Scheduled Air Transportation (U.S.) — Industry Primer

NAICS 2022 code 48111. NAICS is the North American Industry Classification System, the standard the U.S. (United States) government uses to group businesses. This is a five-digit "industry" that rolls up two six-digit children: 481111 Scheduled Passenger Air Transportation and 481112 Scheduled Freight Air Transportation.

1. Overview

This industry is the business of flying on a published schedule over published routes — the plane departs on time whether it is full or half-empty. It splits cleanly into two products: flying people (passenger airlines) and flying cargo (all-cargo airlines). Both sell a perishable good — an empty seat or an empty cargo hold on a departed flight is revenue that can never be recovered — so almost everything about how these companies operate is aimed at filling capacity at the best price the market will bear.

It is a large, essential, capital-intensive, and cyclical business, tightly geared to the wider economy. It booms when consumers, companies, and global trade are active, and can lose money fast when fuel spikes or demand softens. It rewards operators who manage capacity, fuel, labor, and fleet financing well, and punishes those who over-expand or carry too much debt.

The two halves look almost nothing alike as investments — and that contrast is the point of this primer. Passenger flying is roughly 96% of the industry's revenue and is the cleanest public-equity map in transportation: most large U.S. passenger carriers are listed stocks you can buy directly. Freight flying is the small ~4% remainder and has gone the other way — its biggest operators are either buried inside diversified parcel giants or have been taken private by investment firms, so public investors mostly reach it indirectly.

Forward-looking judgment: Demand for both seats and cargo should stay durable over the long run, but investor returns will hinge on capacity discipline, labor and fuel management, and balance-sheet resilience far more than on traffic growth alone — and the route to invest differs sharply between the two children.

2. What's inside — the two children, and how they differ

Both children fly on a fixed timetable under the same federal safety rulebook, but they sell different products to different customers, are owned by different kinds of investors, and are reached through different instruments. The passenger child dominates the totals; the freight child is small in the federal count but far larger in economic reality than its NAICS line suggests (see the undercount discussion in Section 3).

Two structural terms worth defining once:

• ACMI leasing (Aircraft, Crew, Maintenance, Insurance) is the freight world's signature contract: the carrier supplies the plane and its operation and gets paid a fixed rate per block hour flown, while the customer (Amazon, DHL, a forwarder, the military) supplies the freight and bears the commercial risk. It makes freight economics steadier but customer-concentrated.[13]
• Belly cargo is freight carried in the holds of passenger jets. Critically, it is booked under passenger air (481111), not freight — one reason the freight line understates the true air-cargo economy.

The most important establishment-level contrast: passenger establishments average ~262 workers (big airport hubs and stations run by large carriers), while freight establishments average ~36 (small feeder bases and cargo stations). So freight is nearly a fifth of the industry's locations but only a twenty-fifth of its revenue — a long tail of small operators around a handful of large ones.

3. How big it is (this level's rollup figures)

The figures below are our ground-truth federal data for NAICS 48111 as a whole. The two children add up to these totals almost exactly — establishments, employment, and payroll sum precisely; receipts sum to within rounding — which is a useful check that the split is clean.

Annual payroll works out to roughly $102,000 per worker on average — among the highest in transportation, consistent with a heavily unionized, high-skill workforce of pilots and mechanics.[3] The HHI (a standard concentration gauge where higher means more concentrated) of 1,349 sits in the "moderately concentrated" band regulators watch; the four largest firms take 69.8% of receipts and the top twenty take 93%.[2] Note the level is slightly less concentrated than the passenger child alone (HHI 1,465): adding the more fragmented freight firms dilutes the measured concentration.

Why the firm count doesn't add up (but everything else does). The two children report 372 + 184 = 556 firms, yet the level shows 539. Establishments, employment, payroll, and receipts are additive, but a company that flies both passengers and cargo is counted in each child and only once at the parent — so the ~17-firm gap tells you a handful of operators do both.[2]

Undercount caveat — read it by child. For the passenger 96% of this industry the federal count is reliable: it is dominated by large corporations, not government or tiny operators, so the usual coverage gaps barely matter. For the freight slice the caveat is severe and structural — but it makes the freight number too small, not the total unreliable. The ~$10 billion freight line excludes the two largest cargo fleets in the world (FedEx's and UPS's in-house airlines are classified as couriers, NAICS 492110) and all belly cargo (booked under passenger air), so true U.S. air freight is roughly an order of magnitude larger than the freight line implies.[13][14] Separately, the County Business Patterns (CBP) series covers only establishments with paid employees, so it misses the self-employed, nonemployers, and the smallest operators — which matters most in the freight-feeder and small-independent tail where individual and family ownership dominates.[4] Finally, receipts (2022) and employment/payroll (2023) are different vintages and should not be blended into one year. No values in our file are suppressed except the freight child's HHI.[2]

