There were about 725 airlines in the world in 2012 providing different range of services. Theoretically, air transport enjoys greater freedom of route choice than most other modes. Yet while it is true that the mode is less restricted than land transport to specific rights of way, it is nevertheless much more constrained than what might be supposed. Early in the history of aviation, physical obstacles such as the Rocky Mountains and the great gap of the North Atlantic limited the articulation of air transport networks. While those limitations have fallen, physical geography still affects the geography of intercity air transportation. Weather events such as snowstorms and thunderstorms can temporarily create major disruptions. Aircraft seek, for instance, to exploit (or avoid) upper atmospheric winds, in particular the jet stream, to enhance speed and reduce fuel consumption. Volcanic eruptions may also impede air travel by releasing ash in the atmosphere, which can damage and even shot down turbofan engines. Such occurrences are however rare and punctual, with the exception of April 2010 when a volcanic eruption in Iceland forced the closing down of airports in most of Europe as well as several North Atlantic routes. This represented the largest natural disruption of air travel in history.
Yet the limitations that structure air transportation are mainly human creations. First, in the interest of air safety, air traffic is channeled along specific corridors so that only a relatively small portion of the sky is in use. Jetway 554, for example, which passes from high over the Michigan-Indiana state line towards Jamestown, New York via Southern Ontario, accommodates flights from many different cities in the West and Midwest bound for the Northeast, with nonstop city-pairs such as San Diego-Boston, Chicago-Albany, Phoenix-Providence, and Los Angeles-Hartford. China is facing significant air capacity constraints not because its airports are congested, but mostly because a large segments of its airspace is regulated by the military.
Strategic and political factors have also influenced route choice. For example, the flights of South African Airways were not allowed to over-fly many African nations during the apartheid period, and Cubana Airlines has been routinely prohibited from over-flying the US. Even more significant was the opening up of Siberian airspace to Western airlines after the Cold War. The new freedom permitted more direct routes not only between cities like London and Tokyo or New York and Hong Kong but also between transpacific city pairs like Vancouver-Beijing. Few large areas of airspace forbidden to carriers on political grounds remain. However, the intervention of the state in airline networks remains pervasive. From its infancy, air transport was then seen as a public service and as an industry that should be regulated and protected. In many parts of the world, government intervention in the industry took the form of state-owned airlines. As recently as the early 1970s, Air Canada, Air France, British Airways, Japan Airlines, Qantas, and most other flag carriers throughout the world were fully state-owned. In the US, the government did not own any airlines but it did strongly affect the industry’s development via regulation of fares, in-flight service, routes, and mergers.
Beginning in the 1970s, the relationship between the airline industry and the state changed, although the timing of liberalization (a term which refers to both deregulation and privatization) and its extent has varied among the world’s main markets. Across the globe, dozens of airlines have been at least partially privatized, and many airline markets have been deregulated. In the United States, the Air Deregulation Act of 1978 opened the industry to competition. The results, seen from the vantage point of more than 25 years later, have been dramatic. Once hallowed names, like TWA, Pan Am, and Braniff sank into bankruptcy (though Pan Am has been reborn as a much smaller carrier along the Atlantic coast) and many new players emerged. Most lasted only a short time, but some have had a profound, enduring effect on the industry and air transportation more generally