AVE3103 Final Exam Final Exam Preparation 6 questions. Answer 4 minimum 15 points each; total 60 points Date: 27 th October 2010 Wednesday Time: 9.00am.

AVE3103 Final Exam Final Exam Preparation 6 questions. Answer 4 minimum 15 points each; total 60 points Date: 27 th October 2010 Wednesday Time: 9.00am – 1200pm Duration: 3 Hours

Lesson 1: Intro AVE 4Q 1-4 Topic Analysis Lesson 2: Airline Demands 3Q 5-7 Lesson 3: Passenger Movement & Marketing 3Q 8-10 Lesson 4: Passenger marketing & Airline Costs 7Q 11-17 Lesson 5: FBO 4 Q 18-21 Lesson 6: MRO 4Q 22-25 Lesson 7 - Airline Route Planning 5Q 26-30 Total Question Bank: 30 Questions

Introduction to Aviation Economics Lesson 1 4 questions Q1-Q4

Question 1 The market structure of airline industry has undergone important changes that construct a dynamic economic model structure. a)Describe what do you understand about the general characteristics of oligopolies and prove that aviation industry is oligopolistic. (9 marks) b) Name three other possible oligopolistic industries. State your reason. (3 marks) c) From your opinion why competition in aviation industry has been has been substantially increasing in Malaysian market? (3 marks)

However, other economic characteristic : The Airlines as an Oligopolists? However, other economic characteristic : The Airlines as an Oligopolists? We have discussed earlier on characteristics of oligopolistic industryWe have discussed earlier on characteristics of oligopolistic industry Apparently the airline industry also share some of the oligopolistic features:Apparently the airline industry also share some of the oligopolistic features: –Small Number of carriers and market share –High barriers of entry –Economies of scale –Growth through merger –Mutual Dependence –Price rigidity and non-price competition

Introduction to Airline industry In domestic and international competitive market, aviation economic should be well managed with the existence of LCC airline companies. To compete with the LCCs, aviation fraternity should understand the concept of aviation economics characteristics and strategies.To compete with the LCCs, aviation fraternity should understand the concept of aviation economics characteristics and strategies.

Question 2 The aviation industry faced one of the biggest development in the new era, riding on the wave of the new economy and a greater demand for travel. a)Explain in your own word the airlines special economic characteristics. (8 marks) b) Discuss the concept of price rigidity and non-price competition in aviation industry. Provide example to support your answer. (4 marks) c) From your observation, why food and education industries are not badly impact as aviation industry to economic downturn. (3 marks)

The Airlines Special Economic Characteristics: The Airlines Special Economic Characteristics: Government Financial AssistanceGovernment Financial Assistance High Technological TurnoverHigh Technological Turnover High Labor and Fuel ExpensesHigh Labor and Fuel Expenses Sensitivity to Economic FluctuationsSensitivity to Economic Fluctuations Close Government RegulationClose Government Regulation

Price Rigidity and Nonprice Competition Airline industry also oligopolistic in its priceAirline industry also oligopolistic in its price Airliners are much comfortable maintaining constant price rather than rocking the boat, so to speak…Airliners are much comfortable maintaining constant price rather than rocking the boat, so to speak… Why?Why? –Mutual Dependence –Fear of Price War Oligopolistic pricing has become the norms in airline industryOligopolistic pricing has become the norms in airline industry

Introduction to Airline industry Air travel remains a large and growing industry.Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries.It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. Travel for both business and leisure purposes grew strongly worldwideTravel for both business and leisure purposes grew strongly worldwide

Question 3 Airlines can independently make profits in each areas of aviation economic activities which deals with profit making and lowering costs in aviation activities. a)Explain in your own word the airlines profitable economic activities.(9 marks) b) What are the two major operating expenses in airline industry and why are they so high? (3 marks) c) In your own words, which aviation economic activities could obtain the highest gross profit and state your reasons. (3 marks)

The Airlines Special Economic Characteristics: The Airlines Special Economic Characteristics: Government Financial AssistanceGovernment Financial Assistance High Technological TurnoverHigh Technological Turnover High Labor and Fuel ExpensesHigh Labor and Fuel Expenses Sensitivity to Economic FluctuationsSensitivity to Economic Fluctuations Close Government RegulationClose Government Regulation

Question 4 In the aviation industry various factors such as authorities, airports, airlines and passengers combine to determine the affect the airline strategy and business organization. a)Explain in your own word the reason for the small number of certificated airliners.(5 marks) b) Define economies of scale, and discuss how they relate to the airline industry. (5 marks) c) In your own words, discuss the types of aircraft leasing. Which types of aircraft leasing would you prefer and state your reason. (5 marks)

High Barriers of Entry In recent years, it is difficult to get access to many markets due toIn recent years, it is difficult to get access to many markets due to –Difficulty to obtain terminal space at many hub airports –The financial outlays risk (i.e., advertising, personnel and aircraft operation cost) compete with the airline at its hub –Airport terminal capacity (i.e. Air Asia competing with M’sia Airlines at KLIA)