Physical scale (passenger). In the 12 months ended April 2026, U.S. scheduled carriers flew about 972.7 million passenger enplanements at an 82.2% load factor, with traffic above pre-pandemic peaks.[6] Counting the wider ecosystem, industry group Airlines for America estimates commercial aviation supports on the order of 10 million U.S. jobs and about 5% of GDP (gross domestic product).[6]

4. The investable universe — where value concentrates

Value in this industry is split the way the revenue is, but the access is not. Passenger flying is ~96% of the money and is almost entirely reachable on public exchanges; freight is ~4% of the (understated) money and is mostly private or embedded.

The passenger child — an unusually clean public map. Almost all large U.S. passenger carriers are listed. The network carriers (Delta, United, American) fly global hub-and-spoke systems with premium cabins and large loyalty franchises; low-cost and ultra-low-cost carriers (Southwest, JetBlue, Frontier, Allegiant) chase price-sensitive leisure demand; and regional carriers (SkyWest, Republic) fly smaller jets under contract for the majors. Equity value reflects the balance sheet as much as the operation — airlines carry heavy debt and aircraft-lease obligations, so a large operator can be a small stock. Private capital in the passenger world mostly enters around the carriers: aircraft leasing and asset finance, airline debt and distressed credit, airport concessions, and loyalty/travel-technology assets. (Tickers and market values are in Section 10.)

The freight child — mostly private or embedded. There is no large, clean U.S.-listed pure-play cargo airline. The two dominant U.S. air-cargo operators are the in-house airlines of FedEx and UPS, each a cost center inside a diversified express giant classified as a courier.[13][14] The largest dedicated freight carriers went private in 2023–2025 — Atlas Air to an Apollo-led group and Air Transport Services Group to infrastructure investor Stonepeak — so much of the dedicated U.S. freighter fleet no longer trades on an exchange.[16][17] Realistic public exposure runs through diversified logistics companies, the freighter manufacturer (Boeing), and aircraft lessors; the cleanest listed pure-play is Canadian (Cargojet). For private investors, the freight child is where the direct-ownership action is: operating platforms, aircraft assets, ACMI capacity, maintenance, and private credit secured by contracted cash flows.

Bottom line: if you want to own an airline directly, that means a passenger stock; if you want freight exposure, you almost always own it indirectly — through a diversified logistics company, an asset (planes, leases, debt), or a private fund.

5. How the money works

The two children earn their margin differently, but both live on the spread between the price of a unit of capacity and the cost of flying it.

Passenger economics turn on unit metrics and, increasingly, on fees and loyalty. Carriers sell available seat miles (ASMs) — one seat flown one mile — and get paid for the ones filled, revenue passenger miles (RPMs); load factor is the ratio of the two (~82% system-wide).[6] The gap between unit revenue (revenue per available seat mile) and unit cost (cost per available seat mile) is the operating margin — thin and volatile. Labor is the single largest cost (~38% of operating expense) and fuel is the largest swing factor.[7] The real profit engine is increasingly ancillary and loyalty revenue: bag and seat fees, and above all co-branded credit-card programs, where the five largest U.S. carriers book an estimated $28–30 billion a year selling miles to banks.[11][12] These streams are steadier and higher-margin than flying itself.

Freight economics turn on aircraft utilization and contract structure. Integrators (FedEx, UPS, DHL) don't sell air freight as a standalone product — they sell guaranteed door-to-door delivery, and the airline is one cost center whose moat is network density.[13] Dedicated carriers live on ACMI block-hour contracts (steadier, customer bears volume/yield risk) and on scheduled/charter flying (direct exposure to spot freight rates). The metrics are cargo-specific — cargo tonne-kilometers (CTK), cargo load factor, yield per tonne-km, and block hours per airframe — and none can be inferred from the passenger figures.[10]

A shared truth: fixed costs are high in both children, so small changes in how full the aircraft fly, or in fuel, drop straight to the bottom line — which is why margins across the whole industry are so cyclical. Our federal data provide no industry-wide load factor, yield, fuel, or utilization figure; those come from the operators and the trade bodies, not the Census.

