Overview

MIT has established a multidisciplinary team of faculty, staff and graduate students drawn from the Schools of Engineering, Management and Humanities and Social Sciences to study the global airline industry. The goal of this program is to develop a body of knowledge for understanding development, growth and competitive advantage in this industry, which is one of the most diverse, dynamic and perplexing of the world.

On a global scale and especially in the United States, the airline industry has been in a financial crisis for much of this new century. The problems that began with the economic downturn at the beginning of 2001 reached almost catastrophic proportions after September 11, 2001. In the United States alone, the industry posted cumulative net losses of over $40 billion from 2001 to 2005, and only in 2006 was it able to return to the black with an overall net profit. (For more details, refer to "Impacts of 9/11 on US Airline Performance").

There is every indication that the industry is in the midst of a dramatic restructuring that involves even more fundamental changes than those experienced following its deregulation in 1978. Yet, more than three decades after deregulation – and after multiple cycles of financial successes and failures – the industry remains fragile. The industry still is recovering from its latest cycle of financial struggles, but faces substantial challenges. Competitive pressures from low-cost carriers, problems with the air transportation system’s reliability and operating performance, and volatile fuel prices all suggest that the industry is not yet at full recovery.

The Global Airline Industry Program represents a large-scale effort that provides the means for MIT and the academic community to make a "great leap forward" in studying the airline industry and in educating its future leaders. This effort was established under the umbrella of the Sloan Foundation's Industry Studies Program and is supported by the MIT Airline Industry Consortium.

The Program includes work addressing aspects of the economics, management and operations of air carriers. The scope also includes interactions with airline companies, aircraft and engine manufacturers, airports, air traffic control and regulatory or supervisory agencies such as the Federal Aviation Administration (FAA) and the International Civil Aviation Organization (ICAO).