Aviation Management
The Airline Industry
ASPIRE
Yasitha Lakpathi
The Airline Industry
Name: M. L. Yasitha Lakpathi
Ecru number: 092
Subject: Aviation Management
Lecture: Srilal Perera
Date: 22nd December 2010
Word count: 2019
Contents
1. Introduction to airline industry……………………………………….3
i. Climate changes ………………………………………………....3
ii. Impulsiveness of oil price ……………………………………….4
iii. Economy…………………………………………………………5
iv. Technological changes…………………………………………...5
v. Shortage of skilled personnel…………………………………….6
2. Characteristics…………………………………………………………6
3. Development of aviation industry…………………………………….7
4. Type of airline service…………………………………………………8
i. Scheduled Flights service ………………………………………..8
ii. Non scheduled Flight service…………………………………….8
5. Scheduled flight service……………………………………………….8
i. Regional airlines…………………………………………………..8
ii. Major international airlines……………………………………….9
iii. Low cost airlines………………………………………………….9
6. Basic types of travelers………………………………………….……..9
i. Business traveler………………………………………………….9
ii. Leisure traveler…………………………………………………...9
7. Conclusion about airline industry……………………………...10
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Airline industry
Day by day world is changing every movement. In that situation the ways
transportation is also changed. There are lot of transport systems in the world, such as
automobile, buses, railway, airway, sea, oil pipelines, inland water-ways and airfreight &
cargo. The airline industry is part of huge industry which moves people and goods from one
destination to another. The airline industry is service industry.
Few inventions have changed how people live and experience the world as much as
the invention of the airplane. During both World Wars, government subsidies and demands
for new airplanes vastly improved techniques for their design and construction. Following
the World War II, the first commercial airplane routes were set up in Europe. Over time, air
travel has become so commonplace that it would be hard to imagine life without it. The
airline industry, therefore, certainly has progressed. It has also altered the way in
which people live and conduct business by shortening travel time and altering our concept of
distance, making it possible for us to visit and conduct business in places once considered
remote. (http://www.investopedia.com/features/industryhandbook/airline.asp).
In countiously changing environment, the aviation has to face more challenges.
These are five challengers the aviation facing
1. Climate changes; mankind is confronted with a twofold challenge. Today the
environment becomes uncontrolled. There are so many disasters happening
worldwide. Global warming, Green house gas, solar radiations, volcanic eruption,
glacier melting these are some changes.
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La bildo estas kopiita de Wikipedia: en. La originala priskribo estas: Graph of CO 2 (Green
graph), temperature (Blue graph), and dust concentration (Red graph) measured from the
Vostok, Antarctica ice core as reported by Petit et al., 1999. Higher dust levels are believed
to be caused by cold, dry periods.
( http://en.wikipedia.org/wiki/File:Vostok_Petit_data.svg)
(http://www.chevron.com/globalissues/climatechange/sevenprinciples/#)
2. Impulsiveness of oil price; “The challenges for Asia include: working through
ICAO to accommodate the diverse needs of the region, taking advantage of the
tremendous business opportunities in developing sustainable second generation
biofuels. Biofuels have the potential to reduce aviation’s carbon footprint by up
to 80%. “Five airlines have successfully tested biofuels and we expect
certification within 2011 at the latest. Aviation biofuel is a US$100 billion plus
business opportunity.” (http://www.iata.org/pressroom/pr/pages/2010-02-01-
01.aspx)
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(http://www.chevron.com/globalissues/climatechange/sevenprinciples/#)
3. Economy; ups and down of economy is the big trouble to aviation industry. When
the economy was high majority of people away from travelling. It’s big problem
to aviation industry.
(http://www.chevron.com/globalissues/climatechange/sevenprinciples/#)
4. Technological changes; in a rapidly changing environment people inventing
more powerful machines. Those machines are valuable and fast. When that
machine came to public, people have to spend more money to work with them.
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5. Shortage of skilled personnel; in aviation industry there are lot of people
working, but when their service expand they want more skilled people to handle
service. But only few skilled people they have. Its big problem aviation has to
face.
Characteristics
Every organization has similar characteristics. It must require carry on their service.
1. An organizational structure
2. Usable network
3. Base station
4. As means of transport
Those are the characteristics organization requires. In aviation industry have
network as airways and the stations as airports. The planes fly through air by using
navigation system. Every country has their own air space control and it supervised by Air
Traffic Control (ATC) system. Although when air craft on sky it also supervised by ATC.
Basic function of an airline is to transport people and goods from one destination to another.
But some planes made to carry higher weight of cargo.
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Development of aviation industry
Orville and Wilbur Wright capped four years (December 17, 1903) of continuous
research and design earn with 120 foot, 12 second flight at Kitty Hawk, N.C.-the first
powered flight in a heavier – than air machine. Leon Delagrange was the passenger, who
flew with French pilot Henry Farman from a meadow outside of Paris in 1908. Many years
later the world war one has began. With the advent of world war one. People thought the
military value of aircraft was quickly recognized. They added powerful engine, enabling air
craft speeder, and also they made larger air craft’s.
In that situation some European countries started. In 1917 the united state’s
government started new way of transport mail by air. By the mid-1920’s mail service was
flying 2.5 million miles and delivering 14 million letters continuously. After that major step
forward the creation of a private Air transport. In that situation contract air-mail act,
President Calvin Coolidge appointed a board to recommend a national aviation policy. In
1926 legislation authorized the secretary of commerce designate air routes to develop air
navigation systems, license pilots, and aircrafts and investigate accidents.
