RIBBONS IN THE SKY:

AIR TRANSPORTATION
AIR TRANSPORTATION

• Aircraft
• Passenger aircraft
• Airline
• Commercial air flight
• Domestic flight
• International flight
An Airport
System

Ashford et al, 1991

Luggage Loading and
Unloading in the
Airport System

Ashley and Moore, 1992

CRITERIA OF AIR TRAFFIC CLASSIFICATION

• Purpose of use
• Transport object
• Route length
• Geography
• Regularity
• Business model
CHARACTERISTICS OF AIR TRANSPORTATION

• Speed
• Considerable length of runway for take-off and touch down
• Suited for long haul services and competitive for short haul services
• Operate national and international routes
• Navigational aids
• Elaborate and expensive terminal (airport)
• Under international agreements (government or private)
FREQUENT FLYER PROGRAMME
PROBLEMS OF FREQUENT FLYER PROGRAMME

Critically evaluate the use, by airlines, of frequent flyers

programmes:

- Malaysia Airlines
- AirAsia
- American Airlines
- Cathay Pacific
PROBLEMS OF FREQUENT FLYER PROGRAMME

1. Loss of differential advantage

2. Anti-competitive behaviour
3. Higher fares
4. Increased switching costs
5. Entry barriers
6. Unnecessary travel
7. Under-the-counter dealings
8. Negative effects on profits
9. Low redemption and future uptake
10. Low cost carriers
KEY CHARACTERISTICS OF LOW-COST
CARRIERS
THE ORGANIZATION OF AIR TRANSPORT

• Equipment manufacturers
• Airports
• Navigation and air traffic control
• Airlines
Equipment Manufacturers
Configuration

Configuration: the way

seating is arranged within
the aircraft
Narrow-body: Wide-body:
• Boeing Super 80 • Boeing 747
• Boeing 717 • Boeing 767
• Boeing 727 • Boeing 777
• Boeing 737 • Boeing 787
• Boeing 757 • Airbus A300/A310/A330/
• McDonnell-Douglas DC-9 A340/A350/A380
• McDonnell-Douglas MD-80/90 • McDonnell-Douglas DC-10
• Airbus A318/A319/A320/A321
Pitch, Width and Recline

• Pitch: the distance between a point on one seat and the same
point on the seat in the row in from or behind it.
• Width: 17 to 18 inches
Classes of Services

• Coach class (economy class)

• Standard level of service
• Narrower seats, less pitch and recline
• Simple meals or snacks
• Business class
• Almost good as that found in the first class
• Pitch: 40 inches
• Recline: 40-60 percent
• First class
• Pitch: more than 50 inches
• Recline: 60 percent or more
• Free pyjamas (subject to airline)
Airports
Navigation and Air Traffic Control
Airlines

Services provided can be divided into three: What is the

differences between
• Scheduled service schedule and
• Charter service charter service
airline?
• Air taxi service
Flight Types and Routes

• Non stop flight

• Direct flight
• Connection flight
 Flight Types

NON STOP
LAX JFK

DIRECT FLIGHT LAX DFW JFK

No change of planes

CONNECTING FLIGHT LAX JFK

DFW
Change of planes
 Flight Itineraries

ONE WAY
ORD MIA

ROUND TRIP
ORD MIA
 Flight Itineraries

OPEN JAW
OAK DCA

Ground Transportation

LAX
 Flight Itineraries

CIRCLE
OAK DCA

LAX
HUB AND SPOKE SYSTEM

• Hub provide transcontinental and intercontinental services

• Spokes are designed to offer connection from regional airports to
meet long haul services
HUB AND SPOKE SYSTEM

• Advantages of hub and spoke system:

• Cheaper to operate aircraft by low cost carrier
• Improve efficiency, more spokes will create more city pairs
• Larger aircraft used between hubs – higher load factor and better utilized of aircraft
• Disadvantages of hub and spoke system:
• Diseconomies in term of spaced banks of arrival and departures resulting in peaks at the
hub airports
• Require larger number of staff during peak time
• May lead to delays with congested air and terminal space
• Time consuming for passengers
BILATERAL AGREEMENT

WHAT IS BILATERAL?

