Samenvatting Air transport
Contents
Setting the scene ................................................................................................................... 4
History ............................................................................................................................... 4
Trends ................................................................................................................................ 4
Traffic routes ................................................................................................................... 5
Actors in the Air Transport Industry .................................................................................. 6
Output Indicators ............................................................................................................ 6
Traffic evolution .............................................................................................................. 7
Demand Drivers .............................................................................................................. 7
Institutional Environment Deregulation and Disruption ........................................................ 8
Alternatives .................................................................................................................. 10
Disruptions ................................................................................................................... 10
Evolution ...................................................................................................................... 11
Dimensions of Disruptions: ........................................................................................... 12
Summary ...................................................................................................................... 15
Sustainability in Air transport ............................................................................................ 15
Economic impact .......................................................................................................... 15
Environmental impact ................................................................................................... 19
Social impact................................................................................................................ 24
Demand Analysis ............................................................................................................. 27
Determinants of Demand .............................................................................................. 28
Consumer demand ....................................................................................................... 29
Main determinants of airline demand............................................................................. 30
Market segmantation .................................................................................................... 31
Price elasticity .............................................................................................................. 32
Airline competition........................................................................................................ 33
Air cargo ....................................................................................................................... 33
Conclusion ................................................................................................................... 34
Airport infrastructure and management ............................................................................. 34
Categorization of Airports? ............................................................................................ 35
The output of an airport ................................................................................................. 36
Profitability of Airports:.................................................................................................. 37
Airport connectivity ....................................................................................................... 39
Main Airline developments ............................................................................................ 40
, Alliance and Network travel ........................................................................................... 40
Key Airport developments.............................................................................................. 41
Airport business model ................................................................................................. 41
Air traffic Management...................................................................................................... 42
Air traffic management and design................................................................................. 42
Air Traffic Flow Management .......................................................................................... 43
Air Traffic service........................................................................................................... 43
The European Air Navigation Service Industry ................................................................. 45
Challenges in the European ANS sector ......................................................................... 47
Single European Sky and the way forward (solutions)...................................................... 47
Developments in ANSP business models ....................................................................... 49
Brussel Airlines turbulence to Turnaround ......................................................................... 50
Cost and Supply Analysis .................................................................................................. 54
The importance of knowledge about airline cost structures ............................................ 54
Airline operating costs (AOC) ......................................................................................... 55
Airline P&L (Profit and loss) ............................................................................................ 57
Relationship Technology vs Costs .................................................................................. 58
Quid economies of scale, scope, density? ..................................................................... 60
Conclusion ................................................................................................................... 60
Airline Marketing............................................................................................................... 60
Defination of Marketing ................................................................................................. 60
Developing the Marketing Concept ................................................................................ 61
Steps in the Marketing process ...................................................................................... 61
Pricing and revenue management ..................................................................................... 67
The origin of Revenue Management ............................................................................... 67
Definition and principles of revenue management .......................................................... 67
Demand-management decisions................................................................................... 70
Simple static capacity allocation models ....................................................................... 71
Extensions to Littlewood’s two-class model ................................................................... 72
Overbooking ................................................................................................................. 74
Other considerations regarding airline pricing ................................................................ 75
Air Cargo .......................................................................................................................... 76
LCC’s ............................................................................................................................... 81
LCC characteristics and economic concepts ................................................................. 81
Overview of the LCC market .......................................................................................... 83
Impact on traditional carriers and business models ....................................................... 85
,Impact on airport strategies ........................................................................................... 86
Impact on competition and economic benefits .............................................................. 87
, Setting the scene
History
Chicago convention 1st December 1944 ( sets the basic of all the regulations for air transport in
the world
They needed a regulated framework
Freedom rights (you can fly over every country you want)
2nd freedom right (if you need a technical stop that country needs to allow you a second stop)
3rd freedom right (you can transport people from your country to another one)
4th freedom right (the other way around)
ASA air standard agreement you need that between 2 countries
ICAO (International civil aviation organization) based in Montreal and there are all the
regulations for the aviation established and transmitted in the local regulation (for a example to
have a pilot license it should be exact the same whether you get it here or in Indonesia)
Trends
• The airlines are the loser of the game, all the other stakeholders are doing well
• Airports are jackpots especially airports like Londen Heathrow, Paris, Amsterdam
because they operate in a fixed costs environment so if you have a lot of landings in an
hour you revenue will get significantly higher
• Fixed costs like lighting, electricity
• The more passengers you have the more they will spend on parking, shops
• Austin has only one flight an hour so for them it’s very hard to be profitable if you
compare them to London 60 flights an hour
