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Any aviation activity or asset other than military aviation and military assets.
People
Cargo
Market volatility
Threat of terrorism
Labor issues
AccidentsGovernment intrusión
Regional airlines are a type of airline service that is intended to feed a larger airline or larger
aircraft.
It also describes air service between small communities that are not able to support larger aircraft.
These services usually operate under Essential Air Service (EAS) program. Some examples are:
Horizonair, Mesa, Republic, Skywest, Air Wisconsin.
Network Airlines: Also known as full-service carriers (FSC), legacy or flag carrier. Their
characteristics are hub-spoke model, relatively large network of operations, bundled
services, rich amenities, narrow and wide-body operations conventionally.
Low-cost carriers (LCC): Also known as budget, no-frills or ultra low cost. Their
characteristics are point to point services, relatively limited network of operations, de-
bundled services, less amenities, and predominantly narrow-body operations.
Hybrid carriers: Rare cases in the world. Characteristics are operated as LCC domestically
and FSC internationally. Good examples are Aer Lingus from Ireland or Air Berlin (bankrupt
couple of years ago).
General aviation: refers to all civil aviation except that carried outby the commercial airlines.
1. Business aviation
2. Corporate aviati
3. Personal flying
4. Instructional flying
5. Commercial and industrial aviation
GA is the largest segment of aviation based on number of aircraft,pilots, and number of
airports and communities served.
More than 5,200 airports are being used exclusively by the GAaircraft
It is a $40 Billion industry that generates over $100 Billion annually ineconomic activity.
There are four major engine manufacturers supporting Boeing and Airbus: GE, P&W, R&R,
and SNECMA
An aircraft manufacturer only manufactures and sells the airframe. This is called “green
aircraft”.
The airline itself decides for the engines, avionics, and cabin arrangements.
The aircraft in this market are divided into two categories: narrow body (single aisle) and
wide-body (twin aisle).
There are more manufacturers in regional aircraft market than big aircraft market.
Almost all the manufacturers are foreign based companies: EMBRAER, DASA,
BOMBARDIER, SAAB,BAE, ATR, FOKKER.
The American manufacturer in this market only play a minor role and limited to 18-20 seat
production (BE-1900D)
The airline industry took off after WW II with the emergence of huge excess supply of four
engine long range military transport airplanes in commercial use such as DC-4, DC-6, L-
1049 etc.
The industry became the main mode of transportation over 500 miles distances with the
introduction of first jet airliner B-707 in 1958.
Finally it became the main intercontinental mode of transportation with the introduction
of first wide body commercial jet B-747 in 1969.
Along came the first signals of new management concerns such as demand-capacity,
profitability, revenue management, marketing challenges, in-flight entertainment, new
ground equipment, etc.
Asia-Pacific 1.71bn
Europe 1.17bn
9 / 11’s EFFECTS
Since airlines were in recovery process for a long time aggressive cost cutting and
reduction and consolidation of flights causes them to spread the overhead costs over a
smaller fleet. The buzzwords of the industry nowadays are: capacity discipline and
efficiency.
New security equipment and personnel requirements brings extra financial load to
New security screenings in terminals requires more time, longer lines, and carry-on
restrictions.
LCC PHENOMENON
Low cost carriers became a major threat to network carriers with their low fares
and point to point operations.
Crisis and struggles of network airlines also contributed to low cost airlines growth
and getting more market share.
Due to their size and agility LCC s react faster during crisis.
Southwest’s success for the last four decades has led to the establishment of new
successful LCC s like Jet Blue and to the transformation of former charter carriers
or small jet providers to low cost like ATA and Independence Air.
The first two carriers that recovered the service decline five months after 9/11
were Southwest and ATA.
Airports that are served by LCC’s managed the effects of 9/11 better.
Increase in cost control and cost management. Stronger emphasis on efficiency, capacity
and cost discipline.
Since security procedures changed the passenger flow, passengers are spending more
time at the airports now. Thus, there is a greater demand for richer eating and shopping
experiences.
Maximizing value to passengers with a rich variety of products and service styles can bring
substantial economic returns.