6. What drives demand

• The economy and jobs. Passenger travel is highly income-elastic — consumer confidence drives leisure, corporate profits drive higher-fare business travel.
• Global trade and industrial production. Air cargo tracks world GDP and manufacturing closely and is often read as a leading indicator of trade; it earns a premium only when speed, reliability, or distance outweigh cost.
• Fares, freight rates, and fuel. Cheaper fuel lowers fares and freight rates and stimulates volume; fuel spikes do the reverse.
• Business vs. leisure mix (passenger) and e-commerce vs. industrial goods (freight) reshape who flies what and at what price — including the post-pandemic shift toward "premium leisure" and the rise (then 2025 disruption) of cross-border parcel volumes.
• Belly capacity is a supply-side swing factor for freight: when passenger flying recovers, enormous cargo capacity returns in the holds of passenger jets and undercuts dedicated-freighter yields.[10]
• Structural growth. Over long horizons air traffic has grown roughly with or faster than GDP; the Federal Aviation Administration (FAA) forecasts about 2.4% U.S. passenger growth in 2026 and near that annually for two decades, while warning that aircraft-delivery constraints will cap near-term capacity.[8]

Forward-looking judgment: The long-term demand outlook is favorable for both children, but near-term earnings can diverge sharply from traffic because excess capacity, fuel shocks, labor contracts, and aircraft shortages hit margins first.

7. Regulation

Both children operate under the same core U.S. framework: economically deregulated but heavily safety- and security-regulated. A scheduled carrier — passenger or cargo — needs two separate federal authorizations:[23]

1. Economic authority from the Department of Transportation (DOT), which must find the applicant "fit, willing, and able" and a U.S. citizen.
2. Safety authority from the FAA — an air-carrier certificate and operating specifications. Both large passenger and scheduled cargo airlines operate under Title 14 Code of Federal Regulations Part 121, the demanding rulebook for scheduled carriers.[24]

Shared features:

• Foreign-ownership limits. A U.S.-citizen carrier must have at least 75% of voting interest owned or controlled by U.S. citizens, plus U.S.-citizen management and actual control — which blocks a foreign airline from simply buying a U.S. carrier.[23]
• Slots, gates, and airport access. The FAA can impose takeoff/landing slot controls at congested airports; slots and gates are scarce, valuable, and a barrier to entry.
• Labor law. Airlines fall under the Railway Labor Act, which makes strikes hard to call and contract cycles long.
• Antitrust review by the Department of Justice (DOJ) of mergers and joint ventures (Section 8).

Where the children diverge: passenger carriers face DOT consumer-protection rules — tarmac-delay limits, fee disclosure, and an automatic-refund rule. Freight carriers instead face cargo-security rules from the Transportation Security Administration (TSA) and advance-screening requirements from Customs and Border Protection (CBP) for inbound international cargo, plus international emissions/noise standards that shape freighter fleet economics.[13]

8. Competitive dynamics and consolidation

Both children are oligopolies, but consolidation has run in opposite ownership directions.

Passenger — public consolidation into a Big Four. Two decades of mergers (Delta–Northwest, United–Continental, American–US Airways, Southwest–AirTran) left four carriers controlling roughly three-quarters of domestic capacity — the same ~72.9% top-four receipts share in the child data.[2] Recent moves show the merger door narrowing and stress rising: the DOJ blocked JetBlue's $3.8 billion acquisition of Spirit (2024), and Spirit — squeezed by losses and fuel — ceased all operations on May 2, 2026.[18][19] Regulators did allow Alaska–Hawaiian (2024), Allegiant–Sun Country (2026), and the regional Republic–Mesa tie-up (2025) where networks barely overlapped.[20][21][22] The story now is less mega-merger and more capacity discipline — with Boeing and Airbus delivery delays capping fleet growth, carriers hold back seats to protect fares.

Freight — private consolidation of the fleet. Within two years the two largest listed dedicated cargo operators went private: Atlas Air to Apollo's group (2023) and ATSG to Stonepeak (2025).[16][17] Infrastructure and PE investors treat freighter fleets, operating certificates, and contracts as long-duration, contracted infrastructure — improving capital access but reducing public disclosure. Amazon reshaped the field by building a captive air network flown by contract operators, becoming the single most important customer for the dedicated carriers, and weaker operators (e.g., Western Global) have been squeezed as pandemic demand normalized.[13]

Forward-looking judgment: Consolidation improves network density and purchasing power in both children, but passenger mergers face tightening antitrust scrutiny while freight's shift to private ownership adds leverage and opacity.

