 30 4 27 5 20 7 21 3 32 4 1 7 15 3 operating margin 8 5 9 3 4 3 4 0 3 1 3 4 5 8 0 4 2 8 net result bn 34 2 42 4 11 7 15 3 4 6 0 3 19 0 5 7 32 5 net margin 4 9 6 1 1 7 2 2 0 7 0 0 3 4 1 2 6 0 costs edit an airbus a340 600 of virgin atlantic in october 2008 virgin atlantic offered to combine its operations with bmi in an effort to reduce operating costs 98 airlines have substantial fixed and operating costs to establish and maintain air services labor fuel airplanes engines spares and parts it services and networks airport equipment airport handling services booking commissions advertising catering training aviation insurance and other costs thus all but a small percentage of the income from ticket sales is paid out to a wide variety of external providers or internal cost centers moreover the industry is structured so that airlines often act as tax collectors airline fuel is untaxed because of a series of treaties existing between countries ticket prices include a number of fees taxes and surcharges beyond the control of airlines airlines are also responsible for enforcing government regulations if airlines carry passengers without proper documentation on an international flight they are responsible for returning them back to the original country analysis of the 1992 1996 period shows that every player in the air transport chain is far more profitable than the airlines who collect and pass through fees and revenues to them from ticket sales while airlines as a whole earned 6 return on capital employed 2 3 5 less than the cost of capital airports earned 10 catering companies 10 13 handling companies 11 14 aircraft lessors 15 aircraft manufacturers 16 and global distribution companies more than 30 99 there has been continuing cost competition from low cost airlines many companies emulate southwest airlines in various respects 100 the lines between full service and low cost airlines have become blurred e g with most full service airlines introducing baggage check fees despite southwest not doing so many airlines in the u s and elsewhere have experienced business difficulty u s airlines that have declared chapter 11 bankruptcy since 1990 have included american airlines continental airlines twice delta air lines northwest airlines pan am united airlines and us airways twice 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 fuel hedging is a contractual tool used by transportation companies like airlines to reduce their exposure to volatile and potentially rising fuel costs several low cost carriers such as southwest airlines adopt this practice southwest is credited with maintaining strong business profits between 1999 and the early 2000s due to its fuel hedging policy many other airlines are replicating southwest s hedging policy to control their fuel costs 101 operating costs for us major airlines are primarily aircraft operating expense including jet fuel aircraft maintenance depreciation and aircrew for 44 servicing expense for 29 traffic 11 passenger 11 and aircraft 7 14 for reservations and sales and 13 for overheads administration 6 and advertising 2 an average us major boeing 757 200 flies 1 252 miles 2 015 km stages 11 3 block hours per day and costs 2 550 per block hour 923 of ownership 590 of maintenance 548 of fuel and 489 of crew or 13 34 per 186 seats per block hour for a boeing 737 500 a low cost carrier like southwest have lower operating costs at 1 526 than a full service one like united at 2 974 and higher productivity with 399 746 asm per day against 264 284 resulting in a unit cost of 0 38 cts asm against 1 13 cts asm 102 mckinsey observes that newer technology larger aircraft and increasingly efficient operations continually drive down the cost of running an airline from nearly 40 us cents per ask at the beginning of the jet age to just above 10 cents since 2000 those improvements were passed onto the customer due to high competition fares have been falling throughout the history of airlines 103 revenue edit diagram of an airline global distribution system airlines assign prices to their services in an attempt to maximize profitability the pricing of airline tickets has become increasingly complicated over the years and is now largely determined by computerized yield management systems because of the complications in scheduling flights and maintaining profitability airlines have many loopholes that can be used by the knowledgeable traveler many of these airfare secrets are becoming more and more known to the general public so airlines are forced to make constant adjustments most airlines use differentiated pricing a form of price discrimination to sell air services at varying prices simultaneously to different segments factors influencing the price include the days remaining until departure the booked load factor the forecast of total demand by price point competitive pricing in force and variations by day of week of departure and by time of day carriers often accomplish this by dividing each cabin of the aircraft first business and economy into a number of travel classes for pricing purposes a complicating factor is that of origin destination control o d control someone purchasing a ticket from melbourne to sydney as an example for a 200 is competing with someone else who wants to fly melbourne to los angeles through sydney on the same flight and who is willing to pay a 1400 should the airline prefer the 1400 passenger or the 200 passenger plus a possible sydney los angeles passenger willing to pay 1300 airlines have to make hundreds of thousands of similar pricing decisions daily 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 through computers new airfares can be published quickly and efficiently to the airlines sales channels for this purpose the airlines use the airline tariff publishing company atpco who distribute latest fares for more than 500 airlines to computer reservation systems across the world the extent of these pricing phenomena is strongest in legacy carriers in contrast low fare carriers usually offer pre announced and simplified price structure and sometimes quote prices for each leg of a trip separately computers also al...
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