So, it is difficult to enter the airline industry and it is even harder during the start-up stage as the major airlines dominated the power to buy in the marketSo, it is difficult to enter the airline industry and it is even harder during the start-up stage as the major airlines dominated the power to buy in the market This phenomenon match with the second criterion of oligopolistic firmsThis phenomenon match with the second criterion of oligopolistic firms High Barriers of Entry

Defunct airlines High Barriers of Entry AIRLINEIATAICAOCALLSIGN COMMENCED OPERATIONS CEASED OPERATIONS Borneo Airways FlyAsianXpressD7August 1, 2006 September 30,2007 Ked-AirJanuary 20, 20042006 Malaysia-Singapore AirlinesMHMASMALAYSIAN19661972 Pelangi AirPGPEG PELANGI AIRWAYS 19892001 Saeaga AirlinesSGSGGSAEAGA19951998

Other characteristics of oligopolistic industry Substantial economic scale: Increase of size in operations leads to decrease of firm’s costs in a long termSubstantial economic scale: Increase of size in operations leads to decrease of firm’s costs in a long term –Large scale of production afforded by intensive labor and management specialization of job responsibilities, technological and products utility efficiency make possible of low costs –So, if market demand only sufficient to support few large firms of optimum size, only few such firms will survive –It’d be hard for new and small firms to compete with these large firms

The industry has two main leasing types, wet leasing which is normally used for short term leasing and dry leasing which is more normal for the longer term leases.The industry has two main leasing types, wet leasing which is normally used for short term leasing and dry leasing which is more normal for the longer term leases. The industry also uses combinations of wet and dry when for example the aircraft is wet-leased to establish new services then as the airlines flight or cabin crews become trained they can be switched to a dry lease.The industry also uses combinations of wet and dry when for example the aircraft is wet-leased to establish new services then as the airlines flight or cabin crews become trained they can be switched to a dry lease. PART 4: Fleet Planning; Aircraft lease and Purchase

The Demand for Airline Service Lesson 2 3 questions Q5-Q7

Question 1 In the airline industry, there exist standard measures of passenger traffic and airline output, which are also combined to generate several common measures of airline performance. a)Describe what do you understand about the demand characteristics of airline service. (3 marks) b) Discuss in your own words the definition and purpose of forecasting. (8 marks) c) Define the judgmental forecasting method. From your opinion, what is the best source to ensure usefulness information such as advertisement for this method. (4 marks)

What is the demands for airline service? Unlike other industry, here is some demand characteristics of airline service- Not unique rather unusualUnlike other industry, here is some demand characteristics of airline service- Not unique rather unusual Economists call it “intermediate good”- People use air transportation to achieve some other purpose not for the sake of flying: Passenger DemandEconomists call it “intermediate good”- People use air transportation to achieve some other purpose not for the sake of flying: Passenger Demand So, in passenger demand its important to examine its all aspects:So, in passenger demand its important to examine its all aspects: –Tourist/ business? –Personal / family emergency travel

Forecasting Why is it important?Why is it important? “Business action taken today must be based on yesterday’s plan and tomorrow's expectations” -“Business action taken today must be based on yesterday’s plan and tomorrow's expectations” - J. G. Wensveen 2007 Forecasting: The attempt to quantify demand in a future time periodForecasting: The attempt to quantify demand in a future time period What do you quantify?What do you quantify? –Revenue-dollars –Revenue-passengers: Revenue Passenger Miles (RPM) a.k.a Passenger enplanements

The purpose of forecasting Each type of forecasts serves a particular purposeEach type of forecasts serves a particular purpose So, either short-term, medium-term and long term forecastSo, either short-term, medium-term and long term forecast To carry out 3 important management functionsTo carry out 3 important management functions –APC AnalysisAnalysis PlanningPlanning ControlControl

Analysis Every airliners must make choices among the many markets or submarkets open to itEvery airliners must make choices among the many markets or submarkets open to it Plus… deciding onPlus… deciding on –Level of service to offer –The type of aircraft to fly on particular route –So, in the end…they have to decide the type of aircraft they have to purchase/ lease –Along…with its costs

Analysis Analysis airline data:Analysis airline data: Age RangeNumber of pilot 20-248 25-2925 30-3430 35-3942 40-4418 45-4910 DonationNumber of collections RM 125 RM 250 RM 575 RM 1050 RM 1537 RM 2013 RM 5010 RM 1008

Planning Every airline firms must make short-term AND long-term decision onEvery airline firms must make short-term AND long-term decision on Instance of short-term’s decisionInstance of short-term’s decision –Allocation and scheduling of all limited resources THAT DEMANDING for competing uses Instance of long-term’s decisionInstance of long-term’s decision –Rates of expansion of capital equipment and fund

Planning Planning airline data:Planning airline data:

Control The need of airliner to know its own control in the marketThe need of airliner to know its own control in the market To determine how does the airliner’s actual performance: REVENUETo determine how does the airliner’s actual performance: REVENUE For example, a CEO/ President of an airliner is dissatisfied with the delay in flight scheduling, thus, need to determineFor example, a CEO/ President of an airliner is dissatisfied with the delay in flight scheduling, thus, need to determine