9. Risks

• Fuel price shocks — the largest swing factor for both children; a sudden oil spike can erase an industry's profits (and helped fell Spirit).[19]
• Cyclicality and demand shocks — recessions, pandemics, geopolitics, and trade-policy changes hit both seats and cargo hard and fast; a single bad quarter can turn to losses given the fixed-cost base.
• Trade-policy shock (freight-specific). The U.S. ended the $800 "de minimis" duty exemption in 2025, knocking a real hole in trans-Pacific e-commerce air demand — the freight child's biggest near-term demand risk.[15]
• Labor cost and availability — richer pilot and crew contracts have permanently raised the cost floor across both children; freight has also lost pilots to better-paying passenger jobs.
• Aircraft and engine shortages — delivery delays and groundings cut capacity while fixed costs stay in place; tight new-freighter supply is a distinct freight issue.
• Liquidity and leverage — heavy aircraft, lease, and airport obligations leave weak carriers little cushion; bankruptcies and shutdowns recur.
• Regulatory and antitrust risk — tougher consumer rules (passenger) and security rules (freight), plus a stricter merger stance, cap both pricing tricks and consolidation.
• Customer concentration and private-company opacity (freight-specific) — dedicated operators lean on a few customers (Amazon, DHL), and private cap tables disclose far less than public filings.

10. How to invest, and the outlook

The rule of thumb: the passenger child is where you buy a company; the freight child is where you buy an asset or a fund.

Passenger — public routes. The most direct exposure is common stock (or bonds) in listed carriers, broadly grouped as network (Delta DAL, United UAL, American AAL, Alaska ALK), domestic/low-cost (Southwest LUV, JetBlue JBLU, Frontier ULCC, Allegiant ALGT), and regional (SkyWest SKYW, Republic RJET). Dividends are modest and inconsistent; most equity value sits in loyalty franchises, network scale, and cost control. Watch RASM vs. CASM, load factor and yield, fuel and labor cost per ASM, fleet age and delivery schedules, net debt and lease obligations, and — for regionals — customer concentration.

Freight — mostly indirect routes. The mainstream way in is diversified express/logistics (FedEx FDX, UPS UPS, DHL Group on Frankfurt), with the closest listed pure-play the Canadian mid-cap Cargojet (CJT); supply-side and indirect plays include the freighter maker (Boeing BA), aircraft lessors (AER, AL), and, for its captive fleet, Amazon (AMZN). Direct freight ownership is now largely a private-capital exercise — PE and infrastructure funds (Apollo, Stonepeak), direct aircraft ownership and leasing, ACMI capacity contracts, and private credit secured by aircraft and contracted cash flows.[16][17]

Outlook. Passenger results are only modestly profitable — the Bureau of Transportation Statistics reports about a 2.4% net margin for U.S. airlines in 2025, and the International Air Transport Association (IATA) trimmed its 2026 global outlook to a ~3.9% net margin.[7][9] Freight set record global volumes in 2024–2025 even as the de minimis shock and returning belly capacity pressured yields, and tight new-freighter supply into 2027–2028 supports asset values.[10][15] The unifying theme across both children: growth is not the same as investable profit. The likely near-term shape is solid revenue with squeezed margins, favoring operators with disciplined capacity, credible liquidity, and durable network, low-cost, or contract advantages — owned publicly on the passenger side and, increasingly, privately on the freight side.

