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THE PRESENT ENVIRONMENT 29 2â The Present Environment The environment began to change in the mid-1970s. A series of events, both domestic and international, has altered the U.S. outlook. Evaluating the significance of these events and predicting the emerging trends is complicated by the deep recession of 1981â1982 that has affected civil air travel and aircraft procurement worldwide. The events of special note include: uncertainties in the financial status of U.S. airlines resulting from an inability to match revenues to increases in operating costs and deregulation of routes and fares; growing emergence of serious foreign competition in aircraft manufacturing; increasing importance of international markets; escalation of financial risks in the development, manufacture, and marketing of new aircraft; internationalization of aircraft manufacture; and foreign government involvementâsome would say participationâin the industry. CHANGES IN U.S. AIR TRANSPORTATION System Development The modern U.S. air transport industry evolved in the decade immediately after World War II. It comprised a small group of major carriers that were the launch customers for new aircraft, augmented by a group of other growing carriers that tended to be followers and a group of unscheduled charter operators with older equipment that emphasized low fares and minimum service. As in other countries, U.S. government regulation through the CAB controlled routes and fares. Consequently, airline competition concentrated on lobbying for attractive new routes and provision of more attractive passenger service, i.e., convenience of schedule and in-flight amenities. Fares were based on average costs, which continued to decrease as the size and efficiency of each new transport airplane improved the cost performance of the