The dream has always been to fly. That famous flyer of Greek mythology, Icarus, flew too close to the Sun and his wax wings melted. The Wright Brothers of North Carolina managed in 1903 to fly their Kitty Hawk a few hundred feet across a field and just barely above the ground.

Nowadays, though travel by air is so common that, on a global basis, 2.6 billion passengers a year take 30 million flights over more than 1.3 billion miles (2 billion km) on more than 23,000 commercial aircraft that provide service to 3,700 airports. This volume of traffic, growing globally at an estimated rate of 4%, makes the airline business one of the largest of any in the world economy.

Despite its enormity, the increasingly complex and technologically sophisticated airline industry is guided by relatively simple and readily analyzed economic principles. Its history of development can be roughly divided into five distinct phases: a) the early era of technological and regulatory implementation lasting from 1900 to 1930; b) air travel and transportation becoming an ingrained component of the overall economy in both war and peace, 1930 to 1960; c) the era of jets and jumbos, 1960 to 1980; d) the era of deregulation, 1980 to 2000; and e) the current period of financially forced restructuring and rationalization and technologies that allow passengers to book trips and compare prices online. A sixth era, that of significantly higher oil prices, arguably began in 2008, when the price spiked to around $145 a barrel and, after a steep decline, had rebounded back to more than $110 a barrel by 2011.