LOGISTICS,air transport history

History of Air Transportation---History of Commercial Air FreightEarly aviation promoters were always looking for practical uses for the airplane. One idea was to use them as carriers of freight. The first practical demonstration of air freight occurred in November 1910 when a department store shipped a bolt of silk by air from Dayton to Columbus, Ohio. Reported in the local Columbus newspaper, the story noted that the shipment had beaten the railroad express between the two cities. In 1919, American Railway Express used a converted Handley-Page bomber in an attempt to fly 1,100 pounds (500 kilograms) of freight from Washington, D.C., to Chicago. A frozen radiator forced the plane to land in Ohio but the company continued its efforts to move freight by air. Airlines across the country flew freight in the late 1920s, benefiting American businesses when they needed parts or merchandise as quickly as possible. The advent of air freight also allowed businesses to keep fewer inventories on hand.During the 1920s, the volume of freight shipped by air grew significantly. In 1927, only 45,859 pounds (20,801 kilograms) were shipped. By 1929, the figure had grown to 257,443 pounds (116,774 kilograms) and by 1931 to more than 1 million pounds (453,592 kilograms) per year. In addition to the air freight flown by American Railway Express, Henry Ford's express company carried 1 million pounds of freight for the Ford Company when it started in 1925, and averaged more than 3 million pounds (1.36 million kilograms) by the end of 1929. The U.S. Post Office also shipped additional air freight.Although there were a few attempts to organize air freight airlines from the 1920s on, the first commercial airlines that were all-cargo did not emerge until after World War II.National Air Transport, one of the companies that originally made up United Airlines, was founded on November 14, 1926, for the purpose of carrying parcels. This airline delivered the first air cargo in the United States on September 1, 1927, between Dallas and New York. Another company that was an early promoter of air cargo was American Railway Express (renamed Railway Express Agency or REA in March 1929), a firm that managed to get a group of small airlines to contract to deliver freight. A competitor to REA was General Air Express, founded in 1932. Because of low rates, neither company made much money in the early 1930s. Air freight at the time contributed just fewer than four percent of all air traffic revenues. Eventually, the two companies, REA and General Air Express, found it useful to combine their operations. Beginning in February 1935, they operated as one.United Airlines began its own air freight delivery service just before the beginning of World War II. On December 23, 1940, the airline inaugurated what some historiansbelieve was the first all-cargo service in U.S. airline history. The airline used Douglas DC-4 aircraft to deliver mail from New York to Chicago and back. The route was short-lived and ended within five months. Air freight remained a sideline operation to mail and passenger traffic until March 14, 1941 when the big Fourairlines—United, American, TWA, and Eastern—formed Air Cargo, Inc., to deliver freight. Air Cargo began operations in December 1941 and operated through most of the war. Its last regular flight was in November 1944. By the end of the war, many of the airlines, including United and TWA, began their own independent air freight services.In general, entrepreneurs found it difficult to enter the air freight market because of resistance from the established passenger carriers. The passenger airlines believed that new air freight airlines that offered low rates and irregular services would destabilize the whole commercial aviation sector. The established air carriers, who had formed Air Cargo, Inc., were especially afraid of smalltime operators such as Slick Airways, Flying Tiger, California Eastern, and others. Through the late 1940s, these small airlines, the established giants, and the government's Civil Aeronautics Board (CAB) wrangled over how to hand out contracts and set the proper rates for freight transport. In August 1949, the CAB finally gave permission to four all-freight airlines to operate. These were Slick, Flying Tiger, U.S. Airlines, and Air news.Neither U.S. Airlines nor Air news survived long. U.S. Airlines operated for a while on the New York-Miami route on Air Force contracts but a series of accidents in 1952 as well as the threat of bankruptcy folded the airline. Air news met a similar fate in June 1951 after incurring heavy losses.The two that did survive were Slick Airways, which was founded by Earl F. Slick in January 1946, and Flying Tiger. When it began service, Slick operated a fleet of 10 Curtiss C-46E