Erick Burgueño Salas
Research expert covering climate change and the water industry
Get in touch with us nowTypes of airlines
In 2021, 61 airlines in the United States were in operation, of which 18 are classified as major carriers with over one billion U.S. dollars in revenue. Broadly, the airlines in the U.S. can be divided into three main categories: full-service legacy carriers, low-cost carriers, and regional carriers. Legacy carriers are those airlines with established interstate routes at the time of the airline industry deregulation in 1978. In the decades since, the three giant legacy carriers - Delta, American, and United – have collectively merged with or acquired most carriers existing before deregulation. Alaska Airlines and Hawaiian Airlines are the only other legacy carriers operating. The legacy carriers presently account for over half of the domestic market.Low-cost carriers emerged since deregulation and have fundamentally changed the airline industry by offering significantly cheaper fares than full-service carriers. This is mainly achieved through charging extra for services like checked baggage, food and beverages, and inflight entertainment. U.S. low-cost carrier Southwest is the world's largest, while JetBlue and Spirit Airlines are in the top ten. Other U.S. low-cost carriers include Allegiant and Frontier. Interestingly, several low-cost carriers consistently outscore the full-service carriers for customer satisfaction.
Finally, regional carriers are those with operating revenue of below 100 million U.S. dollars and provide services to communities too small to justify the presence of a mainline carrier. The regional segment differs in that while the overall U.S. air travel industry has been growing, the number of regional airlines and passengers transported has declined. High operating costs, low demand, and the effects of the pilot shortage are the factors generally provided to explain this decline.
Impact of the COVID-19 pandemic on U.S. airlines
The spread of the coronavirus greatly impacted the U.S. aviation industry, with the number of passengers decreasing drastically from 860 million passengers in 2019 to 348 million in 2020. The sharp decline in passenger traffic led to the drastic financial performance of U.S. airlines. American Airlines' revenue fell from 45.8 billion U.S. dollars in 2019 to 17.3 billion U.S. dollars in 2020. Southwest Airlines also saw its revenue streams decrease from 22.4 billion U.S. dollars to only nine billion U.S. dollars that year. 2021 brought a fresh breath of air to the industry. The number of passengers boarded improved to 632.4 million, but it was still 26 percent less than the number of passengers transported in 2019.
