01 - Introduction to Aviation

Question 1

How would you basically describe the airline business in terms of EBIT per offered Seat Kilometer (ASK)

Answer 1

Very cyclic, one downturn every decade

Question 2

How has overall growth been of the industry?

Answer 2

Steadily growing, but the growth is not only real growth, as it has been pushed with central banks pushing the industry.

Question 3

What about the fuel prices in the recent years?

Answer 3

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%)

Question 4

Own or lease a plane?

Answer 4

An airline that owns is much less volatile than the leasing one, but of course it needs more liquidity to buy many airplanes.

Question 5

Profits in the recent years of commercial airlines?

Answer 5

Improvements of profits

Question 6

How did Delta Airliens revive the bankruptcy?

Answer 6

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

Question 7

What are the top 3 airliens in terms of Revenue Passenger-Kilometers (RPK)?

Answer 7

American, Delta and United

–> Emirates, China, Southwest, Lufthansa, British, Airfrance, Ryanair

Question 8

What are top 3 cargo airlines?

Answer 8

FedEx, Emirates, UPS

Question 9

What are the biggest airports in the world?

Answer 9

Atlanta, Beijing, Dubai, Los Angeles, Tokyo, Ohare Chicago, Heathrow, Hong-Kong, Shanghai, CdG

Question 10

What is the development of air traffic flows until 2030?

Answer 10

now, still north america will dominate, but by 2030 Asia-Pacific will be the leader.

Question 11

RPK growth forecast 2036

Answer 11

Asia Pacific will have 17520 units of aircrafts vs. 10130 in North America

Question 12

Why is air connectivity vital for modern economies?

Answer 12

Businesses can set up much more efficient global supply chains.

Question 13

Biggest aircraft producers?

Answer 13

Boeing, Airbus, Bombardier, Embraer

Question 14

Why is the USA still the largest market?

Answer 14

large distances and big centrers

Question 15

Why do we see a strong growth in Asia?

Answer 15

economic boom and population growth

Question 16

What was the Chicago convention?

Answer 16

1944, established a legal framework and international rules for regulating international civil aviation and air transportation. –> establish the International Civil Aviation Organisation (ICAO)

Question 17

1944: which International Air Service Transit Agreement were set up?

Answer 17

• 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)

Question 18

Which are the freedoms which are normally bilateral agreed?

Answer 18

Freedom 1 - 4

Question 19

How is a parallel codeshare defined?

Answer 19

One flight from one destination to another with different flight numbers

Question 20

What is complementary codeshare?

Answer 20

Feeder Codesharing: feeding passenger to a hub with your own flight number

Connection Codesharing: different main flights of airlines get connected

Question 21

What’s one-way codesharing?

Answer 21

Only one participating ariline offers flights with other codings but the second one does not

Question 22

What’s Two-Way Codesharing?

Answer 22

both airlines offert their routes with the additional coding of the partner airline

Question 23

Advantages of Codesharing

Answer 23

Extension of the route network, higher profitability, more attractive product, smaller airline benefit from the brand and image of bigger airlines

Question 24

Disadvantages of Codesharing

Answer 24

Higher effort in coordination, implications on the capacity due to changes in flight schedule, loss of control over quality

Question 25

Is Brexit a problem for EasyJet?

Answer 25

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

Question 26

In what development step are we in 2005+?

Answer 26

Consolidation phase, seamless customer care, paperless ticketing, new quality in top classes, new pricing schemes

Question 27

General drivers

Answer 27

Income drives passenger demand, income depends on economic growth, low airline ticket prices

Question 28

What are the three interconnected drivers of passenger demand?

Answer 28

Economic growth, perspective leisure tourism and perspective international business tourism

Question 29

How many new airplanes 2017 - 2036?

Answer 29

41’000 for 6.1 trillion US$

Question 30

What is the difference between push and pull drivers?

Answer 30

Push = novel experience, escape, fun seeking, relax

Pull = natural environment, cleanliness, easy-to-access, outdoor activities, low ticket prices

Question 31

What drives the air transport DEVELOPMENT?

Answer 31

technical development + regulation + degree of economic growth

Question 32

Which are the most important economies?

Answer 32

Economies of technologies
Economies of Scale
Economies of Scope
Economies of density

Question 33

Learn Aviation Systems Framework!

Answer 33

Learn!