aircraft. By the end of the 1940s, the company had become the country's most successful all air freight operator. Although Slick enjoyed moderate growth, it also faced problems. Established passenger carriers such as American Airlines had introduced all-freight flights that offered stiff competition. Since the passenger airlines could rely on established facilities and routes, their fixed costs for transporting cargo were lower. Under threat from the passenger airlines, Slick and Flying Tiger decided to merge into one airline in 1954. Unfortunately, labor problems at both airlines prompted them to abandon this idea. The failure to merge was a big blow to both airlines. Slick continued operations for a while but temporarily closed down in February 1958, unable to compete with the big passenger airlines. The company claimed that lack of government support for all-freight airlines had been the major cause of their downfall. Although Slick resumed operations in October 1962, the CAB eventually suspended Slick's activities in August 1965. The company's operations were acquired by other smaller freight carriers.Flying Tiger Line fared much better. The airline had been founded on June 25, 1945, by Robert Prescott, a C-46 flying Tigers pilot during the war. Prescott started with afleet of 14 Budd RB-1 Conestoga aircraft, bizarre-looking wafer-thin stainless steel planes that did not have very good flying characteristics. Beginning in August 1945, Prescott's pilots were flying coast-to-coast carrying freight. Unlike Slick, Prescott made sure to diversify into both military and civilian markets. The company survived the competition with established passenger airlines partly because of its diversified customers and partly because of favorable CAB judgments. Although Flying Tigers faced stiff competition in the early 1960s from new small-time cargo carriers, it did well. The airline also signed cooperative agreements with rail companies to deliver its freight door-to-door. By the mid-1960s, Flying Tigers was making an annual profit of $20 million and was the largest air cargo airline in the country. Its only real competitor was Airlift International, Inc., a much smaller company that had inherited some of Slick's assets.Despite widespread hopes for a vibrant industry, the air freight industry did not grow as expected. Air freight, in fact, remained a very small part of total air traffic. Many who tried to break into the air freight business did not survive their heavy losses. Flying Tigers remained an exception; most of the big-time operators such as Slick and Airlift faded from the scene. Major passenger airlines such as United Airlines continued to play a large role in the freight industry. In March 1964, United became the first airline in the country to offer nonstop transcontinental all-cargo service.Flying Tiger flew Boeing 747s in the 1980s.It was only in the 1980s that a new airline changed the face of the air freight business.A young entrepreneur named Fred Smith believed that combining passenger air traffic with freight air traffic, as the established airlines were doing, was not the most efficient way of doing business. He believed that the route patterns for the two were totally different. He also argued that combining freight with passenger traffic slowed down cargo delivery. Smith, with a lot of financial support, built a hub in Memphis, Tennessee, for his exclusive freight air delivery service, which he called Federal Express. One of the most important selling points was his idea of next-day delivery, a service that he guaranteed. The company began operations in April 1973 and while the initial years were financially difficult, by 1976, Federal Express was showing a profit. By 1982, the company had as many as 76 aircraft, including 39 Boeing 727s and four Douglas DC-10s. In 1983, the company reported revenues of $1 billion, anunheard of amount for a company that had existed for only ten years.In 1989, Federal Express acquired Tiger International, Inc., the owners of Flying Tigers. The two airlines merged in August 1989. As a result, Federal Express became the world's largest full-service all-cargo airline. In 1994, the company officially changed the name of its operating division to FedEx.United Parcel Service (UPS), one of FedEx's main competitors, also maintains a large presence in both the air freight and airmail markets. The origins of UPS go back as early as 1907 to a bicycle-based delivery service. In its early years of operation, UPS primarily focused on contract service to retail stores. It was only in the 1950s that the company diversified into package delivery for a wide range of customers including private and commercial clients. UPS operated a short-lived air service beginning in 1929, but the company began sustained air service