8 Introduction in the aviation system Flashcards
Size and structure of the aviation industry
- the airline business is very cyclic. every decade there is one downturn
- if an airline does not flight they loose huge quality of money
- there are a lot of impacts that this industry has to adapt (wars, deseases)
- Oil crisis of 2008 save the airlines
- after 2013 up and down
- world airlines do not make money (a bit in lose a bit in profits)
Biggest airline in the world for passengers carried
- Delta air lines
- southwerst arilines
- china southern arilines
- united airlines
- american airlines
- ryanair
- lufthansa
biggest airline for freight tonne - kilimenters
- FedEx
- USP airline
- emirates
- cathay pacific airways
- Korean air lines
- lufthansa
Top higher gorups renevues 2013
- American airlines group
- lufthansa group
- united-continental holdings
- delta air lines
- Air france-KLM group
Biggest airport in the world - passengers
- Atlanta
- beijing
- london
- tokyo
- chicago
- LA
- dubai
- paris
air traffic growth forecast 2010- 2030
Air pacific is going to tiple (is going to be an huge market)
within China 3x
within europe 2x
improtance of air connectivity
you cannot have everything produced in all the places
e-g. computer you need peeces from all over the world
Medium tern cargo growth (next 5 years)
within asia pacific and between A&P and Eurore is going to growth fast
Facts and figures
Strongest growth in Asia (economic book and population growth Total commercial airline revenues: 680 Mrd. USD
Total 58 Mio employees
History: Europe between 1989 and 2004
Flow of traffic 1989 and 2004 increase dramatically in Europe
History: main development steps of commercial aviation
1918-1929
step/stage: Pioneer stage
technology: WWI, double deckers and related types, only summer flights, weather dependency
economy: stagnation
Regulation: national
Business model: Every airport of even route one airline. Mail and single passenger transport
History: main development steps of commercial aviation
1929-1939
Step/stage: bilateral flights ”the technical stage”
Technology: First full metal, al weather multi engine “big airplanes” first real airports (tempelhof)
Economy: Pre-war growth
Regulation: bilateral (flight over border)
Business model: national or regional airlines deserving “stop and go routes
History: main development steps of commercial aviation
1945-1971
step/stage: internationalization “the political stage”
technology: long haul airplanes, with pressurized cabins- and Turboprop or Jet engines
Economy: Continuous, rapid growth
Regulation: International (Chicago, treaty & freedom) internal traffic rights governed by national politics
Business model: national flag-carriers increasing continental and intercontinental networks. Intercontinental routes and continental “Raster-Netze”
History: main development steps of commercial aviation
1970-1990
step/stage: increasing competition “price and quality” stage
Technology: wide body airplanes extra long haul flights
Economy: Growth
Regulation: Price deregulation (weakening of cartels)
Business model: national hub and spoke Networks. International routes, New pricing schemes. Charter airlines
History: main development steps of commercial aviation
1990-2005
step/stage: deregulation
Technology: computer sales and network management
Economy: cycles
Regulation: deregulation, open sky
Business model: continental hubs. Airline alliance. Low cost airlines or anti network model.
History: main development steps of commercial aviation
2005+
step/stage: consolidation
technology: seamless customer case. Paperless ticketing. New quality in top classes. New pricing schemes
Economy: cycles
Regulation: antitrust. Immunity for mergers
Business model: Mega airlines. Niche carriers. Low cost. In tour-operator integrated charter airlines
main drivers and economies
in general income drives passenger demand
- income depends on economic growth
- increased income or increased income expectation
- low prices of airline tickets
=demand of air trave increases
GDP and air traffic are strongly connected
Aviation as an engine for the economy
Direct: airlines and airports employees
indirect: suppliers
induced: multiplier effects, spending of salary generated by direct and indirect effect
Catalytic effects: tourist that arrive by air in CH and spend loads of money (income generated by catalytic effects of the Aviation industry)
Drivers of passenger demand
Economic growth
- GDP growth
- income growth
–> Perpective leisure tourism
–> perspetive international Business tourism
Important facts for the future
Emergin middle class in developing counties
saving rates in asia are 2-3 times that of western markets
increase of “most attractive” demographic group
New airplanes delivery 2011-2030
AP 11500
Europe 7500
North Amercia 7500
LA 2500
ME 2500
Why are devoloping coutnry an enormous demand drivers?
- Large popoulation size
- large distances
- urbanization and emergence of large middle class
- high savign rates
- high economic growth
Why are devoloping coutnry an enormous demand drivers?
Example india
Today: Air travel demanded by 3% (36mill. people) of population !
2020: Air travel demanded by 6% (72mill.people) of population !
Drivers of international business air travel
Global company setups
Network building
Service business
Knowledge exchange (knowledge society)
Personal interaction
Customer value
Drivers of international leisure air travel
- deregulation - enabler of competition
- low cost carriers - new markets - low prices
Drivers of international leisure air travel: push - pull drivers
Push drivers
- Novel experience
- escape
- knowledge seeking
- fun & excitement
- rest & relaxation
- family friends together
- meet cultures
Pull drivers
- natural & historic environment
- cleanliness & safety
- easy-to-access & economical deal
- outdoor activities
- sunny & exotic atmosphere
- low ticket prices
- recreation / sports
driver of air transport development in general
Regulation
technical de elopment
degree of economic growth of the internationalization of an economy
everything is interconnected
Most important economices
Economics of technology:
- newer planes do have lower CASK’s
- Smaller planes are able to fly longer distances.
Economics of scale:
- bigger planes have lower CASK’s
- Bigger airports are cheaper per PAX
Economies of scope:
- bigger companies provide more OD’s with comparability few legs
Economics of density
- airlines dominating a hub show comparably higher market shares
CASK
CASK: Cost of available Seat-km
RASK
RASK: Revenues per available seat km
ASK
ASK: available seat km
RPK
RPK: Revenues passenger Km
SLF
SLF: Seat load factor (high SLF not mean that you are successful)
Aviation system
arline key figures
