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Scheduled Passenger Air
Transportation Industry
Brooklyn Rule
04/19/2023
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Table of Contents
Industry background ....................................................................................................................... 4
Air transport trends ......................................................................................................................... 4
Targeted market .............................................................................................................................. 5
Revenue flow .................................................................................................................................. 6
Competitors ..................................................................................................................................... 6
Public interest in air transport ......................................................................................................... 7
Conclusion ...................................................................................................................................... 8
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Table of Figures
Figure 1: air transport passengers’ trend. ........................................................................................ 5
Figure 2: target market for this industry ......................................................................................... 6
Figure 3: financial data ................................................................................................................... 6
Figure 4: competition and revenue flow ......................................................................................... 7
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The scheduled air transport sector’s primary activity has been providing passenger air
transportation over regular routes and according to predictable schedules. Numerous airlines are
operating along both regular and erratic routes in this sector. The passenger air transportation
sector serves both domestic and foreign destinations. This transportation method has simplified a
lot of things. It has expanded more quickly to help worldwide regional economic, tourist, and
educational endeavors. The industry is anticipated to develop even more to attract interested
parties.
Industry background
Since the Paris Convention of 1919, many countries have had the authority to control the
airspace above their territories globally. Previously, prices, routes, and timetables for regularly
established domestic services were set by or approved by national authorities. In defiance of
these cost restraints, charter flights emerged as a form of air travel. A growing number of
countries are implementing "open skies" policies, which aim to do away with financial oversight
of domestic aircraft services (Martinez et al., 2019). However, even states that have liberalized
the aviation sector have hesitated to let foreign airlines operate in their territory. Bilateral
arrangements comprising an exchange of "freedoms" broaden international air services.
Although operating costs differ significantly between airlines, labor makes up most. Business
passengers, tourists, freight transporters, and mail transporters are the primary sources of demand
for airline services (Martinez et al., 2019). To combat these financial constraints, airlines have
gone out of business, requested government assistance, increased operational effectiveness,
privatized, and formed alliances with other airlines.
Air transport trends
The airline sector has been adjusting to the "new normal" by making as many things digital and
electronic as possible, including automated kiosks, digital advertisements, security checks,
electronic boarding permits, and computerized boarding procedures. Besides, the aviation sector
is migrating to the cloud to lower its carbon footprint with up to 30% and provide numerous
benefits, including increased security and cost savings. As shown in figure 1, Internet of Things
(IoT)-enabled gadgets will use cloud-based networks as their infrastructure to track travelers
through the check-in and boarding processes independently (Thomas, 2021).
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Figure 1: air transport passengers’ trend.
(Statista, 2023)
The foundation for AI-based algorithms to derive actionable operational understanding from
trillions of gigabytes of data is interconnected devices and data transferred to the cloud. Machine
learning algorithms and AI-based software can be used to design airplanes, find engine issues,
and cut expenses for servicing.
Targeted market
Airlines target distinct audiences depending on the routes they fly and the services they provide.
Some airlines cater to vacationers, while others focus on business travelers. Regional airlines
only fly locally, unlike airlines that focus on long-distance travel. Low-cost carriers are also
available for those that are concerned about expenses. As shown in figure 2, the target audiences
of low-cost carriers like Spirit Airlines and international carriers like British Airways are very
different.
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Figure 2: target market for this industry
(Tutorials Point India Limited, 2023)
The flight cost is only one factor influencing a traveler's decision to take a particular flight. Other
factors include convenience, flying comfort, an airline's prestige, safety history, and the services
and facilities it provides (n.d.). Some travelers also consider the type of airplane while making
travel arrangements.
Revenue flow
In all but one of the past ten years, the number of booked passengers handled by the world's
airlines has climbed. Due to the coronavirus pandemic, the world's airlines are expected to have
boarded just over 2.2 billion passengers on scheduled flights in 2020 and 2021. As shown in
figure 3, compared to 2019, this represents a more than 50% decline in global air passenger flow
(Federal Reserve Bank of St. Louis, 2022).
