HY302 Chapter 1 Introduction to Aviation Industry

HY302 Aviation Logistics and Supply Chain Management Chapter 1: Introduction to Aviation Industry

In the Present Day How many transportation do we have? Rail Water Truck Pipeline Air

Comparison of Transportation Mode Average Average Low Low High Average Very Slow Average Very Low Limited Very High Very Low Fast High Slow High High Very Average High Very Fast High High Extensive Very Low Low Very Limited Average Average Low Very High

What is the airline industry?  The airline industry is a system of transportation.  It is part of a much larger transportation industry, focusing on moving people and goods from one place to another.

What is the airline industry?  The most widely used modes of  The most popular modes of passenger transportation are freight transport are sea automobiles followed by road, rail, and air. followed by buses, airplanes and trains.

What is the airline industry? • All modes of transportation have certain common features. They require transport networks, terminals, vehicles and operations to control the transportation systems. • In the airline industry • The “transport networks” are referred to as airways and • The “terminals” as airport. • The “vehicles” are different types of airplanes. • “Operations” include air traffic control which is a service offered by the appropriate authority to promote the safe, orderly flow of air traffic.

What is the airline industry?  An airline’s basic function is to transport people and goods from one location to another using the airways.  The airline industry consists of many different organizations that provide this service.  Air transport provides the only global transportation network for both passenger and cargo, making it essential for global business operations as well as for personal and tourism.

What is the airline industry? • Air transport also provides substantial economic and social benefits by connecting people and facilitating communication between different parts of the world. • The aviation industry refers to the range of activities provided by aircraft manufacturers, airport operations, aviation support industries and other service providers.

Scope of the Airline Industry  Aircraft manufacturers produce commercial transport planes. Most are jet planes with two, three, or four engines carrying from 20 to hundreds of passengers.  Manufacturers also produce general aviation planes which are small airplanes.

Scope of the Airline Industry  Although some of these smaller planes have jet engines, most are propeller-driven.  These light plane are used for a variety of general aviation activities, such as flight instruction, inspection of telephone lines, spraying field crops or air taxi service.

Scope of the Airline Industry  Airport operations refer to the ground facilities required for air travel including runways and navigation aids.  While many people may be familiar with larger airport facilities, most airports are small airfields that are able to serve only light planes, helicopters or other specialized aircraft such as seaplanes.

Scope of the Airline Industry  Aviation support industries provide a wide range of services and supplies to airlines and airports. • A variety of food suppliers prepare meals to be served on flights. • Other companies service airports with ground transportation. • Freight forwarders organize arrangements for shipping air cargo.

Scope of the Airline Industry  Travel agents are important contributor to the airline industry.  Their responsibilities include being authorized to sell and issue airline tickets by scheduling an appropriate itinerary, obtaining affordable prices, reservations and issuing tickets.

Types of Airline Service  Two main types of airline services: scheduled flight and non-scheduled flight.  Scheduled flights take place using predetermined routes according to a planned timetable. These timetables refer to regular, published schedules. Customers are bound to the airline’s schedule.  Non-scheduled flights do not operate under a planned published timetable. They are typically flights that are chartered for commercial use by tour operators or other hiring arrangements with customers.

Types of Airline Service  Aviation encompasses two categories: civil and military. Civil aviation represents all non-military aviation, both private and commercial. Civil aviation includes two major categories:  Commercial air transport (all passenger/cargo scheduled or charter flight)  General Aviation (GA)

Scheduled Flight Service  The airlines that provide scheduled flight service can be categorized as major airlines, low-cost carrier or regional airlines.  Major airlines (Legacy airlines) are large airlines that connect the major cities of the world.  Low-cost carrier (LCC), also known as “ no-frills” airlines, offer lower fares in exchange for eliminating many traditional passenger services.  Regional airlines represent a type of airline service that is intended to connect with, or “feed”, the major airlines, also known as feeder airlines.

Non-scheduled Flight Service  Non-scheduled flights do not operate under a planned published timetable.  They are typically planes that are chartered for commercial use by tour operators or other hiring arrangements with customers.

Passenger Travel  Two types of travel markets: The business market consists of travelers whose main goal is  to meet with customers and/or colleagues  or attend conferences in different parts of the world. • Fast-growing emerging markets and world trade in the Asian market are the main driving factors contributing to business travel. • This travel market is the most profitable segment of passenger travel.

Passenger Travel  Two types of travel markets: The leisure market consists of passengers travelling for a more extended period of time for the purpose of recreation or other personal reasons.

Alliance  An alliance represents a formal agreement between companies to achieve a particular aim. This can allow company to increase their efficiencies while remaining separate entitles.  Alliances allow for increased customer service with minimal increased cost to individual airlines.  Currently, the major airline alliances are the Star Alliance, Sky team and Oneworld.

Alliance Airlines benefit airlines in several ways:  Provide more capacity and new markets without having to make large capital expenditures for airplane purchases or airport infrastructure.  Open new routes because of the increased number of combined customers between two points.  Extend to reach and scope of their FFP to increase customer loyalty.  Generate additional passengers per flight.  Increase revenue.  Reduce the cost of equipment and services.  Reduce airport handling, airport operations, selling and ticketing costs.  Reduce travel agent commission costs.  Pool costs and revenue to share risks and rewards.