Control Control airline data:Control airline data: MonthFlight Delayed Jan5 Feb15 Mar10 Apr20 May18 Jun25 Jul30 Aug35 YearBaggage Lost 2000200 2001150 2002210 200380 200468 200551 200640 200735

Judgmental methods Definition: Educated guess based on intuition and subjective evaluationsDefinition: Educated guess based on intuition and subjective evaluations Least rigorous powerful for decision makingLeast rigorous powerful for decision making 3 sources of Judgmental methods:3 sources of Judgmental methods: –Expert Opinion –Sales Force Opinion –Poll Forecasts Its usefulness depends on contextual needsIts usefulness depends on contextual needs

Question 2 Accurate forecasts are crucial to a revenue management system especially for airline revenue that could lead to adequate inventory controls and optimal revenue performance. a)Brief in your own words the three type of forecasting and provide examples to support your answer. (6 marks) b) Briefly explain in your own words the causal method for forecasting and provide a simple example aviation industry to support your answer. (4 marks) c) Let say you are required to forecast the number of aircraft needed for the LIMA expedition in Langkawi urgently, discuss which type of forecasting method would you opt to use. (4 marks)

Why forecasting is important in airline business? Each type of forecast serves a particular purposeEach type of forecast serves a particular purpose Like…Like… –Short-term forecast –Medium-term forecasts –Long-term forecasts The types of forecasting

Short-term Forecast A total of passenger enplanements between a particular pair of cities to provide a basis for determining:A total of passenger enplanements between a particular pair of cities to provide a basis for determining: –Station personnel –Ground equipment needed –Gate availability –Ground handling recruitment –Weather/ temperature forecasting –Aircraft inspection, minor maintenance –Aircrew/ Customer parking facilities Normally done for 1month to 1 year period and cover day-to-day expensesNormally done for 1month to 1 year period and cover day-to-day expenses

Medium-term forecasts Generally for a period of 1-5 years and it involves things such as:Generally for a period of 1-5 years and it involves things such as: - Route-planning - Aircraft maintenance / spare-parts - Fuel pegging - Accident Awareness - Aircrew/Employee welfare Scheme 35

Long-term forecasts For a period of 5 to 10 yearsFor a period of 5 to 10 years It involves:It involves: –Fleet planning decisions –Goals, trademarks, promotions, publicity –Airport Management –Long-term financial commitments, e.g.. –“Aircraft-manufacturer might make a long- term forecast of demand for an aircraft specifically designed to serve the passengers of airliners’ market so that they could make a plan to meet the projected demand”

Therefore, DV (s) can be forecasts that might include..Therefore, DV (s) can be forecasts that might include.. –RPM: Revenue Passenger Per Mile –Passenger Revenue For example, in aviation sector, aircraft purchases correlates with profits in the economyFor example, in aviation sector, aircraft purchases correlates with profits in the economy Aircraft purchases is only one of the IV but via sophisticated causal method it could determine up to 20-30 IVsAircraft purchases is only one of the IV but via sophisticated causal method it could determine up to 20-30 IVs Causal method

The formula is…The formula is… Linearity: Linear correlationLinearity: Linear correlation That is how IV and DV correlated in one linear line:That is how IV and DV correlated in one linear line: –Y= mX + c OR –Y=a+bX Causal method

Question 3 The forecast of the air transport demand has a great influence on the development of airport master plans, which include runways, taxiways, boarding/landing area, waiting rooms, etc. a)Briefly explain in your own words the forecasting methods in aviation industry. From your opinion, which is the best method and state your reasons. (8 marks) b) State the 2 demands in airline industry and discuss what type of forecasting suit to quantify those demands (4 marks) c) Analysis is one the purpose of forecasting, from you opinion, what kind of aviation data would a management analyses to increase the passenger revenue. (3 marks)

Forecasting methods Causal methodCausal method Time Series (a.k.a Trend Analysis) methodTime Series (a.k.a Trend Analysis) method Judgmental methodJudgmental method

Short-term Forecast A total of passenger enplanements between a particular pair of cities to provide a basis for determining:A total of passenger enplanements between a particular pair of cities to provide a basis for determining: –Station personnel –Ground equipment needed –Gate availability –Ground handling recruitment –Weather/ temperature forecasting –Aircraft inspection, minor maintenance –Aircrew/ Customer parking facilities Normally done for 1month to 1 year period and cover day-to-day expensesNormally done for 1month to 1 year period and cover day-to-day expenses

Medium-term forecasts Generally for a period of 1-5 years and it involves things such as:Generally for a period of 1-5 years and it involves things such as: - Route-planning - Aircraft maintenance / spare-parts - Fuel pegging - Accident Awareness - Aircrew/Employee welfare Scheme 42

