Air Carriers

Lecture objectives:

Understand how air carriers operate

How air carriers compete
Look into the future of the industry

Lecture Summary

Operations

All-cargo airlines are operating similar to TL - you rent the entire plane.
Commercial airlines are able to carry smaller quantities as belly cargo - similar
to LTL.
Parcel carriers are also using planes for small shipments - but they are often very
expensive.

Rates

The rates in air transportation are often a mystery to many. While the rate is
quoted by weight,
the actual rate charged corresponds to that weight if the package has a certain
density.
This is also known as the volumetric density.

So what happens when it is not the 'right' density?

If it is less dense, then you get charged for the volume translated to the
corresponding weight
If it is heavier then you pay for the actual weight

Competition

Fuel costs: who can best manage the largest expense and hedge against future price
increases
Who can manage the delays put on by security concerns. Technology is starting to
help alleviate these issues.