Airline Operations and Management A Management Textbook 2nd Edition by Gerald N Cook, Bruce Billig ISBN 9781000870091 100087009X

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ISBN 10: 100087009X
ISBN 13: 9781000870091
Author: Gerald N Cook, Bruce Billig

Airline Operations and Management A Management Textbook 2nd Edition Table of contents:

1 Historical Perspective

1.1 Introduction

1.2 Transportation and Commerce

1.3 The Earliest Airlines

1.4 Regulation

1.5 Government-Supported Airlines

1.5.1 British Airways

1.5.2 Qantas

1.6 US Air Mail

1.7 Economic Regulation

1.8 CAB Economic Regulation 1938 to 1978

1.9 Advances in Aircraft Technology

1.10 Post-War Airline Growth

1.11 The Jet Age

1.12 US Deregulation

1.12.1 The Airline Deregulation Act of 1978

1.12.2 Post-Deregulation Evolution

1.12.3 US Deregulation Results

1.12.4 CAB in Retrospect

1.13 Deregulation in Europe and China

1.13.1 Europe

1.13.2 China

1.13.3 Comparison of Deregulation Outcomes

1.14 Airline Industry Today

1.15 Summary

1.16 Case Study: India

References

2 Supply and Demand for Air Transportation

2.1 Introduction

2.2 Size, Scope, and Economic Importance

2.3 Factors Driving Global Air Transportation Growth

2.3.1 Globalization

2.3.2 Demographics

2.3.3 Regulation

2.3.4 Factors of Production

2.4 Air Cargo

2.5 Forecasting Air Travel

2.5.1 Macroforecasting

2.5.2 Route Level Microforecasting

2.5.3 Demand

2.5.4 Supply

2.6 New Route

2.7 Summary of Factors Affecting Airline Demand and Supply

2.8 Summary

2.9 Case Study: JetBlue to London

References

3 Route Structure

3.1 Introduction

3.2 History

3.3 Generic Route Structures

3.4 Linear

3.5 Point-to-Point

3.5.1 Fast, Cheap, and Independent

3.5.2 Limited to Large Markets

3.5.3 Example: Ryanair

3.6 Hub-and-Spoke

3.6.1 Operation

3.6.2 American Airlines Dallas-Ft. Worth hub

3.6.3 Advantages

3.6.4 Disadvantages

3.6.5 Bottom Line

3.7 Hub Airport Requisites

3.7.1 Legal, Financial, and Capacity Restrictions

3.7.2 Hub Failures

3.8 Hybrid Route Systems

3.9 Hub-and-Spoke Variations

3.9.1 Multiple Hubs

3.9.2 Directional Hub-and-Spoke Systems

3.9.3 Rolling Hub

3.9.4 Focus Cities

3.9.5 Tailored Complexes

3.10 Competing Hub and Spoke Systems

3.11 Evolving Routes Systems

3.12 Summary

3.13 Case Study: United and American Airlines’ Fickle Domestic Route Systems

References

4 Product Offering

4.1 Introduction

4.2 Strategic Choices

4.2.1 The Marketing Concept

4.2.2 Generic Strategies

4.2.3 Industry Evaluation: Porter’s Five Forces

4.2.4 Dimensions of Product Choice

4.3 Full-Service Network Carriers

4.3.1 Product Range

4.3.2 FSNC Example: Delta Air Lines

4.4 Regional Airlines

4.4.1 FSNC Affiliated Regional Airlines

4.4.2 Regional Airline Example: SkyWest Airlines

4.4.3 Independent Regional Airlines

4.4.4 Regional Aircraft

4.4.5 Regional Airlines Worldwide

4.5 Low-Cost Carriers

4.5.1 Business Model

4.5.2 Ancillary Revenues

4.5.3 LCC Example: Wizz Air

4.5.4 Long-haul LCCs

4.5.5 LCC within Full-Service Network Carriers

4.6 Hybrid Airlines

4.6.1 Examples: Alaska and JetBlue