Is where two countries agree to provide air service on a reciprocal

basis and it helps to facilitate and protect the rights of each
country’s airline irrespective of whether it is a profit or non-profit
venture
 THE FREEDOMS OF THE AIR

• Freedom 1: the right of an airline to fly over country to get another

• Freedom 2: the right of an airline to stop in another country for fuel/maintenance but not to pick up or drop
passenger
• Freedom 3: the right of an airline to drop off in a foreign country, traffic from the country in which it is
registered, to a separate country
• Freedom 4: The right of an airline to carry back passengers from a foreign country to the country in which it is
registered
• Freedom 5: the right of an airline to carry back passengers between two foreign country as long as the flight
originates or terminates in the country in which it is registered
• Freedom 6: the right of an airline to carry passengers to a gateway in the country in which it is registered the on
to a foreign country, where neither the origin not the ultimate destination is the country in which it is registered
• Freedom 7: the right of an airline to operate entirely outside of the country in which it is registered in carrying
passengers between two other countries
• Freedom 8: the right of an airline registered in a foreign country to carry passengers between two points in the
same foreign country
• Freedom 9: the right of an airline registered in a foreign country to carry passengers between two points within
a foreign country without continuing service to or from one’s own country (also known as pure or stand alone
cabotage)
 Freedom 1

NWA

Freedom 1: the right of an airline to fly over country to get another

O’HARE
KEFLAVÍK
INTERNATIONAL
INTERNATIONAL OSLO AIRPORT,
AIRPORT, ILLINOIS,
AIRPORT, ICELAND NORWAY (OSL)
UNITED STATES
(KEF)
(ORD)
 Freedom 2

NWA NWA

UNITED STATES ICELAND NORWAY

Freedom 2: the right of an airline to stop in another country for fuel/maintenance but not to
pick up or drop passenger
Freedom 3

NWA

UNITED STATES Freedom 3: the right of an airline to drop off NORWAY

in a foreign country, traffic from the country
in which it is registered, to a separate country
Freedom 4

NWA

UNITED STATES Freedom 4: The right of an airline to carry NORWAY

back passengers from a foreign country to the
country in which it is registered
Freedom 5

NWA NWA

UNITED STATES FRANCE GREECE

Freedom 5: the right of an airline to carry back passengers between two foreign country as
long as the flight originates or terminates in the country in which it is registered
 Freedom 6

NWA

NWA

UNITED STATES ICELAND NORWAY

Freedom 6: the right of an airline to carry passengers to a gateway in the country in which it
is registered the on to a foreign country, where neither the origin not the ultimate
destination is the country in which it is registered
 Freedom 7

NWA
Freedom 7: the right of an airline to
operate entirely outside of the country
in which it is registered in carrying
passengers between two other
countries

UNITED STATES ICELAND NORWAY

 Freedom 8
NWA
Freedom 8: the right of an airline
registered in a foreign country to
carry passengers between two
points in the same foreign country

NWA

OSLO AIRPORT, CHRISTIANSAND

UNITED STATES
NORWAY AIRPORT, NORWAY
 Freedom 9

Freedom 9: the right of an airline registered in

a foreign country to carry passengers between NWA
two points within a foreign country without
continuing service to or from one’s own
country (also known as pure or stand alone
cabotage)

OSLO AIRPORT, CHRISTIANSAND

UNITED STATES
NORWAY AIRPORT, NORWAY
ASSOCIATIONS IN AVIATION BUSINESSES

• International Air Transport Association (IATA)

• International Civil Aviation Organization (ICAO)
• European Civil Aviation Conference (ECAC)
• Association of European Airlines (AEA)
• Airline for America (A4A)
International Air Transport (IATA)

