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Aviation Industry


Aviation Industry Aviation Industry Learning Objectives : History of the aviation industry Understand the commercial planes configurations Define airline industry ... – PowerPoint PPT presentation

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Title: Aviation Industry

Aviation Industry
Aviation Industry
  • Learning Objectives
  • History of the aviation industry
  • Understand the commercial planes configurations
  • Define airline industry terminology

Aviation history
  • By 1917, seventeen regularly operating airlines
    in Europe, Africa, Australia, and South America
  • Some airlines from that era that are still
    operating include Royal Dutch Airlines (KLM),
    SABENA World Airlines, Lufthansa, and Qantas.
    Americans viewed air travel as a dangerous sport,
    not a safe means of transportation.

Aviation History
  • By the 1920's governments started to form
    national airlines through combining a few private
    airlines. One such case is the British government
    who formed Imperial Airways.

Aviation Industry
  • described as building and flying aircraft.
  • Two sectors -
  • Military - aircraft flown by a nations air
    force and other branches of its military

Aviation Industry
  • Civil - divided into domestic service and
    international service
  • Domestic - flight must start and end within
    the borders of the same country e.g. Malaysia,
    USA, India, Australia
  • ii) International - flight starts in one
    country and ends in another e.g. SIN-LAX

Airline growth
  • Surplus of military planes left after World War
    I, were converted to civilian use
  • In 1919, bombers were being converted in Europe
    to form over twenty small new airlines
  • First regular international airline service was
    started by one of those. The company setup by
    Henry and Maurice Farman used old Farman bombers
    to make weekly flights between Paris and

Airline Innovations
  • Needed both larger, faster and safer airplanes
  • Many improvements were made, e.g. cockpit
    instruments, altimeters, airspeed indicators were
    installed in aircrafts in the 1930s that many
    believe it was the most innovative period in
    aviation history

Airlines Regulatory Bodies
  • 1) Federal Aviation Administration (FAA)
  • controls operations, licenses pilots,
    inspects aircraft, and overseas maintenance
  • 2) International Air Transport Association
  • association made up of most of the worlds
    airlines, sets standards for civil aviation

Air Service and Routes
  • 1) Scheduled service - business or for vacation
    travel operating regularly as per fixed
    schedule, advertised times regardless of number
    of passengers
  • 2) Chartered service - tour operator/s
    chartered the whole plane or flight for a
    round trip e.g. Singapore-Tasmania- Singapore

Air Service and Routes
  • Privately owned jet - business travellers
    (usually senior executives) fly on a corporate
    jet that their company owns, e.g. Donald Trumps
    (Private Jet B727-23) owns NYC Plaza hotel and
    Atlantic Citys Taj Mahal Casino etc.
  • Wholly or fractional ownership may be less
    expensive than frequently buying first or
    business class seats for their executives

Types of flights and journeys
  • 1) NonStop- from origin to destination with no
    intermediate stops
  • 2) Direct - flight from origin to destination
    with one or more intermediate stops but still
    on the same aircraft
  • 3) Connection - passengers must change planes
    at the stopover city

Hubs and Spokes network
  • Precise timing of arriving flights to offer a
    seamless onward transfer to departing flights and
    to maximise the number of attainable connections
    for incoming passengers and to keep at the same
    time the connecting times within defined and
    acceptable limits.

  • Two types of jet aircrafts -
  • 1) Narrow-body jet - diameter of 3 to 4
    metres, a single-aisle, seats arranged 4 to 6
    seats, largest narrow-body jet carries about
    280 passengers
  • e.g. B727, B737, B757, A320

  • Wide-body jet (jumbo jets) - large airliner
    with fuselage diameter of about 6 metres and
    twin aisles, accommodate 200 to 600 passengers
  • e.g. B747, B767, B777, A380

  • 1) the way seating is arranged within the
    aircraft, e.g. 3-4-3, 3-3
  • 2) normally, narrow-bodied jet with one aisle,
    has two seats per row or 3-3 (common sight)
  • 3) wide-body jet, has two aisles and normally
    comes with 3-4-3

Yield Management
  • Also known as revenue management
  • Average amount of revenue earned per airline
    passenger divided by total number of passengers
    miles flown
  • Computer-assisted process that, by assessing
    supply and demand, enables airlines to arrive at
    pricing that yields maximum load factors and

Yield Management
  • Equals profit
  • Everything an airline does to make costs and
    revenues break even
  • Manipulate the variables to make as much profit
    as possible

Budget Airline History
  • Rollin King and Herb Kelleher developed the
    original concept back in 1971 a ticketless
    airline (Southwest Airlines) reducing frills and
    aiming squarely at offering the lowest possible
  • RyanAir through profit warnings and drifting
    balance sheet, decided to follow the same
    business model therefore, cutting the frills and
    focusing on the functionality.