Contents
Setting the scene ................................................................................................................... 4
History ............................................................................................................................... 4
Trends ................................................................................................................................ 4
Traffic routes ................................................................................................................... 5
Actors in the Air Transport Industry .................................................................................. 6
Output Indicators ............................................................................................................ 6
Traffic evolution .............................................................................................................. 7
Demand Drivers .............................................................................................................. 7
Institutional Environment Deregulation and Disruption ........................................................ 8
Alternatives .................................................................................................................. 10
Disruptions ................................................................................................................... 10
Evolution ...................................................................................................................... 11
Dimensions of Disruptions: ........................................................................................... 12
Summary ...................................................................................................................... 15
Sustainability in Air transport ............................................................................................ 15
Economic impact .......................................................................................................... 15
Environmental impact ................................................................................................... 19
Social impact................................................................................................................ 24
Demand Analysis ............................................................................................................. 27
Determinants of Demand .............................................................................................. 28
Consumer demand ....................................................................................................... 29
Main determinants of airline demand............................................................................. 30
Market segmantation .................................................................................................... 31
Price elasticity .............................................................................................................. 32
Airline competition........................................................................................................ 33
Air cargo ....................................................................................................................... 33
Conclusion ................................................................................................................... 34
Airport infrastructure and management ............................................................................. 34
Categorization of Airports? ............................................................................................ 35
The output of an airport ................................................................................................. 36
Profitability of Airports:.................................................................................................. 37
Airport connectivity ....................................................................................................... 39
Main Airline developments ............................................................................................ 40
, Alliance and Network travel ........................................................................................... 40
Key Airport developments.............................................................................................. 41
Airport business model ................................................................................................. 41
Air traffic Management...................................................................................................... 42
Air traffic management and design................................................................................. 42
Air Traffic Flow Management .......................................................................................... 43
Air Traffic service........................................................................................................... 43
The European Air Navigation Service Industry ................................................................. 45
Challenges in the European ANS sector ......................................................................... 47
Single European Sky and the way forward (solutions)...................................................... 47
Developments in ANSP business models ....................................................................... 49
Brussel Airlines turbulence to Turnaround ......................................................................... 50
Cost and Supply Analysis .................................................................................................. 54
The importance of knowledge about airline cost structures ............................................ 54
Airline operating costs (AOC) ......................................................................................... 55
Airline P&L (Profit and loss) ............................................................................................ 57
Relationship Technology vs Costs .................................................................................. 58
Quid economies of scale, scope, density? ..................................................................... 60
Conclusion ................................................................................................................... 60
Airline Marketing............................................................................................................... 60
Defination of Marketing ................................................................................................. 60
Developing the Marketing Concept ................................................................................ 61
Steps in the Marketing process ...................................................................................... 61
Pricing and revenue management ..................................................................................... 67
The origin of Revenue Management ............................................................................... 67
Definition and principles of revenue management .......................................................... 67
Demand-management decisions................................................................................... 70
Simple static capacity allocation models ....................................................................... 71
Extensions to Littlewood’s two-class model ................................................................... 72
Overbooking ................................................................................................................. 74
Other considerations regarding airline pricing ................................................................ 75
Air Cargo .......................................................................................................................... 76
LCC’s ............................................................................................................................... 81
LCC characteristics and economic concepts ................................................................. 81
Overview of the LCC market .......................................................................................... 83
Impact on traditional carriers and business models ....................................................... 85
,Impact on airport strategies ........................................................................................... 86
Impact on competition and economic benefits .............................................................. 87
, Setting the scene
History
Chicago convention 1st December 1944 ( sets the basic of all the regulations for air transport in
the world
They needed a regulated framework
Freedom rights (you can fly over every country you want)
2nd freedom right (if you need a technical stop that country needs to allow you a second stop)
3rd freedom right (you can transport people from your country to another one)
4th freedom right (the other way around)
ASA air standard agreement you need that between 2 countries
ICAO (International civil aviation organization) based in Montreal and there are all the
regulations for the aviation established and transmitted in the local regulation (for a example to
have a pilot license it should be exact the same whether you get it here or in Indonesia)
Trends
• The airlines are the loser of the game, all the other stakeholders are doing well
• Airports are jackpots especially airports like Londen Heathrow, Paris, Amsterdam
because they operate in a fixed costs environment so if you have a lot of landings in an
hour you revenue will get significantly higher
• Fixed costs like lighting, electricity
• The more passengers you have the more they will spend on parking, shops
• Austin has only one flight an hour so for them it’s very hard to be profitable if you
compare them to London 60 flights an hour