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Sources

1. U.S. Census Bureau, "2022 NAICS Definitions: 48111 Scheduled Air Transportation; 481111 Scheduled Passenger Air Transportation; 481112 Scheduled Freight Air Transportation." https://www.census.gov/naics/?details=48111&input=48111&year=2022
2. U.S. Census Bureau, 2022 Economic Census, "Concentration of Largest Firms for the U.S.: 2022," NAICS 48111 and its children (receipts, firm counts, CR4/CR8/CR20/CR50, HHI). https://data.census.gov/table/ECNSIZE2022.EC2200SIZECONCEN?codeset=naics~48111
3. U.S. Census Bureau, County Business Patterns, 2023, NAICS 48111 and its children (employment, establishments, annual and first-quarter payroll). https://data.census.gov/table/CBP2023.CB2300CBP
4. U.S. Census Bureau, "County Business Patterns Methodology" (coverage/undercount). https://www.census.gov/programs-surveys/cbp/technical-documentation/methodology.html
5. U.S. Small Business Administration, "Table of Size Standards" (NAICS 481111 and 481112 = 1,500 employees), 2023. https://www.sba.gov/document/support-table-size-standards
6. U.S. DOT, Bureau of Transportation Statistics, "U.S. Air Carrier Traffic Statistics" (enplanements, load factor); Airlines for America, "The Airline Industry Supports Over 10 Million Jobs." https://www.transtats.bts.gov/traffic/
7. U.S. DOT, Bureau of Transportation Statistics, "U.S. Airlines Profited $6.0 Billion in 2025" (operating revenue/expense breakdown, cost shares, net margin), 2026. https://www.bts.gov/newsroom/us-airlines-profited-60-billion-2025-decrease-over-2024
8. Federal Aviation Administration, "FAA Aerospace Forecast Fiscal Years 2026–2046." https://www.faa.gov/data_research/aviation/aerospace_forecasts/
9. International Air Transport Association (IATA), "Airline Profitability Stabilizes with 3.9% Net Margin Expected in 2026," Dec 9, 2025. https://www.iata.org/en/pressroom/2025-releases/2025-12-09-01/
10. International Air Transport Association (IATA), "Global Air Cargo Demand Achieved Record Volume in 2025," and "Air Cargo Market Analysis, December 2025" (CTK, load factors, yields). https://www.iata.org/en/pressroom/2026-releases/2026-01-29-01/
11. IdeaWorksCompany / CarTrawler, "Airline Ancillary Revenue Reaches $148.4 Billion Worldwide for 2024." https://ideaworkscompany.com/
12. Forbes, "Airlines Make Whopping Billions On Bags" (bag fees and co-branded loyalty revenue), 2024. https://www.forbes.com/sites/marisagarcia/2024/02/20/airlines-make-whopping-33-billion-on-bags-see-where-they-fly-free/
13. FedEx Corporation, Form 10-K (fiscal year ended May 31, 2025); Simple Flying, "The Largest Five US All-Cargo Airlines by Fleet Size," 2025. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001048911&type=10-K
14. UPS Q4 2024 earnings / Reuters, "UPS to cut Amazon volume by more than 50%" (2024 revenue ~$91B). https://www.retaildive.com/news/ups-amazon-volume-reduction-q4-2024-earnings/738770/
15. Supply Chain Dive, "'De minimis' end: how shippers are adapting," and Sourcing Journal, "Air Cargo Rates Set to Sink as De Minimis Gets the Axe," 2025. https://www.supplychaindive.com/news/de-minimis-change-2025-peak-season-impact/757600/
16. Apollo Global Management / Atlas Air Worldwide, "Investor Group Led by Apollo… Completes Acquisition of Atlas Air Worldwide," March 2023. https://ir.apollo.com/news-events/press-releases/detail/435/investor-group-led-by-apollo-together-with-j-f-lehman
17. FreightWaves, "Stonepeak to buy air cargo company ATSG for $3.1B," November 2024. https://www.freightwaves.com/news/stonepeak-to-buy-air-cargo-company-atsg-for-3-1b
18. U.S. Department of Justice, "Statements on District Court Decision to Block JetBlue's Acquisition of Spirit Airlines," 2024. https://www.justice.gov/opa/pr/justice-department-statements-district-court-decision-block-jetblues-acquisition-spirit
19. Spirit Aviation Holdings, "Spirit Airlines Begins Orderly Wind-Down of Operations" (SEC filing, May 2, 2026). https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001498710&type=8-K
20. Alaska Air Group, "2025 Annual Report" (Hawaiian acquisition completed Sept 18, 2024). https://news.alaskaair.com/
21. Allegiant Travel Company, "Allegiant Completes Acquisition of Sun Country Airlines" (May 13, 2026). https://ir.allegiantair.com/
22. Republic Airways Holdings, "Republic Airways and Mesa Air Group Complete Merger" (Nov 2025; RJET). https://investor.rjet.com/
23. U.S. Department of Transportation, "U.S. Air Carriers — Licensing" (economic authority; citizenship and foreign-ownership requirements). https://www.transportation.gov/policy/aviation-policy/licensing/US-carriers
24. Federal Aviation Administration, "Regularly Scheduled Air Carriers (Part 121)." https://www.faa.gov/hazmat/air_carriers/operations/part_121
25. companiesmarketcap.com, airline market-capitalization data (approximate, mid-2026). https://companiesmarketcap.com/