Long-term forecasts For a period of 5 to 10 yearsFor a period of 5 to 10 years It involves:It involves: –Fleet planning decisions –Goals, trademarks, promotions, publicity –Airport Management –Long-term financial commitments, e.g.. –“Aircraft-manufacturer might make a long- term forecast of demand for an aircraft specifically designed to serve the passengers of airliners’ market so that they could make a plan to meet the projected demand”

Analysis Every airliners must make choices among the many markets or submarkets open to itEvery airliners must make choices among the many markets or submarkets open to it Plus… deciding onPlus… deciding on –Level of service to offer –The type of aircraft to fly on particular route –So, in the end…they have to decide the type of aircraft they have to purchase/ lease –Along…with its costs

Analysis Analysis airline data:Analysis airline data: Age RangeNumber of pilot 20-248 25-2925 30-3430 35-3942 40-4418 45-4910 DonationNumber of collections RM 125 RM 250 RM 575 RM 1050 RM 1537 RM 2013 RM 5010 RM 1008

PASSENGER MOVEMENT Lesson 3 3 questions Q8-Q10

Question 1 The significant of passenger movement in aviation industry is very essential to maximize profits and ticket pricing strategies. a)Describe in your own words the significance of passenger load factors.(6 marks) b) Discuss in your own words the reason load factor has a critical impact on the cost and quality of air transportation (4 marks) c) If your airline has to provide positioning flights due to rush- hour demand, discuss how can you gain profit and minimize cost based on your capacity vs. demand? (5 marks)

Load Factor One of the most vital statistics in the airline businessOne of the most vital statistics in the airline business One of measure of equipment utilization- Revenue Passenger Load Factor (RPM- Load Factor)One of measure of equipment utilization- Revenue Passenger Load Factor (RPM- Load Factor) Figures of RPM expresses the relationship betweenFigures of RPM expresses the relationship between –Available seats-miles AND –RPM realized

It has a critical impact on the cost and quality of air transportation-Why?It has a critical impact on the cost and quality of air transportation-Why? –65% of airline’s costs are directly related to the operation of the aircraft and are independent of the number of passengers on the aircraft. Hence, a high load factor will allow the allocation of these costs over a large number of passengersHence, a high load factor will allow the allocation of these costs over a large number of passengers Load Factor

In the end, resulting in lower costs per passenger, which allows for lower fares (i.e. lower ticket price)In the end, resulting in lower costs per passenger, which allows for lower fares (i.e. lower ticket price) Companies can determine a minimum load factor they need to meet in order to break even financially.Companies can determine a minimum load factor they need to meet in order to break even financially. That is, once a company meets a certain load factor the revenues from doing so will cover the costs of providing their seat capacity.That is, once a company meets a certain load factor the revenues from doing so will cover the costs of providing their seat capacity. If they are below this break-even load factor the company will be spending more than they are earning and will lose money. If they are below this break-even load factor the company will be spending more than they are earning and will lose money. Load Factor

Load Factor calculation:Load Factor calculation: Simple calculation : Capacity 100, passenger 90 Simple calculation : Capacity 100, passenger 90 Load factor : 90/100 = 90% Airliner calculation : The definition of load factor isn't necessarily tied to seats alone. We must also consider the distance flown in order to measure the production of the airline. ASK = No. of seats/aircraft * No. of aircraft * aggregate distance flown RSK = Total Number of Passengers * Distance aggregate distance flown RSK = Total Number of Passengers * Distance Flown Flown Load Factor

Load Factor calculation, Airliner calculation : Route: - ABC -> XYZ Distance = 200km Aircraft = 2 Seats / Aircraft = 50 Total Services per day = 8 Available seat kilometers = 200 * 2 * 50 * 8 = 160000 km Assume on day 1 there were a total of 560 passengers travelling. Revenue Seat Kilometers = 560 * 200 = 112000 km Load Factor = 112000/160000 = 0.7 or 70%Load Factor calculation, Airliner calculation : Route: - ABC -> XYZ Distance = 200km Aircraft = 2 Seats / Aircraft = 50 Total Services per day = 8 Available seat kilometers = 200 * 2 * 50 * 8 = 160000 km Assume on day 1 there were a total of 560 passengers travelling. Revenue Seat Kilometers = 560 * 200 = 112000 km Load Factor = 112000/160000 = 0.7 or 70% In reality an airline will then do this equation for each route to determine the route load factor to help in route planning. The figures quoted in public are generally relating to the aggregate sums so it would represent total revenue seat kilometers / total available seat kilometers. Load Factor

But sometimes, airline has to provide positioning flights to cater the load for peak hoursBut sometimes, airline has to provide positioning flights to cater the load for peak hours Positioning flights: Aircraft has to flown virtually empty from one city to another late at night or early in the morning to have the plane ready to meet rush-hour demand.Positioning flights: Aircraft has to flown virtually empty from one city to another late at night or early in the morning to have the plane ready to meet rush-hour demand. Traffic Peaks and Valleys

