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Fundamental of Airline Economics Definition

Market Structure Definition

Characteristic Oligopoly Example

Definition

FUNDAMENTALS OF AIRLINE ECONOMICS 



(AAB 21102)

Chapter 2 : Fundamentals of Airlines Economics

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Characteristic of Airline Industry Characteristic of Airline Industry

1-Very Close Government Involvement/Regulations/Relation (VCGR) 3-Very High Investment (VHI)

4-Growth Through Merger (GTM)


2-Government Financial Assistant (GFA)

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Characteristic of Airline Industry Characteristic of Airline Industry
5-Economic of Scale (EOS) 7-High Technological Turn Over (HTTO)

6-High Labour & Fuel Expenses (HL&FE) 8-Mutual Dependent (MD)

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Characteristic of Airline Industry Characteristic of Airline Industry

9-Sensitivity to Economic Fluctuations 11-Price Rigidity & Non Price Competition

12-Competitive Advantage of Schedule Frequency

10-Number of Carrier & Market Share

13-Excess Capacity & Low Marginal Cost

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The Freedom of Air Definition The Freedom of Air
1st Freedom-The right to fly over a foreign country without landing 6th Freedom-The right to fly from a foreign country to another while
stopping in pax own country for non-technical reasons

2nd Freedom-The right to refuel or carry out maintenance in a foreign


country without embarking or disembarking passengers or cargo.
7th Freedom-The right to fly between two foreign countries while not
offering flights to pax own country
3rd Freedom-The right to fly from pax own country to another

8th Freedom-The right to fly inside a foreign country, continuing to pax


own country
4th Freedom-The right to fly from another country to pax own

9th Freedom-The right to fly inside a foreign country without continuing to


5th Freedom-The right to fly between two foreign countries on a flight pax own country
originating or ending in pax own country

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