4.7 Focus Carriers and Tailored Products

4.7.1 All-Inclusive Charter Airlines

4.7.2 All Business Class Service

4.8 Cargo Airlines

4.8.1 Combination Carriers

4.8.2 Integrated Carriers

4.8.3 All-Cargo Airlines

4.8.4 Distribution

4.9 Summary

4.10 Case Study: Singapore Airlines

4.10.1 SilkAir

4.10.2 Tiger Airways

4.10.3 Scoot

4.10.4 NokScoot

4.10.5 Others

4.10.6 Too Ambitious, Too Complex

Notes

References

5 Flight Schedule Development and Control

5.1 Introduction

5.2 Airline Planning Process

5.3 Strategic Planning

5.3.1 Long-Range Plan/Fleet Selection

5.3.2 Product Planning

5.4 Flight Schedule Development

5.4.1 Objectives

5.4.2 Fleet Assignment

5.4.3 Trade-offs

5.4.4 Optimization

5.4.5 The Passenger Service System

5.5 Asset Assignment

5.5.1 Aircraft Assignment

5.5.2 Aircraft Flow Chart

5.5.3 Crew Scheduling

5.6 Tactical Management

5.6.1 Airline Operations Control Center

5.6.2 Flight Schedule Disruptions

5.6.3 Managing Irregular Operations

5.6.4 Dynamic Scheduling

5.7 Continuous Improvement

5.7.1 Goals

5.7.2 Measurement

5.7.3 Corrective Action

5.8 Summary

5.9 Case Study: Summer Chaos

5.9.1 The Chaos

5.9.2 Labor Shortage

5.9.3 Corrective Actions

Note

References

6 Labor Relations

6.1 Introduction

6.2 Airline Direct Employment

6.2.1 Global

6.2.2 Regional

6.2.3 Projected Growth

6.3 Characteristics of Airline Labor

6.3.1 Highly Skilled and Trained

6.3.2 Highly Paid

6.3.3 Highly Regulated

6.3.4 Highly Unionized

6.3.5 Essential to Production

6.4 International Union Labor

6.4.1 International Labor Laws

6.4.2 Types of Unions

6.5 Union Formation

6.5.1 Election and Certification

6.5.2 Election of Officers and Representatives

6.5.3 Initial and Recurrent Collective Bargaining Agreement Negotiation

6.5.4 CBA Elements

6.6 Contract Maintenance

6.6.1 Grievances

6.6.2 Self-Help: Strikes and Lockouts

6.7 Challenges to Management

6.7.1 Restrictions of Ability to Manage

6.7.2 The Increased Cost of Labor Relations

6.7.3 Universal Management Opposition to Unions

6.8 Managing Labor Costs

6.8.1 Wage Concessions

6.8.2 Outsourcing

6.8.3 Atypical Employment

6.8.4 Flag of Convenience

6.8.5 New Entrants

6.8.6 Bankruptcy

6.9 Mergers and Seniority

6.9.1 Labor Protective Provisions

6.10 Summary

6.10.1 Pros

6.10.2 Cons

6.11 Case Study: Ryanair

Notes

References

7 Economics and Finance

7.1 Introduction

7.2 Profit History

7.2.1 Profit by World Region

7.2.2 Net Profit Margin

7.2.3 Return on Invested Capital

7.3 Earning Profits

7.3.1 Airline Finance Metrics

7.3.2 Yield History

7.3.3 Available Seat Miles

7.3.4 Load Factor

7.3.5 Profit Equation

7.3.6 Managing Revenue

7.4 Ancillary Revenue

7.5 Cost Structure

7.5.1 Labor

7.5.2 Fuel

7.5.3 Ownership and Rental Expenses

7.5.4 Taxes

7.5.5 Fixed and Variable Costs

7.6 Economics of Scale, Scope, and Density

7.6.1 Scale

7.6.2 Density

7.6.3 Scope

7.7 Legacy Carrier Restructuring

7.8 The COVID-19 Pandemic

7.9 Summary

7.10 Case Study: The Turbulent History of Aer Lingus

References

8 Fleet Selection and Acquisition