Question 2 The idea is all transportation modes must operate during the traffic peaks and valleys in order to meet the public demand. a)Describe in your own words the significance of positioning flight.(5 marks) b) Discuss in your own words how to optimize profit during travel peak and valley. (5 marks) c) Why do you think it is difficult to prepare and offer the proper aircraft and correct flight capacity to the passengers? (5 marks)

But sometimes, airline has to provide positioning flights to cater the load for peak hoursBut sometimes, airline has to provide positioning flights to cater the load for peak hours Positioning flights: Aircraft has to flown virtually empty from one city to another late at night or early in the morning to have the plane ready to meet rush-hour demand.Positioning flights: Aircraft has to flown virtually empty from one city to another late at night or early in the morning to have the plane ready to meet rush-hour demand. Traffic Peaks and Valleys

The idea is all transportation modes must operate during the traffic peaks and valleys in order to meet the public needThe idea is all transportation modes must operate during the traffic peaks and valleys in order to meet the public need Airline load factors are seasonalAirline load factors are seasonal Daily and hourly load factors fluctuate even moreDaily and hourly load factors fluctuate even more Thus, airliner must make sure thereThus, airliner must make sure there are sufficient flights during peak are sufficient flights during peak hours hours

What is the demands for airline service? Unlike other industry, here is some demand characteristics of airline service- Not unique rather unusualUnlike other industry, here is some demand characteristics of airline service- Not unique rather unusual Economists call it “intermediate good”- People use air transportation to achieve some other purpose not for the sake of flying: Passenger DemandEconomists call it “intermediate good”- People use air transportation to achieve some other purpose not for the sake of flying: Passenger Demand So, in passenger demand its important to examine its all aspects:So, in passenger demand its important to examine its all aspects: –Tourist/ business? –Personal / family emergency travel

Question 3 Airline pricing is a complex, unpredictable factor driven by three competition, demand, and inventory that involve timing and demand. a)Describe in your own words the significance of load factor in relation to airline pricing.(5 marks) b) Describe your understanding on how airlines set their prices in the first place. (5 marks) c) From your opinion, how is the best way to obtain a cheap plane ticket? (5 marks)

Load Factor One of the most vital statistics in the airline businessOne of the most vital statistics in the airline business One of measure of equipment utilization- Revenue Passenger Load Factor (RPM- Load Factor)One of measure of equipment utilization- Revenue Passenger Load Factor (RPM- Load Factor) Figures of RPM expresses the relationship betweenFigures of RPM expresses the relationship between –Available seats-miles AND –RPM realized

In the end, resulting in lower costs per passenger, which allows for lower fares (i.e. lower ticket price)In the end, resulting in lower costs per passenger, which allows for lower fares (i.e. lower ticket price) Companies can determine a minimum load factor they need to meet in order to break even financially.Companies can determine a minimum load factor they need to meet in order to break even financially. That is, once a company meets a certain load factor the revenues from doing so will cover the costs of providing their seat capacity.That is, once a company meets a certain load factor the revenues from doing so will cover the costs of providing their seat capacity. If they are below this break-even load factor the company will be spending more than they are earning and will lose money. If they are below this break-even load factor the company will be spending more than they are earning and will lose money. Load Factor

Load Factor calculation:Load Factor calculation: Simple calculation : Capacity 100, passenger 90 Simple calculation : Capacity 100, passenger 90 Load factor : 90/100 = 90% Airliner calculation : The definition of load factor isn't necessarily tied to seats alone. We must also consider the distance flown in order to measure the production of the airline. ASK = No. of seats/aircraft * No. of aircraft * aggregate distance flown RSK = Total Number of Passengers * Distance aggregate distance flown RSK = Total Number of Passengers * Distance Flown Flown Load Factor

Load Factor calculation, Airliner calculation : Route: - ABC -> XYZ Distance = 200km Aircraft = 2 Seats / Aircraft = 50 Total Services per day = 8 Available seat kilometers = 200 * 2 * 50 * 8 = 160000 km Assume on day 1 there were a total of 560 passengers travelling. Revenue Seat Kilometers = 560 * 200 = 112000 km Load Factor = 112000/160000 = 0.7 or 70%Load Factor calculation, Airliner calculation : Route: - ABC -> XYZ Distance = 200km Aircraft = 2 Seats / Aircraft = 50 Total Services per day = 8 Available seat kilometers = 200 * 2 * 50 * 8 = 160000 km Assume on day 1 there were a total of 560 passengers travelling. Revenue Seat Kilometers = 560 * 200 = 112000 km Load Factor = 112000/160000 = 0.7 or 70% In reality an airline will then do this equation for each route to determine the route load factor to help in route planning. The figures quoted in public are generally relating to the aggregate sums so it would represent total revenue seat kilometers / total available seat kilometers. Load Factor

Passenger Marketing & Airline Costs Lesson 4 7 questions Q11-Q17

Question 1 Passenger marketing is one of the most important activities in air transportation which include a broad are of business activity that directs the flow of services provided by the carrier to the customer. a)Briefly explain in your own words the concept of airline marketing approach.(6 marks) b) Discuss the difference between shotgun approach and riffle approach. State examples for each approaches. (5 marks) c) From your opinion, which is the best concept of airline marketing approach would you adopt for your airline company and state your reasons. (4 marks)

