The Airline Industry

 

 The Airline Industry

   Since the first scheduled passenger service of the 120-mile distance between Los Angeles and San Diego, the airline industry has undergone dramatic changes. Today, the U.S. airline industry employs more than 355,000 people, operates over 4,500 aircraft, and serves over 380 million passengers.

   Tremendous growth has occurred in the industry. Flying once a glamorous experience, has become today's mass transportation. Since 1975, the number of available seat-miles (one airline seat transported one mile) has increased by 80 percent, and the number of passengers has increased 85 percent. Capacity uutilization has improved, with load factors rising from 53.7 percent to 61.6 percent. With the exception of a slight dip in 1982, passenger revenues have steadily increased.

   Net operating profit has followed a more erratic course, with the 1978 record profits exceeding $1 billion in sharp contrast to the red ink that flowed in the 1981-83 time period. The industry returned to profitability in 1984, and earned profits in excess of $860 million in 1985.

   Airlines are classified into three principal groups - majors, nationals, and regionals. The majors (sometimes referred to as trunks) have annual revenues exceeding $1 billion. Nationals are those carriers with annual revenues between $75 million and $1 billion. Regional airline's revenues are less than $75 million.