Figure 3: financial data
year amount in millions
2009 $116,666.00
2010 $126,902.00
2011 $150,392.00
2012 $157,177.00
2013 $165,683.00
2014 $173,616.00
2015 $174,667.00
2016 $173,035.00
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2017 $181,415.00
20181 $195,170.00
2019 $206,768.00
2020 $82,765.00
2021 $132,534.00
(Federal Reserve Bank of St. Louis, 2022).
An increasing number of passengers in the air transport industry has translated to the revenue
figures in the table above.
Competitors
Not all aircraft operate under the scheduled passenger division. They started operating under this
division after stabilizing and winning customers' confidence. As a result, completion starts here
since some customers may not wait for this timetable. The urgency of the issue one runs to
define the schedule he chooses. As a result, there is stiff competition in this transport sector
between scheduled and nonscheduled air crafts (International Civil Aviation Organization,
2021). Other competitors include road and water transport. Some products can be conveniently
transported to their destination in time by water or road. As shown in figure 4, these two are
affordable compared to air transport, thus competition unfavorably.
Figure 4: competition and revenue flow
Year Amount in billion
dollars.
2014 $808
2015 $812
2016 $816
2017 $820
2018 $824
2019 $828
2020 $464
(International Civil Aviation Organization, 2021)
The air transport industry is among the most competitive sector in the 21st century. Many people
have relied on this means of transport, generating a lot of finances in recent years. Besides, many
people have ventured into the sector since it is lucrative and profitable enough to sustain them.
As a result, revenue generated had increased continuously recently except for 2020, when the
global was in a severe economic crisis.
Public interest in air transport
Corporations in the aviation sector are in high demand for personnel with a wide range of
professional credentials. Additionally, as a business location, air travel secures jobs and adds
value in many nations. This allows people and markets to be connected globally through air
travel. For instance, Germany, as a commercial destination, places a great deal of weight on
aviation. Hundreds of thousands of workers with a wide range of professional certifications can
find work at aviation firms. The true significance of air travel, nevertheless, goes well beyond the
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jobs in the aviation industry. On the one hand, air travel significantly contributes to individual
accessibility, which fosters cross-cultural exchange and international understanding
(International Air Transport Association, n.d.). However, aviation links German businesses with
significant global suppliers and market areas. A large part of this is played by air freight,
particularly in trade with nations outside of Europe.
Conclusion
The level of automation in modern airplanes has raised concerns among specific pilots and even
some aircraft manufacturers regarding an overreliance on computerized systems. To tackle this
anxiety of over-reliance, new training courses have been devised. The captain of a plane cannot
be replaced or mechanized out of the cockpit, although technological advancements will keep
contributing to the development of safer and more fuel-efficient aircraft (World Bank, n.d.). The
next front in the customer service war between the top domestic airlines could be high-tech
facilities for business travelers. Onboard airplanes are spacecraft launched-based telephone
systems that can handle calls to and from anywhere worldwide. In-flight fax, computer, and data
transmission services are already popular.
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References
Federal Reserve Bank of St. Louis. (2022). Total revenue for scheduled passenger air
transportation, all establishments, employer firms. Retrieved from
https://fred.stlouisfed.org/series/REVEF481111ALLEST#
Infiniti Research Limited. (n.d.). Scheduled passenger air transport market analysis. Retrieved
from https://analysis.technavio.org/scheduled-passenger-air-transport-market-analysis
International Air Transport Association. (n.d.). The importance of air transport to Kenya - IATA.
Retrieved from
https://www.iata.org/contentassets/0fc44e59164d44579f17356da0cc98fd/iata_kenya_rep
ort.pdf
International Civil Aviation Organization. (2021). Competition in international air transport .
Retrieved from https://www.icao.int/sustainability/Pages/Competition-in-air-
transport.aspx
Martinez, D., Ebenhack, B. W., & Wagner, T. (2019). Energy efficiency: Concepts and
calculations. Elsevier. https://doi.org/10.1016/B978-0-12-812111-5.00007-X
Thomas, G. (2021, February 03). 2020 the worst year in aviation history says IATA. Retrieved
from https://www.airlineratings.com/news/industry-news/2020-worst-year-aviation-
history-says-iata/
World Bank. (n.d.). Air Transport, passengers carried. Retrieved from
https://data.worldbank.org/indicator/IS.AIR.PSGR