The role of IATA

• To set the fare of the airlines
• Enforce routes and regulations of aviation
• Preparing all the flight documentation
International Civil Aviation Organization
(ICAO)

• Adopts standards and recommended practices

concerning air navigation, its infrastructure, flight
inspection, prevention of unlawful interference,
and facilitation of border-crossing procedures for
international civil aviation
• Defines the protocols for air accident
investigation followed by transport safety
authorities in countries signatory to the
Convention on International Civil Aviation,
commonly known as the Chicago Convention
European Civil Aviation Conference (ECAC)

• Pursue the promotion of the continued

development of a safe, efficient and
sustainable European air transport system
Association of European Airlines (AEA)

• Represent the European airline industry

• Ensures the sustainable growth of the European airline industry in
a global context and contributes to the policy decision-making
processes
Airline for America (A4A)

• Involved in technical, legal and political arenas

• Supports the industry efforts to fashion crucial policy and
measures that enhance aviation safety, security and vitality of the
system
Federal Aviation Administration (FAA)

In charge of air traffic control

operations, licences pilots,
inspects aircraft, and overseas
maintenance
AIR TRANSPORT REGULATIONS

System of regulations for air transport are divided in to 3 ways:

• Internationally; scheduled routes are assigned on the basis of
agreements between government of the countries concerned
• Internationally; scheduled airfares are now less and less control. But
government can still intervene when predatory pricing involved and some
countries apply fluctuations of price within acceptable maximum and
minimum level
• National government; approve and license the carriers which are to
operate on scheduled routes whether domestic or international
AIR TRANSPORT REGULATIONS

The reasons for air transport regulations are:

• For safety purposes
• Public concern
• Economic impact
Security Screening For
Liquids, Gels Or Aerosol
• Which passengers are affected by
these regulations?
• Are liquids still permitted in hand
luggage on flights?
• How can passengers prepare for
security checks at the airport?
• What items count as “liquids”?
• Why do liquids have to be carried in
a plastic bag from May 21, 2007?
AIRPORT ACTIVITIES

• Ground handling
• Baggage handling
• Passenger terminal operations
• Airport security
• Cargo operations
• Airport technical services
• Air traffic control
• Aircraft scheduling
• Airport and aircraft emergency services
• Airport access
AIRPORT REVENUE

• Aeronautical revenue (Operating revenue)

• Non-aeronautical revenue (Non-operating revenue)
MEASURES TO ENSURE A COMFORTABLE
FLIGHT

• Air pressure
• Shoes
• Clothing
• Wear layers of loose, roomy clothes
• Skin dehydration
• Liquid & alcohol
• Food
• Exercise
(Barlay, 1995)
FLYING WHILE PREGNANT
FLYING WITH INFANTS
AIRLINE ALLIANCES

9 principal features how strategic alliances developed by airlines

• Equity stake or equity exchange
• Code sharing
An airline alliance is an
• Joint services aviation industry arrangement
• Block seat or block booking between two or more airlines
• Joint marketing/marketing agreement agreeing to cooperate on a
substantial level.
• Joint fares
• Franchise agreements
• Wet leasing
• Frequent flyer benefit, cooperation and reciprocity
Code Sharing
THE MOST COMMONLY REPORTED SOURCES OF
DISSATISFACTION IN 2003
• Flight problems, such as cancellations and delays
• Baggage problem
• Reservation, ticketing and boarding
• Problems associated with refunds
• Customer service issues such as unhelpful employees, inadequate meals
and poor cabin service
• Incorrect or incomplete information about fares
• Disability issues
• Overselling
• Frequent Flyer Problems
• Advertising
• Animals
AIRLINE ALLIANCES

Why airlines must enter strategic alliances

• Economic benefits
• Competitive advantages
• Cost reductions
• Joint purchasing allows additional cost savings
• Economies of scale and scope in marketing activities
• More connected route network
• Expending market access
SPECIALTY AIR TRANSPORTATION