–Passenger and cargo representatives –Pricing and market research analysts The concept of Airline Marketing approachThe concept of Airline Marketing approach –Production-oriented approach –Sales-oriented approach –Consumer-oriented approach Passenger Marketing

Production-oriented approach The era where emphasis was given on carriage/airline then passenger-why?The era where emphasis was given on carriage/airline then passenger-why? A time when services were so scarce that customers accepted whatever was availableA time when services were so scarce that customers accepted whatever was available People still do not have confidence on the air carrierPeople still do not have confidence on the air carrier But, as time flies, the airline begin to realize the importance to gain passenger confidence on its services and productsBut, as time flies, the airline begin to realize the importance to gain passenger confidence on its services and products

Sales-oriented approach As airline’s capacity increase, much more efforts were put to convince the consumersAs airline’s capacity increase, much more efforts were put to convince the consumers The strategy was produced services that reflected the operations and selling talents of the airline, not the needs of the publicThe strategy was produced services that reflected the operations and selling talents of the airline, not the needs of the public It was basically a shotgun approach: Convincing people to fly rather than drive or take the railroadIt was basically a shotgun approach: Convincing people to fly rather than drive or take the railroad

Consumer-oriented approach Centered to satisfy the consumers (the passengers)Centered to satisfy the consumers (the passengers) Moved from shotgun approach to target market approach (riffle approach)Moved from shotgun approach to target market approach (riffle approach) More surveys and tests were carried out to find out what the consumers really wantMore surveys and tests were carried out to find out what the consumers really want The aim is to identify specific group of customers to appeal with its servicesThe aim is to identify specific group of customers to appeal with its services

Then, the airline may opt to strategize the kind and amount of activities necessary to reach the target market- How?Then, the airline may opt to strategize the kind and amount of activities necessary to reach the target market- How? Consumer-oriented approach

Question 2 Effective airline marketing depends upon effective marketing system employed by an airliner that carried out in a variety of contexts. Marketing strategies include a wide variety of techniques aimed to deliver customer satisfaction and safety. a)Describe how can you strategies your techniques in aviation industry using the controllable marketing mix factors.(8 marks) b) Discuss in your own words the uncontrollable factors in airline marketing mix and provide example to support your answer. (4 marks) c) From your opinion, what are the essential information you required from your passenger for effective marketing? (3 marks)

There are also uncontrollable factors such as:There are also uncontrollable factors such as: –Cultural and social differences Differences in values and traditions among customers like eating habit and food preferencesDifferences in values and traditions among customers like eating habit and food preferences –Political and regulatory environment Constant change of political climate may affect airline marketing strategy (i.e, gov. tax, landing quotas at certain airports)Constant change of political climate may affect airline marketing strategy (i.e, gov. tax, landing quotas at certain airports) The marketing mix

–Economic environment Recession would affect airline marketing operationRecession would affect airline marketing operation –Existing competitive structure Numbers and types of competitors the marketing team must face in its target markets may vary considerablyNumbers and types of competitors the marketing team must face in its target markets may vary considerably – Resources and objectives of the company Marketing must develop a strategy consistent with the company’s goalMarketing must develop a strategy consistent with the company’s goal The marketing mix

Apparently, marketing team can do little or nothing about these uncontrollable factorsApparently, marketing team can do little or nothing about these uncontrollable factors But, these factor must be certainly recognized and responded to so as it could alter marketing strategyBut, these factor must be certainly recognized and responded to so as it could alter marketing strategy The marketing mix

Question 3 Excess capacity and a shortage of customers changed the marketing concept to a consumer-oriented approach which design services to meet changing customer requirements as they arose. a)Describe your understanding on airline market segmentation. (4 marks) b) Discuss in your own words the airline market penetrating strategies. (6 marks) c) From your opinion, how can you improve the airline services that could accommodate the passenger’s needs (5 marks)

Market Segmentation Def: The process of dividing potential customers for a service into meaningful groupsDef: The process of dividing potential customers for a service into meaningful groups That is, to identify your target marketThat is, to identify your target market Involves 3 steps:Involves 3 steps: –Finding relevant characteristics that categorize the customers into meaningful groups like trip purpose (business, pleasure, personal), traveler demographic characteristics (age, sex, occupation etc)

–Use these characteristics to identify all significant market segments and to relate them systematically to the services each segment might buy –Select target markets- collection of market segments most consistent with company’s objectives and capabilities. Market Segmentation

Penetrate existing target markets Done viaDone via –Promotional fares Provide promotional fare to leisure travelers who travel during off-peak and off-season periodProvide promotional fare to leisure travelers who travel during off-peak and off-season period An effective way to fill in empty seatsAn effective way to fill in empty seats –Varying the classes of service First class, business class, economy class, coach- fare, conditional reservation, jump-seat fareFirst class, business class, economy class, coach- fare, conditional reservation, jump-seat fare

