Functions Of Demand For Air Transport

The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B.

Overall, the five forces model suggests that the overall intensity of competition in the airline industry is likely to be severe. Back in the early 1980 's competition was very intense. During the late 1980 's the monopolization of major routes by a few major carriers, the limited availability of free landing spots at major hubs and the emergence of limited brand loyalty and tacit price agreements have all helped reduce the intensity of competition. However, as already mentioned, slumping demand in the early 1990 's plunged the industry once more into a severe price war. Airline travel is a commodity-type product, with limited potential for differentiation.

The Marketing Mix is the name given to the elements which are the key components which a marketing plan should be based upon. Typically in Marketing literature there are four elements: price, place, promotion and product, however this is now sometimes expanded to incorporate another 3 elements: people, physical evidence and process. Pricing policy is clearly very important to the marketing mix and is affected by variables such as firm’s objectives, the nature of competition, demand and firm costs. Firms operate pricing in different ways according to their marketing strategy and the industry in which they participate; an example of pricing methods will be shown and evaluated further in the

his case article summarizes two case series. Each case series includes three subcases and has an associated teaching note. These six short cases introduce many of the concepts that underlie the practice of airline revenue

The benefits to building a new stadium in a city is the Construction of the proposed ballpark would have an immediate, one-time impact on the local economy and the District’s tax collections. The $272 million ballpark will be build by a private company with the job of completing the ballpark in a 3years. Inside the contract value, the contractor will spend over a $100 million dollars on building materials and pay $80 million in payroll to workers during the construction period. The projected payroll earnings will support over 2,000 construction jobs while the building materials spending will bring about an additional 1,300 jobs with a total payroll over $40 million. Discounting leakages to other jurisdictions, spending on materials, the local income tax levy on the construction

The cost of fares is not known apart from the official government estimates show fare revenues of up to £34bn over a 60-year period. In terms of creating employment government Ministers claim the London-West Midlands section alone would create around

The bulk of aviation demand models have been of the multiplicative form to utilize that

The purpose of the administration developing newer policies is to “provide clear and thorough guidance to airport sponsors on the conduct of project-level benefit-cost analysis for capacity-related airport projects.” (FAA, 1999) The administration encourages the use of innovative methods to quantify benefits and cost that yields project merit. Undergoing the development of any new airport requires a great deal of strategic planning. Therefore, this comprehensive report provides an analysis of cost, construction, and operation.

Recently, the WSJ had displayed data regarding United Airlines signifying that the company was not covering their flight costs from San Francisco to Washington D.C. Due to this, they had assumed United Airlines is unable to cover their costs, so in this case it was suggested for them to discontinue their services. To begin, it is critical that United Airlines should preform a marginal analysis in order to make a final decision. A marginal analysis focusses on incremental costs and benefits that will help aid companies in making a final decision. After completing this analysis, the company can then make an executive decision on whether or not they should discontinue their flights.

These external competitive forces can restrict and shape pricing policy on some of EasyJet’s less profitable routes as they seek to compete with their competitors.

With long-term growths in passenger and freight volumes expected in airports all around the world, airports are planning and implementing various strategies to meet those expected future demands (Solak et al. 2009; Kwakkel et al. 2010). A planner’s proposals and strategies in which an airport can implement over a number of years in order to facilitate the forecasted growth of passengers and freight is known as an airport master plan (Kwakkel et al. 2010). Bradley (2010) states that an airport’s capacity is a result of a number of different combined factors. These include how much aircraft movement over a specific period its runway can handle, the number of aircrafts its apron can accommodate, as well as how much incoming and outgoing passengers and freight its terminal can facilitate per hour (Caves 1994; Bradley 2010). An airport master plan can include airport expansion, maintenance and upgrades, the development of a new airport or even the utilisation of multiple airports in a city. Regardless of the plan the necessary design and

Since the airline industry is a direct product of market conditions, it is greatly affected by all externalities. Many people noticed a decline in travel after the September 11th tragedy occurred due to safety concerns. When there is a huge increase in fares that definitely interferes with the demand for travel; it causes the price of tickets to continue to rise since a clear correlation between supply and demand exists. When the economy is doing well in terms of the employment rate, and when the dollar is strong people have the tendency to travel more (Jerram,1998).

The implications of this analysis are that the focus on the Chinese market is justified. The Chinese air travel industry is booming, and indeed this is fueled by that country's rapid growth and the increased demand for

Air freight market is not stable and might be weak because of uncertain international trade increase (Barnard,2015). There was fluctuation in air cargo demand over the last 10 years from 2006 to 2016 which indicates that cargo demand could be changed by some external and internal influences. Some figures were released about worldwide air freight market and presented that air cargo capacity increased 2.2%, comparing to 2014. While this was the 5% growth calculated by The International Air Transport Association (IATA), the growth of cargo volumes in 2015 was much slower than 2014(Barnard, 2015). However, some experts pointed out that global air freight market get a positive growth from 2011, and it is enjoying a relatively steady growth, due to the enhanced trade and economic recovery after the global financial crisis of 2008(Huang,2016). Because of sluggish world trade growth, air cargo suppliers face a lot of challenges including alternative transportation, perspective uncertainty and unexpected policy and here are some potential solutions: improving customers service, efficiency, security and reducing negative environmental impacts.

Future Air Navigation Systems (FANS) is a concept that was developed by the International Civil Aviation Organization (ICAO) in partnership with Boeing, Airbus, Honeywell and others in the air transport industry to allow more aircraft to safely and efficiently utilize a given volume of airspace. Today FANS is used primarily in the oceanic regions taking advantage of both satellite communication and satellite navigation to effectively create a virtual RADAR environment for safe passage of aircraft. FANS play a key role in supporting many of the evolving CNS/ATM (Communication-Navigation-Surveillance/ Air Traffic Management) strategies. Today, FANS-1 is the standard used on Boeing aircraft and Airbus standard for FANS is known as FANS-A. Both standards are considered first generation FANS architecture.