Part one looks at key metrics in the global airline industry, such as growth and operating income as well as expense patterns since 2004. The overall picture is favorable. Revenues are at an all-time high, driven by passenger traffic rather than cargo. Expense growth is up as a result of increases in non-fuel items, such as labor and maintenance. The regional outlook shows North American carriers in the most favorable position, followed by Asia-Pacific carriers. All carriers face more aggressive competition in the coming year: an expansion of the low-cost carrier (LCC) business model, the rapid growth of airlines in the Middle East, and an increase in joint ventures to allow more international flights