Lecture 3 & 4 Flashcards
Name the 2 characteristics of a H&S network.
An airport (hub) is more important than all the others (spokes) and the hub is connected with all the spokes, the spokers are all connected indirectly via the hub. n-1.
Name the 2 characteristics of a P2P network.
An egalitarian system: no strong hierarchy between airports, all equal and every airport is connected to every airport. n(n-1)/2, ideal for shorter connections.
In terms of market, H&S networks are driven by:
transfers, long-haul connection and development of a global (multi-hub) network via partners.
In terms of regulations, H&S networks are driven by:
bilateral agreements, open-skies agreements and controlled slots.
In terms of operational performance, H&S networks are driven by:
aircraft utilaization, seat balancing and network expansion.
What is the future of Large network carriers?
focus on long-haul flights, reduce short-haul flight unless increase use of partners to feed their hubs or code-share and/or receive feed from LCCs.
What is the future of midsize network carriers?
Focus mainly smaller niche markets, increase their bond with larger airlines to increase overal connectivity, might struggle against LCCs.
What is the future of LCCs?
Should be dominating short haul market via increased consolidation and potential agreements with large network carriers.
What are Non-Operating Costs?
Costs not directly associated with operating an aircraft, like: interest, gains/losses or property or equipment, etc.
What are Direct Operating Costs?
Costs that are directly related to the type of aircraft used and would change with a different aircraft type, like: flight operation costs, maintenance, aircraft depreciation(depreciation is sometimes indirect)
What are flight operations costs?
Everything from crew to rental, to fuel cost
What are Indirect Operating Costs?
Costs that are not dependent on the type of aircraft being used, like: station and ground expenses, passenger services, ticketing, sales, promotion, general and administration
What are fixed direct operating costs?
DOC which in the short run do not vary with particular flight or even a series of flights, such as annual depreciation of lease charges.
What are variable direct operating costs?
those costs which wold be avoided if a flight or a series of flights would be canceled, such as fuel, flight crew overtime, landing charges, etc.
Cost-based pricing
No consumer of air services should be charged more than the cost of providing those services. Avoid cross-subsidizing passengers.
