How is altitude determined?

I really liked this question, as it is something relatively easy to explain, but at the same time quite interesting!

In this animation, you can see both airplanes flying at the same altitude, but at a different distance from the ground. How do we determine our altitude?

As you may know, in Aviation, altitude is expressed in feet. 1 foot is about a third of a meter, because 1 meter is 3.28 feet. Typical cruise altitudes of a jet aircraft vary between 30.000 to 40.000 ft. 

In order to know, and let other traffic know at what altitude we are flying, we need to use the same conditions, whether we are flying over mountains or over a flat area. Therefore, we use the following phraseology: Height is the vertical distance from the ground and Altitude is the vertical distance from mean sea level. So in the animation, the airplanes were flying at the same altitude (compared to sea level), but at a different height above the ground. 

Every airport provides us meteorological information, such as the wind, visibility, clouds and the barometric pressure at mean sea level, the QNH.

In the cockpit, the altitude is shown by the altimeter. The altimeter is based on pressure. When we select the current QNH in the little window, we get an accurate reading of the current altitude. 

If you are on the ground in any airport and you set the correct QNH in your altimeter, it will read the airport elevation, which is the height above mean sea level.

Pressure changes from location to location, so the QNH at your departure airport is usually not the same as the QNH in your arrival airport. In order to maintain vertical separation between airplanes high in the air, we all need to have the same reference, thus use the same altimeter setting. Therefore, at a certain altitude (the transition altitude), we will change our altimeter setting from the local QNH to the standard pressure at mean sea level, which is 1013 hPa. After this transition, our altitude will be referenced to as Flight Level. 

So Flight Levels are based on a standard altimeter setting of 1013 hPa, and are indicated as follows. Rather than saying we fly at 38,000 feet, we will from that moment call it FL 380.

Before arriving to our destination, during our descent, we will pass the transition level, after which we will set the altimeter to the local QNH of that airport and fly altitudes again, rather than flight levels.