The 1980s and 1990s
The 1980’s began slowly for the airline industry, but ended with a sudden revenue
growth. Early in the 1980’s international deregulation started to appear in the form of
open skies agreements. From 1987-1989 more than one billion passengers travelled by air
on an annual basis. This increase in passenger traffic began to result in issues of
congestion in the air and on the ground. Airline privatization trends and foreign
ownership continued into the 1990’s.
Recent Challenges: 2000 and beyond
In recent years, the air transportation industry has faced several serious challenges.
Airlines have increasingly become targets of terrorism related to international political
tensions. The tragedy of September 2001 involving terrorist use of four aircraft in the
United States, and the rise of terrorists targeting airports has had serious economic effects
on the industry. Other factors, such as the SARS (Severe Acute Respiratory Syndrome)
epidemic of 2003 and the Avian Flu have also had a negative impact, resulting in the
reduction of air travel.
However, despite these setbacks, experts are optimistic and predict growth of the
airline industry over the next decades. Reasons for optimism include economic growth
worldwide, increase of disposable income, continued deregulation and development of
low-cost carriers.
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During this time they were faced with heavy capital investments, escalating fuel costs and
global inflation. Hijacking throughout the world in the 1970’s was at an all time high