Budget Airlines
  • The factors above contributed to the airlines'
    relative successes, the most pivotal development
    was EasyJet's (Switzerland) pricing model
  • market deregulation in 1997, the practices laid
    down by these EasyJet and RyanAir (UK) were
    adopted by many other budget operators both in
    the UK, throughout Europe and the world.

Budget Airlines
  • In SE Asia it started about 3 years ago
  • Air Asia started in Malaysia followed by many
    others, e.g. ValuAir, Tiger Airlines, Jetstar,
    Phuket Airlines, Jet Airway and Air Sahara, Adam
    Air etc.

Budget Airlines Definition
  • Generally, budget airlines practice the
  • don't issue tickets
  • don't do connections
  • short check in times
  • promote and sell journey 'legs' separately
  • one class, budget
  • sell direct to the public
  • don't have free meals or entertainment

Codes and Jargon
  • To promote efficiency and conciseness in the
    transfer of information, the travel industry has
    developed a system of standardized codes

Code Sharing
  • Allow one carrier to sell seats on another
    carriers flights at a preagreed price e.g. SQ
    and NW with a four-digit flight no.
  • SQ relying on NW to reach out to US cities
  • NW relying on SQ to reach out to Asia and

City Codes
  • IATA assigns and administers all the three-letter
    location identifiers used by the airlines
    worldwide, e.g.,
  • Bangkok - BKK
  • Los Angeles - LAX
  • New York - JFK
  • Singapore - SIN

Classes of Service
  • First Class (P or F class)
  • Business Class (J class)
  • Economy Class (Y class)

Major Airlines with IATA call codes
  • Singapore Airlines (SQ)
  • Malaysia Airlines (MH)
  • Emirates Airlines (EK)
  • Qantas/British Airways (QF/BA)

Major airlines with IATA call codes
  • Japan Airlines (JL)
  • Thai Airways (TG)
  • SilkAir (MI)

Computer Reservation System (CRS)
  • Major systems are called host systems
  • Sellers of a computer system are called vendors
  • Travel businesses that lease access to a system
    are called subscribers

Computer Reservation System (CRS)
  • Airlines that do not host a system but want their
    information displayed are called cohosts.
  • Cohosts pay to have their information displayed
    in the hosts computer system. Some of the
    low-fare carriers have chosen not to participate
    in the systems

Computer Reservation System (CRS)
  • Sabre (USA)
  • Apollo/Galileo (UA/European Airlines) Owned by
    Travelport which bought Apollo and Worldspan)
  • Worldspan (UK)
  • Amadeus (Europe) founded by Air France,
    Lufthansa, Iberia, and SAS
  • Abacus (Singapore)

The Airline Reservation
  • Flight itineraries
  • Effective/discontinued
  • Frequency codes
  • Minimum connecting times
  • Seat availability
  • Confirmation
  • Wait Lists

Methods of distribution
  • Airports, city ticket offices (CTOs) and
    telephone networks
  • Travel agencies
  • The Internet
  • Post Office (Air Asia)
  • SMS (Air Asia)

Commonly used terms
  • Commercial flight - seats sold by an airline to
    the general public
  • Gateway - city and/or airport that serves an
    airline as its departure/arrival point for
    international travel

Commonly used terms
  • Frequent-flyer programs (FFPs) - initiated by
    American Airlines in the late 1970s and quickly
    copies by almost every airline, frequent-flyer
    programs (FFPs) reward their members for the
    number of miles flown on an airline and its
    affiliates, e.g. Krisflyer, Mileage Plus, World
    Perks, Enrich, Royal Orchid Plus etc.

  • The aviation industry has evolved from an infant
    stage to a very competitive environment with an
    emerging of budget airlines.
  • The different types of commercial planes that are
    in the market and various common terms that are
    used in the day-to-day running of the aviation
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