Other market penetrating strategiesOther market penetrating strategies –Frequent-flier bonus awards mileage accumulated –Buy one ticket get one free certificates to selected cities –Weekenders clubs –Membership that provide exclusive notice of vacation packages –Upgrading of coach-fare passengers to first class for a small charge Penetrate existing target markets

Question 4 AMC airline is a new established Malaysian Airliner that plans for a new corporate image which deliver the best services in comparison to MAS and Airasia. a)Guide AMC airline the essential steps in intensive growth marketing strategies (9 marks) b) Briefly explain what do you understand about the consumer oriented marketing concept and how AMC airline could practise new strategies to utilize the concept. (3 marks) c) From your opinion, what is the best sustainable marketing strategies AMC airline could implement for continuous improvement and customer satisfaction. (3 marks)

Intensive Growth Strategies Involves three essential stepsInvolves three essential steps –Penetrate existing target markets –Increase product development –Develop new target markets

Penetrate existing target markets Done viaDone via –Promotional fares Provide promotional fare to leisure travelers who travel during off-peak and off-season periodProvide promotional fare to leisure travelers who travel during off-peak and off-season period An effective way to fill in empty seatsAn effective way to fill in empty seats –Varying the classes of service First class, business class, economy class, coach- fare, conditional reservation, jump-seat fareFirst class, business class, economy class, coach- fare, conditional reservation, jump-seat fare

Other market penetrating strategiesOther market penetrating strategies –Frequent-flier bonus awards mileage accumulated –Buy one ticket get one free certificates to selected cities –Weekenders clubs –Membership that provide exclusive notice of vacation packages –Upgrading of coach-fare passengers to first class for a small charge Penetrate existing target markets

Increase product development Provide products that could accommodate the passenger’s needsProvide products that could accommodate the passenger’s needs Greater emphasis on product improvementGreater emphasis on product improvement Some added services in airline:Some added services in airline: –In flight telephone and fax, with internet access –In flight reservations for hotel and car rentals –Comfortable seats with increased width and pitch –Gourmet meals and complimentary beverages

–Enhanced entertainment systems, direct TV, video games etc –Reading and writing materials –Larger lavatories with amenities –Impressive duty-free services –Special on ground service like lounges and meeting rooms for business travelers –Special baggage service * Some airline even shown the rerun of football game! Increase product development

Develop new target markets Def: Process of selling new products or services to new target groupsDef: Process of selling new products or services to new target groups Who are this these new target groups?Who are this these new target groups? Determine byDetermine by –Demographic segmentation Categorize by age, sex, race, nationality etcCategorize by age, sex, race, nationality etc –Psychographic segmentation Categorize by life-style and personality linesCategorize by life-style and personality lines So, NO MORE single market!So, NO MORE single market!

Question 5 During the pioneer days of airline development, the airfares were based on the responsiveness of demand for passenger service that would produce the maximum net return. a)Explain in your own words the trend in passenger airfares from 1929 and what was the primary reason for the changes in average air passengers fares. (9 marks) b) From the passenger airfares since 1929, how can you summarize the price trend and the determinants of the demand that you have already described. (3 marks) c) From your opinion, how is the price trend in 10 years time and elaborate your forecasting reasons (3 marks)

The trend in passenger airfares The trend of airfares illustrate the importance relationship between demand.The trend of airfares illustrate the importance relationship between demand. As they have been implemented over time, they illustrate the importance of the relationship economics, business, managerial judgment and governmental regulatory policy.As they have been implemented over time, they illustrate the importance of the relationship economics, business, managerial judgment and governmental regulatory policy. During the pioneer days of airline development, the airfares were based on the responsiveness of demand for passenger service combined with mail revenues, that would produce the maximum net return.During the pioneer days of airline development, the airfares were based on the responsiveness of demand for passenger service combined with mail revenues, that would produce the maximum net return.

The trend in passenger airfares

Historically the trend fluctuate, measured by RPMHistorically the trend fluctuate, measured by RPM From 1929-1941: Introduction of Pullman charges- It was downward trendFrom 1929-1941: Introduction of Pullman charges- It was downward trend 1942: Stable (post WW1) as federal transportation tax was introduced1942: Stable (post WW1) as federal transportation tax was introduced 1943: All discounts & fares were eliminated as WW2 took place- upward trend1943: All discounts & fares were eliminated as WW2 took place- upward trend Post WW2: Reduction of airfares and return of discountsPost WW2: Reduction of airfares and return of discounts

1950s: Increase as there are more passenger demand as well as demand for military airlift capacity1950s: Increase as there are more passenger demand as well as demand for military airlift capacity 1962-1968: Decline due to tremendous growth in airline traffic and productivity1962-1968: Decline due to tremendous growth in airline traffic and productivity 1970s: Doubled due to great increase in fuel prices1970s: Doubled due to great increase in fuel prices 1980s: Price decrease, people enjoy marvelous fares and discounts- Technology turnover1980s: Price decrease, people enjoy marvelous fares and discounts- Technology turnover The trend in passenger airfares

