Air transportation is significantly younger than other modes of transportation such as roads, seaways, and railways. Following the first successful flight in 1903, the aircraft attracted investors for both manufacturing and transportation services. Beginning in the United States, the aviation industry began to expand globally. World wars boosted the aircraft manufacturing industry; after WWII, it was clear that using aircraft in battle was associated with superiority. World War II produced a large number of retired skilled pilots and mechanics who helped shape the future of modern commercial aviation. Commercial aviation began in the United States, and soon after, airline services began in Europe. Initially, the primary purpose of commercial aviation was to transport mail and cargo.

Later, airlines began transporting passengers. Airlines in the United States began operations within the country before expanding to the North Atlantic and Europe.

The jet age came up with some of the most iconic and practical aircraft, including the Boeing 707 and DC-8, which opened up new routes to Asia-Pacific. Since their inception, the majority of the major carriers have been owned or subsidised by governments or public-private partnerships.

Pan American World Airways introduced the Boeing 747 into commercial service in 1970. This iconic jet has carried the most passengers to date, with a total of 3.5 billion passengers carried by it. Several manufacturers from the United States, Canada, Brazil, Europe, the United Kingdom, and the Soviet Union began to deliver commercial jets over time.

The rise in the number of manufacturers, improved airport infrastructure, better navigation via radar, widebody long-haul airliners, improved safety record, and increase in skilled labour all resulted in lower fares. It increased the number of passengers and cargo transported via air transportation. Since the beginning, there have only been legacy carriers or flag carriers that offer full-service, expensive air travel.

Southwest Airlines, the world's first Low Cost Carrier LCC, was founded in San Antonio, Texas in 1967. The concept of a low-cost carrier (LCC) was quite novel at the time; it was a no-frills airline that was solely focused on providing low-cost air travel within the United States. This new airline business model created new opportunities for regional air travel and increased the number of flights significantly.

The total number of international passengers reached 0.2 billion in the 1980s, while domestic passengers increased to 0.6 billion. The number of passengers has continued to rise despite a series of aspects such as the Gulf War in 1990, the September 11 attacks, SARS, The Great Recession in 2007, and finally SARS-CoV-2 in 2019. Until 2019, the total number of passengers travelling by air reached 4.5 billion, just before the COVID-19 pandemic. In 2020, the total number of passengers fell to 1.8 billion, and the industry is still struggling to return to pre-pandemic levels. In terms of 2022, there are currently over 5000 airlines operating under ICAO codes around the world, with American Airlines based in the United States being the largest by fleet and number of passengers carried.

Due to the coronavirus outbreak, the global airline industry was worth at only 359.3 billion US dollars in 2020 and is expected to reach 471.8 billion US dollars in 2021. The industry includes both domestic and international passenger transportation on scheduled and non-scheduled routes, as well as cargo carriers. In 2018, global airlines earned a record $38.4 billion in net profit.

In addition to the general aviation market, it was valued at $19 billion in 2020 and is expected to reach $24 billion by 2026. In 2020, the Commercial Aircraft Market was worth USD 85.28 billion, and it is expected to grow to USD 194.51 billion by 2026. Largest aerospace manufacturers and suppliers (excluding Asian and African manufacturers) earned $449.7 billion in revenue in 2019. In 2018, the aircraft maintenance, repair, and overhaul (MRO) market generated $80.38 billion in revenue worldwide. According to IATA, global aviation supports 65.5 million jobs and has a US$2.7 trillion economic impact, accounting for 3.6 percent of global GDP.