Airship
SPECIALTY AIR TRANSPORTATION

Airship

Solar Balloon
SPECIALTY AIR TRANSPORTATION

Airship

Hot-air Balloon
SPECIALTY AIR TRANSPORTATION

Moored Balloon
SPECIALTY AIR TRANSPORTATION

Helicopter
SPECIALTY AIR TRANSPORTATION
SPECIALTY AIR TRANSPORTATION
SPECIALTY AIR
TRANSPORTATION

Space Transportation
SPECIALTY AIR TRANSPORTATION

Sailplane
SPECIALTY AIR TRANSPORTATION

Gliding
SPECIALTY AIR TRANSPORTATION

Paragliding
Paragliding at Jugra
TECHNOLOGICAL DEVELOPMENT
TECHNOLOGICAL DEVELOPMENT

CRS Functions:
• Provide information on schedules, tariffs, space availability
• Enable reservations to be made
• Facilitate ticket and boarding pass insurance

(Holloway, 1997)
TECHNOLOGICAL DEVELOPMENT

GDS INTERNET SoLoMo HYBRID

DIGITAL ERAS IN TRAVEL AND TOURISM
INDUSTRY
THE ROLE AND VALUE OF GDS IN TRAVEL
DISTRIBUTION
AIRLINES GLOBAL DISTRIBUTION SYSTEMS
AIRLINES GLOBAL DISTRIBUTION SYSTEMS
INTERNET

DISINTERMEDIATION ENTERS THE PICTURE

“With the larger chains leading the way, most companies

(90%) have a web site on the internet and, unlike DGSs,
the websites provide products information and detailed
pictures of hotel properties” – Cline and Warner, 1999
INTERNET

• Cost effectiveness
• Upload pictures
INTERNET
SoLoMo

• Customer Engagement Technology (CET)

• To simplify the booking process
Social Media

• ↑ 3m photos – Flickr
• 5m tweets
• Million new blog entries
• TripAdvisor:
 World largest travel community
 6 languages
 2005 – 6m
 2007 – 15m
 2008 - 20m traveler reviews and opinions
Social Media

Supplier:
• Must be presented on these social channels
• Should maintain a strong online reputation by actively responding
to the online reviews
• Must keep the customers engaged by posting fresh content on
these social sites
Mobile

• UN → 2020 = ratio of 6 devices to every person online

• Mobile marketing – SMS Marketing, QR code
Mobile
HYBRID – GOING BACK TO THE START
 USING ICTS TO DEVELOP COMPETITIVE
ADVANTAGE

Strategies
Speedy reaction Proaction and reaction are important
Business at the speed of thought
Marketing research Use ICTs to interact with consumers
Continuous marketing research
Scenario building and testing
External environment Interact with external environment and appreciate influence
Set indicators and sensors
React first
Innovate Identify and develop new niche markets and products
Create new products and add value to existing products
Re-engineer business processes
Use ICTs for communicating with consumers and partners
 USING ICTS TO DEVELOP COMPETITIVE
ADVANTAGE

Strategies
Promote growth Geographical expansion
Operational expansion to gain from economies of scale
Develop networks and partnerships to gain economies of scope
Promote horizontal, vertical and diagonal integration
Alliances Develop virtual organisations and concentrate on core business
Integrate value chain
Develop flexible network of partners based on ICTs
Efficiency Redesign processes to maximise output with minimum resources
Reduce time required for development and delivery of product
Quality Standardisation and quality-control systems
Offer before, during, after service
 USING ICTS TO DEVELOP COMPETITIVE
ADVANTAGE

Strategies
ICT platform Integrate all internal and external processes
Develop info-structure and info-space
Loyalty Provide incentives to create loyalty
Add value through personalised interactions with consumers
Develop relationship and 1-2-1 marketing
Outsourcing Outsource non-core business to partners
Fight competition Use ICTs to avoid substitution and barriers to entry
Establish entry barriers
Effect switching costs and mechanisms
Build closer relationships with suppliers and customers
Limit access to distribution channels