via its UPS Blue Label Air much later—in 1953. In 1988, UPS received permission from the FAA to operate its own airline (as opposed to leasing), known as UPS Airline. Since then, UPS Airline has grown dramatically, and by 2001, was the ninth largest airline in the United States. On average, UPS delivers 2 million air express packages and documents per day. In the 1980s, UPS also expanded into international routes for documents and small packages.At the turn of the century, the air freight industry remains a mix of dedicated large companies (such as FedEx), small-time operators (such as OCS Air Freight), and passenger airlines (such as United Airlines) that operate cargo divisions.On January 1, 1914, a wealthy manufacturer named Thomas Benoist launched air service between Tampa, Florida, and nearby St. Petersburg. Those towns were separated by Tampa Bay; the only connections were by once-a-day boat or by railroad. His airline drew business all through the winter, but his prospects faded with the coming of spring, when the tourist season ended. His airline shut down then and did not resume its flights.No one else tried to carry passengers by air for several years, and there was a reason: railroads. The United States had a quarter-million miles of track, with rail carriers offering fast, convenient service from downtown terminals.Early airline builders therefore tried a different approach, by carrying airmail. The U.S. Post Office became involved, and President Woodrow Wilson was present when the first airmail flight left Washington, D.C., for New York. The pilot, who should have been heading north, followed railroad tracks south and wound up in southern Maryland, but other flights were more successful.The planes of the day were little faster than mail trains, and aviators saw that their best hope lay in cross-country service. Flying at night, three pilots carried mail from San Francisco to New York on a trial flight in February 1921. In 1923, the assistantpostmaster general, Paul Henderson, began installing powerful beacon lights to mark air routes for routine night flying in clear weather. Scheduled transcontinental air service began in mid-1924.This did not suit the railroads, which depended on income from carrying the mail. In Washington, railroad lobbyists won passage in Congress of the Kelly Act of 1925, which turned the new airlines into privately owned businesses. A follow-up law, in 1926, gave the government responsibility for aircraft safety. Collectively, these acts served to create an air transport industry that was regulated by the U.S. government and received direct subsidy through a complex set of contracts awarded to airlines to carry the mail.Then in 1927, Charles Lindbergh touched off an enormous surge of interest in aviation by flying nonstop from New York to Paris. Only 5,800 passengers had flown in 1926; this leaped to 417,000 four years later. In 1930, Postmaster General Walter Folger Brown set out to encourage this trend.Brown disliked the Kelly Act. In his view it had provided overly generous subsidies for airmail, about $3 per pound. Some carriers were raking in the money just by paying postage to send cast-iron stoves as airmail. Brown won passage of a new law, the McNary-Watres Act. It changed the subsidies in ways that encouraged the airlines to carry more passengers. But airmail was still their main business, and Brown took action in that area as well.By law, he had the power to award airmail contracts to competing airlines. The nation's existing air-route map was a hodgepodge of local lines, whereas Brown wanted a few strong carriers that could serve the entire nation. Drawing on his legal powers, he awarded airmail routes to airlines that he favored, forced others to merge to qualify for his awards, and left still others to die for lack of business. When he had finished, he had a major north-south carrier, Eastern Airlines, along with three coast-to-coast airlines: TWA, American, and United.Brown's reforms worked. The airlines he selected continued to dominate the nation's air routes for the next fifty years. In addition, because people could no longer make money by shipping cast-iron stoves, they began to build good airliners that could carry passengers as well as mail. The best of them was the Boeing 247 of 1932. It had a streamlined and modern look, breaking decisively with the boxy biplanes of only a few years earlier.However, Brown was a Republican. When the Democrats returned to Washington with President Franklin Roosevelt, in 1933, they lost little time in declaring that Brown's actions amounted to a scandal. He had used his powers in high-handed ways, and Democrats declared that he and the airlines together had committed fraud. Roosevelt responded by turning the airmail over to the pilots of the U. S. Army. Itdidn't