Alexandre A. Fidelia
11/12/2014
Dr.Furfero
Econ 2327
Airline Industry
The beginning: On December 17, 1903 the Wright brothers successfully took flight for the first time in history. From that moment the brothers open doors for designers such as Thomas Benoist who design the first commercial flying airboat the Flying Boat No 43 and Koninklijke Luchtvaart Maatschappij (KLM) the oldest international airline service.1 The first scheduled flight As a means to attract more tourists during the winter St. Petersburg officials funded the St. Petersburg-Tampa airboat line. On January 1, 1914 Thomas Jannus piloted the first commercial flight in history with former mayor Abram C. Pheil as his passenger. The flight from St. Petersburg to Tampa, Florida lasted a total of 23 minutes a significant improvement over the 2 hour trip by boat. Scheduled flights were set at $5 twice a day per passenger. Unfortunately as the winter came to an end so did the flights. Though the flights lasted a limited time the airline carried 1,204 passengers.2

The oldest airline
KLM began its first flight operation in 1919 by opening its first office on Heerengracht in The Hague. The following year it began its first KLM managed to schedule its first flight between Amsterdam and London. Granted that flying was rare back then it transported 345 passengers, 25,000 kilos of cargo and mail. From that moment KLM began flourishing, in 1924 a Fokker F-VII made its first departure from Amsterdam to the capital of Indonesia. Ten years later the Dutch airline became the first to cross the Atlantic heading for Curacao. Following WWII KLM became the first European airline to begin scheduled transatlantic services to New York. 3
Air mail
After WWI the US believed that planes had developed enough for the innovation of airmail. In 1917 congress funded $100,000 in an effort to develop transportation of mail via air. The experiment would be conducted by the army and the Post Office between New York and Washington D.C pit stopping at Philadelphia. The first official flight took place on May 14, 1918 from Belmont Park, Long Island to Philadelphia and proceeded to Washington D.C the following day. With an excess of planes remaining after WWI the Post Office began preparations for transcontinental air service. The transcontinental air service sparked the airmail service between Chicago and Cleveland on May 15, 1919 ending its air route on September 8, 1920. Around the time planes were unable to fly at night so trains delivered the mail for remainder of the trip. By using airmail services the Post Office saved 22 hours from coast to coast delivery.

Civil Aeronautics Act of 1938 As a way to encourage flying the federal government granted contracts to carriers to deliver the countries mail by air during the 1920s. Afterwards air contracts became a privilege offering rights to permanently fly over major cities and routes. Thus began monopolistic rights which would eventually become the Civil Aeronautics Act of 1938. The Act would then establish the Civil Aeronautics Board (CAB) making it responsible for interstate flights. In order to promote safety, sound economic conditions, and proper adaptation of flights for the nation’s postal, commercial, and defensive needs. CAB was given four initial keys to mandate its power
1. Grant or deny airline permission to fly interstate routes
2. Power to approve or disapprove fares
3. Approve or deny mergers consisting of certified carriers, with approval granted by the antitrust law.
4. The power to approve or disapprove secret agreements between carriers
With the success of CAB all possible natural monopolies were eliminated making way for competition. In conclusion
The Airline industry began as a simple tourist attraction carrying two passengers across Tampa Bay. In just 30 years it manifested into a major industry crossing the Atlantic Ocean. The Airline would soon become major component in not only transporting goods, but