01 - Introduction to Aviation Flashcards
How would you basically describe the airline business in terms of EBIT per offered Seat Kilometer (ASK)
Very cyclic, one downturn every decade
How has overall growth been of the industry?
Steadily growing, but the growth is not only real growth, as it has been pushed with central banks pushing the industry.
What about the fuel prices in the recent years?
Low since 2009/2010 - profits that were made through that were invested into other parts, fuel percentage of flight costs: 25-30% (earlier 40-45%)
Own or lease a plane?
An airline that owns is much less volatile than the leasing one, but of course it needs more liquidity to buy many airplanes.
Profits in the recent years of commercial airlines?
Improvements of profits
How did Delta Airliens revive the bankruptcy?
Merger with Northwest, equity stakes in other airlines, vertical intergration with an oil refinery for $150 which is a very low price (not even an A330) as oil price is the biggest risk
What are the top 3 airliens in terms of Revenue Passenger-Kilometers (RPK)?
American, Delta and United
–> Emirates, China, Southwest, Lufthansa, British, Airfrance, Ryanair
What are top 3 cargo airlines?
FedEx, Emirates, UPS
What are the biggest airports in the world?
Atlanta, Beijing, Dubai, Los Angeles, Tokyo, Ohare Chicago, Heathrow, Hong-Kong, Shanghai, CdG
What is the development of air traffic flows until 2030?
now, still north america will dominate, but by 2030 Asia-Pacific will be the leader.
RPK growth forecast 2036
Asia Pacific will have 17520 units of aircrafts vs. 10130 in North America
Why is air connectivity vital for modern economies?
Businesses can set up much more efficient global supply chains.
Biggest aircraft producers?
Boeing, Airbus, Bombardier, Embraer
Why is the USA still the largest market?
large distances and big centrers
Why do we see a strong growth in Asia?
economic boom and population growth
What was the Chicago convention?
1944, established a legal framework and international rules for regulating international civil aviation and air transportation. –> establish the International Civil Aviation Organisation (ICAO)
1944: which International Air Service Transit Agreement were set up?
- Freedom 1 and 2 ensures non commercial air transport based on Chicago convention
- 5 freedoms agreement exists but not generally ratified (needs bilateral agreement)
- EU incl. CH: freedoms 1-7 are ratified (Switzerland only accepts the first 4)
Which are the freedoms which are normally bilateral agreed?
Freedom 1 - 4
How is a parallel codeshare defined?
One flight from one destination to another with different flight numbers
What is complementary codeshare?
Feeder Codesharing: feeding passenger to a hub with your own flight number
Connection Codesharing: different main flights of airlines get connected
What’s one-way codesharing?
Only one participating ariline offers flights with other codings but the second one does not
What’s Two-Way Codesharing?
both airlines offert their routes with the additional coding of the partner airline
Advantages of Codesharing
Extension of the route network, higher profitability, more attractive product, smaller airline benefit from the brand and image of bigger airlines
Disadvantages of Codesharing
Higher effort in coordination, implications on the capacity due to changes in flight schedule, loss of control over quality
Is Brexit a problem for EasyJet?
Is a point to point: can’t fly between two EU countries –> they switched to Vienna for their hub so they can continue flying within Europe
In what development step are we in 2005+?
Consolidation phase, seamless customer care, paperless ticketing, new quality in top classes, new pricing schemes
General drivers
Income drives passenger demand, income depends on economic growth, low airline ticket prices
What are the three interconnected drivers of passenger demand?
Economic growth, perspective leisure tourism and perspective international business tourism
How many new airplanes 2017 - 2036?
41’000 for 6.1 trillion US$
What is the difference between push and pull drivers?
Push = novel experience, escape, fun seeking, relax
Pull = natural environment, cleanliness, easy-to-access, outdoor activities, low ticket prices
What drives the air transport DEVELOPMENT?
technical development + regulation + degree of economic growth
Which are the most important economies?
Economies of technologies
Economies of Scale
Economies of Scope
Economies of density
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