Air TransportationA Management Perspective

Contents

Aviation :An Overview

Historical Perspective

Air Transportation : Regulators and Associations

The General Aviation Industry

The Airline Industry

Economic Characteristics of the Airlines

Airline Management and Organization

Forecasting Methods

Airline Passenger Marketing

Airline Pricing, Demand, and out Determination

Air Cargo

Principles of Airline Scheduling

Fleet Planning : The Aircraft Selection Process

Airline Labor Relations

Airline Financing

International Aviation

Aviation :An Overview

Characteristics of the industry

Economic profile of industry

Contribution to the Economy

Contribution to the Business

Impact on Travel Industry

Historical Perspective

Historical sketch of USA airline and general aviation

Airline Deregulation Act. 1978Post deregulation Evaluation

• 911 effectsA new Era in Aviation

• Boeing • Low Cost Carriers • Business General Aviation

Air Transportation : Regulators and Associations

Regulators

DOT :Department of Transportation

FAAFederal Aviation Administration

JAA

NTSB:National Transportation Safety Board

TSA: Transportation Safety Administration

ICAO : International Civil

Aviation Organization

IATAInternational

Air Transportation Aviation

The General Aviation Industry

Factor Affecting

G.A.

Uses of Aircraft

Airport Market

The Airline Industry

• Structure of the Airline Industry • Regional Carries• Major and National Carries• Role of Airline industry • Airline Certification

Economic Characteristics of the Airlines

Oligopolistic (Monopoly) Market Share Barrier to Entry Economic Characteristics

– High Technological Turnover– High Labor and Fuel Expenses – The Competitive Advantage of Schedule Frequency – Sensitivity to Economic Fluctuations – Close Government Regulation

Airline Management and Organization

Management

Planning

Organizing

Staffing

Directing

Controlling

Forecasting Methods

Objectives • Analysis • Planning • Control

Forecasting Methods• Time Series and

Trend Analysis• Smoothing the

Variation • Judgment Methods

Airline Passenger Marketing

• Marketing Mix in Airline • Market Segmentation • Computerized reservation systems (CRSs)• Business Class Service• Code Sharing • Hub and Spoke Service• Advertising and Sales

Promotions

Airline Pricing, Demand, and out Determination

• Trend in Domestic Passenger Airfares • No-Frill Airfare • Types of Passenger Fares • Airline Cost

– Direct Operating Cost – Indirect Operating Cost – Fixed and Variables Cost

• Load Factor

Air Cargo

• Historical Overview– Air Express – Overnight Air Express– Type of Carrier

• Air Freight Rates • Special Air Freight Services

– ULDs – Pickup and Delivery Services

• Factors Affecting Air Freight Rates – Cost of Services – Volume of Traffic – Value of Services – Competition

Principles of Airline Scheduling

Internal Factors• Equipment maintenance

requirements• Flight Operations

– Runway length– Fuel Capacity – Air Traffic Control – Crew

• Facility constraints– gate position– Ticket counter– Baggage handling– Ground equipment

• Marketing Factors

External Factors• Airport Authorities • Local Communities • Hotel Operators• Travel Agents• Air Freight Shipper

Fleet Planning : The Aircraft Selection Process

• Factors in Fleet Planning – The Pre deregulation – Hub and spoke system– Technical Aspects – Fleet Commonality – Long Range Aircraft

• Planning Process– Information Needed – Systems Constraints – Aircraft Evaluation– Financial Evaluation

Airline Labor Relations

• 35 % Operating Cost • Airline Union • Bargaining Process • Trends of Human Resource Management

Airline Financing

Sources of Funds

• Internal Sources• Commercial Bank • Finance and Life

Insurance Companies • Investment Bank• Leasing • Vendor Financing • Venture Capital

Cash Management

Financial Planning

• Cash Flow • Cash Budgeting

International Aviation

• International Air Law– The Warsaw Convention 1929 – The Chicago Convention 1944

• Freedoms of The Air– First Freedom (to overfly a foreign country without landing there)– Second Freedom – Third Freedom– Fourth Freedom– Fifth Freedom – Sixth Freedom – Seventh Freedom – Eighth Freedom

• Airline Alliances : One World , Star Alliances , Sky Team