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Mayana Fitri
Anisa Budiarthati
 Competition
 The industry has more capacity
than it needs
Why Air Industry
faces Financial  Earnings are very sensitive to the
Problems? ratio of filled seats to total seats
 Difficult to adjust capacity
 Private carriers  used by firm to
support the primary business.

Types of  For-Hire carriers  airlines
Carriers provide many type of services,
and not primary support the
 Number of Carriers
 Niaga kargo di Indonesia: 6
Market maskapai
Structure  Niaga standard: 59 maskapai
 Intermodal: airline has limited
 Intramodal: competition are about
rate and service given by each
Competition  Service competition: measured by
frequency and timing of flight on
a route
 Cargo competition: they compete
at rates given to clients/consumers
 General
 passenger transportation gives more revenue than
freight transportation. Freight transportation are
made for high value goods or emergency shipments.

 Speed of service
 Terminal to terminal time by airlines is faster than
other carriers.
Operating and  Beside speed, consumer is also interested to airline’s
Service reliability.

Characteristics  Length of haul and capacity
 Length of haul and capacity depends on what type
the airline is, whether it’s cargo or passenger airlines.

 Accessibility and dependability
 Dependability of airlines is overrated, but
accessibility of it is poor.
 Types of vehicles
 There are several types of airlines,
based on its function. This will lead to
different cost it may occurs.

 Terminals
 There is airport and hub airport.
Cost Structure
 Fixed versus variable cost components
 High variable and low fix cost for airlines.
Fixed cost just to pay facilitation fee of
terminal (airport) to government. Variable
costs are in the picture.
 Fuel
 Labor
 Equipment
 Economies of scale  how to operate in large-
scale. Example: not leaving any empty seats in
every flight.
Small Aircraft
Less risk of empty seats

Management in
Air Transportation

Less risk of spill-cost
 Airport Access
 LOS Implications
 Proximity of Airport to Center City
 Rail Access to Airports
 Airport Terminal Design
Land-Side Issues
 Airports as Commercial Centers