8.1 Introduction

8.2 Aircraft Selection

8.2.1 Range and Payload

8.2.2 Aircraft Operating Costs

8.3 Fleet Acquisition

8.3.1 Internal Financing

8.3.2 Equity Financing

8.3.3 Debt Financing

8.3.4 Leasing

8.3.5 Financing Portfolio

8.4 Summary

8.5 Case Study: Qantas Orders New Narrow-bodies from Airbus

References

9 Pricing and Revenue Management

9.1 Introduction

9.2 Regulated Prices

9.3 The Objective and Rationale for Revenue Management

9.4 Revenue Management Product Characteristics

9.5 Revenue Management Components

9.6 Overbooking

9.7 Seat Allocation and Pricing

9.7.1 Price Discrimination

9.7.2 Market Segmentation

9.7.3 Estimating Demand

9.7.4 Expected Marginal Seat Revenue

9.8 Fare Buckets and Fare Nesting

9.8.1 Updating Expected Bookings

9.8.2 Selling-Up

9.8.3 Revenue Enhancement with Revenue Management

9.9 Network Allocation

9.9.1 Hidden City Ticketing

9.10 Revenue Management in Air Freight

9.11 The Future of Revenue Management

9.12 Summary

9.13 Case Study: Southwest Airlines Dynamic Pricing and Seat Allocation

Notes

References

10 Distribution

10.1 Introduction

10.2 Airline Distribution History

10.2.1 The OAG

10.2.2 Payment

10.2.3 Ticketing

10.2.4 Growth of Travel Agencies

10.2.5 The Reservisor

10.2.6 The Magnetronic Reservisor

10.2.7 Reserwriter

10.2.8 Sabre

10.2.9 Travel Agents Get Involved

10.3 Birth of the Global Distribution System

10.3.1 CRS Favoritism

10.3.2 GDS Regulation

10.4 GDS Divesture and Worldwide Growth

10.5 Deregulation

10.5.1 New Entrants

10.6 The Rise of the Internet Changes the GDS Environment

10.6.1 Airlines’ Internal Reservation Systems

10.6.2 Shift in Travel Agency Approach

10.7 Rise of Online Travel Agencies

10.7.1 Standard Online Travel Services

10.7.2 Opaque Travel Services

10.7.3 Fare Aggregators and Metasearch Engines

10.8 The Future of Airline Distribution

10.8.1 New Distribution Capability

10.8.2 Mobile Devices

10.9 Summary

10.10 Case Study: The Rise and Fall of a Travel Agency Legend

Note

References

11 International Air Transportation, Policy

11.1 Introduction

11.2 Air Service Agreements

11.3 US Open Skies

11.3.1 US/Netherlands Open Skies

11.3.2 US/EU Open Skies

11.3.3 US/China Free Skies

11.3.4 US/Japan Open Skies

11.4 Expansion of Open Skies

11.5 State-Owned Airlines

11.5.1 State versus Private Ownership

11.5.2 Privatization

11.5.3 Results

11.6 Global Alliances

11.6.1 History of the Big Three Global Airline Alliances

11.6.2 Marketing and Revenue Benefits

11.6.3 Operating Benefits

11.6.4 Antitrust Immunity

11.6.5 Establishing an Alliance

11.6.6 Passenger Benefits

11.6.7 Alliance Instability

11.6.8 Equity Alliance

11.7 Consolidation – Mergers and Acquisitions

11.8 Summary

11.9 Case Study: Alitalia

References

12 Looking Ahead

12.1 Introduction

12.2 Environmental Constraints

12.3 Fuel Expenses

12.4 Diminishing World Trade and Business Travel

12.5 Labor Shortage

12.6 Complex Airline Structures

12.7 Struggle for Stable Profits

12.8 Summary

References

Glossary

Index

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