work they were unprepared, and a number of them crashed. Roosevelt had to rely on the airlines, whose pilots knew their business. But the Air Mail Act of 1934 cut their mail pay particularly sharply, forcing them to rely even more on passenger traffic for their income.This meant that they needed aircraft that could make money just by carrying people. The firm of Douglas Aircraft responded to this need with the DC-3. Introduced in 1936, it carried 21 passengers and flew nonstop from New York to Chicago. It quickly drove competing airliners from the airways, and went on to dominate American aviation. As late as 1958, as jet airliners were about to enter service, the nation's airlines counted more DC-3s than any other type of airplane.Brown left a further legacy, in the area of overseas travel. An ambitious young airline operator, Juan Trippe, convinced Brown to give him a monopoly on the right to carry airmail to foreign countries. Trippe's airline, Pan American World Airways, started with its 90-mile (145-kilometer) route in 1927 from Florida to Cuba and completed its conquest of Latin America in 1930, with 20,308 miles (32,683 kilometers) of airway in 20 Latin American countries.Profits from these Latin American routes subsidized Trippe's losses as he constantly expanded his operations. In 1935, he introduced his four-engine Clipper flying boats on a route that crossed the Pacific, reaching from San Francisco to the Philippines. He carried few passengers the round-trip fare equaled a workingman's wages for an entire year garnered priceless publicity. Then in 1939, just before the war, he introduced commercial service across the Atlantic.The air transport revolution swung into full power with the building of advanced new airplanes in the latter 1930s. Donald Douglas' twin-engine DC-3 ruled the passenger skies for much of the 1930s and 1940s, but carriers also expressed much interest in four-engine airliners. These could carry more passengers at higher speeds, while carrying extra gasoline for longer range. Two aviation leaders competed for advantage in this field: Donald Douglas, whose firm of Douglas Aircraft was building the DC-3, and Howard Hughes.Hughes was a riverboat gambler with a lot of money and a penchant for doing as he liked. His father had made a vast fortune in oil. He started his career in Hollywood, where he discovered such stars as Jean Harlow and Jane Russell. Turning to aviation, he built a record-breaking racing plane. Then he bought control of TWA. His new airline needed aircraft and he decided he would provide the best. Working with Lockheed Aircraft, he crafted the Constellation airliner.Though designed in 1940, it looked beautiful, even by today's standards. It flew as fast as the fighter aircraft of the day, and could cross the nation nonstop. Donald Douglas had to match it, and did so with his own four-engine aircraft, the DC-6 andDC-7. The rivalry between these airliners and the Constellation then spearheaded the development of advanced commercial airliners until the coming of the jets.The first jet engines were war babies, entering service with high-speed fighters late in World War II. Boeing took the lead in crafting large jet bombers: the six-engine B-47 and the eight-engine B-52. However, early jet engines gulped fuel at excessive rates, which drove up costs and limited their range. Airline executives distrusted them. These people expected that while a commercial jetliner would be speedy, it would lose money.Juan Trippe had different ideas. He learned that better engines were coming along, and he had enough money to order new engines that were better still. He proceeded to play Boeing against Douglas Aircraft, promising each that he would place extensive orders if either could build the long-range jetliners that he wanted. Douglas responded with the DC-8; Boeing came out with the 707. Other airlines ordered their own jets, knowing that if they didn't, Pan Am would walk off with their passengers. Boeing proved particularly capable at tailoring versions of the 707 that met the needs of individual carriers, and this company surged to the lead in sales.But during 1956, as orders for the 707 and DC-8 mounted, the nation's airways were far from ready for the new jets. They needed radar and electronic aids to navigation, which were in short supply due to federal budget cuts. Then in June 1956, a DC-7 and a Super Constellation collided over the Grand Canyon, killing 128 people. This drove home the point that the air routes were unsafe even for fast propeller-driven aircraft. Congress responded with a gush of dollars, and soon the needed equipment was in place.The Fed Ex cargo airline used Boeing 727 aircraft for both U.S. and European serviceThe new jets entered service in large numbers during the 1960s. Passengers