After a long period the company Boeing built the first modern passenger
airliner, “the Boeing model 247”. Also the Boeing Company made air craft’s for military.
Several changes after the plane called DC-three changed the world. It was the air craft to
enable airlines to make money carrying passengers. Also Boeing 247 and the DC-three
represented advanced air craft design. Jan, 3, 1936 the air transport association was (ATA)
founded. Their purpose was “To do all things tending to promote the betterment of airline
business and general, to do everything in its power to best serve the interest and welfare of
the members of the association and the public at large”.
Aviation develops relentlessly through world war-two and also after that.
Aviation is one of the huge transport system networks for passengers and cargo. When the
21st century started, the majority of people use to travel by air.
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Type of airline service
The airline service exists in an intensely competitive market. Not all air lines are created
equal, as most for business purpose. There is lot of private airlines –however, in many
countries the government owns the airlines. The airlines offer two main types of service.
Scheduled flight service and non-scheduled flight service (charter flights).
Scheduled Flights service providing the pre-scheduled routes and pre-planned time table.
Scheduled flight publishes regular service as customers have to follow airline’s schedules.
Non-scheduled flight service (charter flight) sometimes referred to as an air taxi. Charter
flights operate normal schedules, by a hiring arrangement with a particular customer.
Most of the airline companies belong to International Air Transport Association
(I.A.T.A), these companies have signed agreements with I.A.T.A. The I.A.T.A creates
regulations and standards for international air transport. 136 countries and 260 member
airlines belong to I.A.T.A.
Scheduled Flights service
The scheduled flight service can be categorize in to three major airline,
1. Regional airline service
Airlines that operate regional aircraft to provide passenger air service to communities
without sufficient demand to attract mainline service. Regional airlines also national flag
carriers. There are three ways for a regional airline to do business:
I. As a feeder airline, contracting with a major airline, operating under their brand name,
filling two roles:
a. Deliver passengers to the major airline’s hubs from surrounding communities
(this is known as regional feed or regional traffic), and
b. Increase frequency of service in mainline markets during times of day/days of
week when demand does not warrant use of large aircraft.
II. Operating under their own brand, providing service to small and isolated
communities, for whom the airline is the only reasonable link to a larger town.
III. As an independent airline larger than an air taxi or commuter airline service, that
operates scheduled point-to-point transit service under its own brand, that does not
meet the descriptions above or fly larger "mainline sized" (over 100 seats) aircraft".
(http://en.wikipedia.org/wiki/Regional_airline)
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2. Major international airline service
Major international airlines are largest airlines that connect the main cities of the
world. Typically major international airlines are also the largest employers among
airlines. These airlines can fly anywhere in the world. They have capability to handle
international airports worldwide.
3. Low cost airline service
A low-carrier is an airline that provides low fares. Low-cost carrier have limited
standard. To make up for revenue lost in decreased ticket price, the airline may charge for
extras. Low-cost airlines using simplified routes like point to point flight service.
Basic types of travelers
People travel for their own purpose. The development of the world has changed the
way we travel. Most of people travel by air, because the airline provide worldwide transport
system network for passengers and cargo. That important for global business/commerce and
for private travel & tourism.
So when we wonder why we travel, and where it all started, it might be comforting to
think about our predecessors, and how they moved first out of necessity, then for religion,
migration, emigration, commerce, enlightenment and finally for pleasure. Today each of our
personal reasons may vary, but one thing is certain: there will never be rest for a species that
can only move, move and keep moving. (http://matadornetwork.com/bnt/2007/09/17/a-
history-of-why-people-travel/)
Business travelers
The people who travel for business are the business traveler. Today most of people
travel for to do business. They travel with their executives, managers, sales peoples and other
employees to meetings which are out of country or town. Some companies have their own
planes and also crew on staff. Some companies hire plane and crew for their travel.
Leisure travelers
Travelling is an activity that can be enjoyed by just about anyone. Why wouldn’t it
be? It gets you away from your normal scenery to something totally new. Traveling can
being a new sense of life into a person and make it a very interesting life and give you a
complete new view on the world. There are many people all over the world who travel for
recreational or personal reasons. The airline extracted their services attracted people to
travel. In addition, governments, in developing countries have realized the benefits of
tourism to their national economics.
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Conclusion about airline industry
The airline industry is a huge transport system worldwide. It moves people and good
from one destination to another. The airline industry is service industry. In rapidly changing
environment the airline industry has face to challengers. These are climate changers,
economy changers, ups and downs of oil price, technological changes, and shortage of skilled
personnel. The aviation has to survive through these challengers.
Every organization runs through their own structure. That means, ways of
transport must have characteristics. These are similar characteristics organizational structure,
useable network, base as means of transport. In aviation industry have net work as airways
and the stations as airports. Transport in the air supervised by ATC.
Wright brothers invented first air craft, after that continuously develop the
aviation industry. Through world war one & world war two it developed quickly when the
21st century started the majority of people use to travel by air.
The airline service provides two main types of service scheduled & non
scheduled flight service. Scheduled flight service publishes regular service customers have to
follow airline’s schedules. Non scheduled flight services operate normal schedule flight
referred to as an air taxi. Schedule fight service can be categorized in to three. These are
regional airline, major international airline, and cost airline service. Main service of the
airline is transport passengers and cargo. There are two basic types of passengers travel by
using airline. Business traveler travel to handle their business, which is out of country. The
other traveler is leisure traveler. The majority of people travel for recreational or personal
reasons.
By connecting people all over the world result in global economic growth,
social benefits by providing greater communication in different parts and provides access to
remote places in the world.
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