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Why it's high risk, high reward for airlines

By Katie Pisa and Tracey Hobbs, for CNN
updated 7:29 AM EDT, Tue June 3, 2014
STORY HIGHLIGHTS
  • The first commercial flight took place 100 years ago in Tampa Bay, Florida
  • Since then, many airlines have been consolidating
  • Today's airlines must be global in every way in order to survive, says IATA chief

CNN celebrates 100 years of commercial aviation with a week of programming presented by resident travel expert Richard Quest.

(CNN) -- Faster than you can catch the red-eye from New York to London, the world's airlines have to keep evolving in order to stay resilient in the global world of commercial aviation.

With 8 million passengers taking a plane each day, the 3 billion journeys made last year are more than just a flight for many. They are the hopes and dreams of deals to be done, families to be reunited and ambitions to be realized.

The first commercial flight 100 years ago was a 23-minute journey in a flying boat across Tampa Bay, Florida in 1914. The Mayor of St. Petersburg, Florida, at that time paid $400 -- about $9,000 today -- to become the world's first paying passenger.

Since the birth of commercial aviation the airline industry has been characterized by the concept of risk versus reward, with some of the best-known names failing, many merging and consolidating along the way.

We are the industry that makes global possible ...
Tony Tyler, CEO, International Air Transport Association

Pan American World Airways was one of the first to blaze a trail across the Atlantic with its spacious cabins, ladies-only powder rooms and modest overhead lights. But even for Pan Am it wasn't enough to keep the company financially astute.

"These names have gone, the Pan Ams and the British Caledonian and others, but of course their businesses went into other businesses, and that tells us that consolidation is the way forward in this industry," Tony Tyler, CEO of International Air Transport Association (IATA), told CNN's Richard Quest at the group's 70th AGM in Doha, Qatar.

The industry has suffered as much turbulence in the pocket as it has in the air, and American Airlines is another example of risk versus reward. After its recent bankruptcy, it was the last major U.S. carrier to merge, with U.S. Airways.

There's no better example of risk and reward than the Boeing 747, the Jumbo Jet. The world's first wide-bodied, double decker plane, it was built by Boeing in the 1960s, which literally bet the company on the plane's success.

According to Tyler, a key to success in the future is sticking to a global mindset. "The point is this is a global industry, it's become global over the last 100 years," he told Quest. "We are the industry that makes global possible and what that means is that everyone in it needs to understand they are part of a global network. They're part of a global system and they need to think globally in everything they do."

While today's airplanes are a century away from that flying boat that crossed Tampa Bay, there's no doubt that the risk and reward still remain just as high as they did 100 years ago.

Timeline: 100 years of commercial aviation

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