responded in droves, for these airliners were both fast and comfortable. Demand soared, leaping from 62 million passengers in 1960 to 169 million, nearly three times as many, in 1970. Juan Trippe expected that this trend would continue, as did William Allen, president of Boeing. Together they crafted an entirely new and very largecommercial jetliner that was to serve this new era the Boeing 747.Both men were visionaries; the 747 was to be their legacy, flying down the long decades that lay ahead. However, it nearly wrecked both companies. Boeing took on a great deal of debt in preparing to build it. Then it couldn't deliver them, for the engines weren't ready. In time, Boeing indeed had 747s ready for customers and then orders for the new plane dried up as the nation entered a recession. Boeing fought back by offering new and highly desirable versions of earlier jets, including the 707, and came up with enough new sales to survive. Still, it had a very close call with bankruptcy.Pan Am had its own problems. By 1970 it was losing money. It nevertheless took on additional debt to purchase 747s and found itself paying very high interest rates. The recession hurt that airline as well. It survived, at least for a while, with help from the International Air Transport Association. IATA was a cartel, which enforced a worldwide agreement that kept fares high. Pan Am remained weak, but it managed to fly through the 1970s.For half a century, the nation's airlines had been a heavily regulated industry in which competition was more in the way of service than in fares, and this regulation prevented new airlines from entering the market while stabilizing those already operating. These arrangements came to an end in 1978, as the nation entered an era of deregulation. Airline executives won new freedom to introduce cut-rate fares and to serve new routes, as well as to abandon less lucrative routes thereby limiting or ending service altogether for some cities, while new carriers such as People Express won the right to offer service as well. For travelers, the consequences brought a bonanza, with passengers saving $100 billion in ticket fares during the first ten years. There was a price for this, of course, as travelers soon learned that their travel schedules could be quite inconvenient, airline service was reduced, and flights to less attractive destinations were unavailable.Some of the traditional carriers did not survive deregulation. For instance, already weak Pan Am needed new routes and new aircraft. It lacked both money and credit, and losses soon mounted. It survived for a time by selling off its holdings, including the famous Pan Am Building on Manhattan's Park Avenue. In 1991, it declared bankruptcy and went out of business.A corporate raider, Frank Lorenzo, purchased control of Eastern Airlines. He worked vigorously to cut the pay of his employees and soon found himself in a battle with his labor unions. When the smoke cleared, Eastern also was bankrupt. The magazine Business Week described it as "one of the few large bankruptcies in history that won't even has enough money left to pay off the lawyers."Other airlines also fell short. Braniff Airways gambled that new aircraft would help itrecover market share only to fly into a time of high fuel prices, high interest rates, and a new recession that cut into passenger demand. This airline ran out of cash and shut down. TWA was in and out of bankruptcy before finally folding in 2001, as it agreed to sell its assets to American Airlines. As the new century began, the nation counted only three strong surviving carriers: American, United, and Delta.Among the plane builders, Boeing faced an increasingly strong challenge from a European group, Airbus Industries. Boeing and Airbus both offered airliners in a wide array of sizes and ranges to meet the needs of their customers. Boeing covered losses with profits from its 747; it has sold more than a thousand of them, at prices up to $177 million. Airbus, with close ties to the governments of Europe, has covered its own losses with subsidies.In addition, the Europeans now are building something new: the Airbus A-380. This is to be the world's largest airplane, with two complete decks of seats. The biggest current version of the Boeing 747 seats 421 passengers; the A-380 is to carry as many as 656.In the United States, airline traffic topped 600 million passengers per year in 2001, for a fourfold increase in just 30 years. New airports could help relieve this congestion, but the nation recently has built only one large new one near Denver. Everywhere else, plans for new airports have faced stiff competition. It has also proven difficult to build new runways at existing airports although much effort is underway to expand on numerous airports around the nation.。