1990s to 2003: On average price decrease as competition increase between new-entrant low-cost carriers and increased competition between airliners1990s to 2003: On average price decrease as competition increase between new-entrant low-cost carriers and increased competition between airliners The trend in passenger airfares

Question 6 With airline tickets every person on a flight may have paid a different price to fly. The airlines have a seemingly secretive formula to constructing various types of passenger airfares. a)Explain in your own words the types of passenger airfares that can be implemented by airliners (8 marks) b) Briefly discuss your understanding on no-frills airfare (4 marks) c) From your opinion, what type of passenger airfares would you implement for your new established airliner and state your reason. (3 marks)

Pricing Process Involve several steps:Involve several steps: –Pricing strategies and objectives –Pricing tactics –Pricing analysis –Inventory Management

Pricing strategies Charges by airline services include:Charges by airline services include: –The predictable seasonal pattern of demand, especially leisure travel –The influence of override commissions that many airlines pay to travel agencies –The dynamic nature of airline schedules (the strong r/ship between schedule frequency and passenger demand) –Varied pattern by market over time

Pricing tactics Can be categorized as:Can be categorized as: 1) Fare actions Changes (Increase/ reduce) to actual fares levelChanges (Increase/ reduce) to actual fares level Changes can be market specific, regional or mass market in scopeChanges can be market specific, regional or mass market in scope Among the tactics areAmong the tactics are –Introductory fares –System-excursion-fare sales –System business-fare sales –Connect market sales * Excursion Fares are lower priced fares that involve restrictions like advance purchase, time of year, minimum/maximum stay, etc.

–Target segment pricing –Flight-time-specific-terms –Mileage-based pricing –Zone pricing –Value-added pricing 2) Adjustments to fare rules and/or restrictions Periodic adjustment of rules and restrictions, that inludesPeriodic adjustment of rules and restrictions, that inludes –Advance purchase requirements –One-way vs. round trip purchase requirements –Fare penalties –Directional pricing –Peak and off-peak pricing Pricing tactics

Pricing analysis The airline may use any one, or a combination of the tactics described earlier to raise or lower a fareThe airline may use any one, or a combination of the tactics described earlier to raise or lower a fare The proper economic analysis supporting the decision to change fares will differ, depending on whether it involves a fare reduction or an increase. Steps in analyzing fare decreaseThe proper economic analysis supporting the decision to change fares will differ, depending on whether it involves a fare reduction or an increase. Steps in analyzing fare decrease Analyzing fair decreaseAnalyzing fair decrease –Subtract refunds, advertising, and additional passenger costs

Role of Inventory Management Aim to maximize individual flight revenueAim to maximize individual flight revenue Simply sell as many seats as possible at the highest possible faresSimply sell as many seats as possible at the highest possible fares Making an adequate of lower fare seats far in advance of the departure dateMaking an adequate of lower fare seats far in advance of the departure date Overbook the flights just enough to make up for the number of passengers who can be expected not to show up for the flightOverbook the flights just enough to make up for the number of passengers who can be expected not to show up for the flight

No-frills airlines are airlines offer low fares but eliminate all unnecessary services, such as complimentary drinks and business-class seating.No-frills airlines are airlines offer low fares but eliminate all unnecessary services, such as complimentary drinks and business-class seating. A no-frills airline will typically cut overheads by flying from more remote airports (with lower access charges) and by using one type of aircraft.A no-frills airline will typically cut overheads by flying from more remote airports (with lower access charges) and by using one type of aircraft. No-Frills Airfare

Aircraft cabin interiors may be fitted out with minimum comforts, dispensing with luxuries such as seat-back video screens, reclining seats and blinds; some airlines choose to carry advertising inside the cabin to increase revenue.Aircraft cabin interiors may be fitted out with minimum comforts, dispensing with luxuries such as seat-back video screens, reclining seats and blinds; some airlines choose to carry advertising inside the cabin to increase revenue.

Question 7 Expectations of airline passengers have gone up over the years where airliners are required to design, control, and improve their pricing processes to achieve target results. a)Explain in your own words the four steps of airline pricing process. (8 marks) b) Briefly discuss the four types of airline costs that could determine the pricing the airline product (6 marks) c) From your opinion, which pricing tactics would you implement for your MAS and state your reasons. (2 marks)

Pricing Process Involve several steps:Involve several steps: –Pricing strategies and objectives –Pricing tactics –Pricing analysis –Inventory Management

Pricing strategies Charges by airline services include:Charges by airline services include: –The predictable seasonal pattern of demand, especially leisure travel –The influence of override commissions that many airlines pay to travel agencies –The dynamic nature of airline schedules (the strong r/ship between schedule frequency and passenger demand) –Varied pattern by market over time

Pricing tactics Can be categorized as:Can be categorized as: 1) Fare actions Changes (Increase/ reduce) to actual fares levelChanges (Increase/ reduce) to actual fares level Changes can be market specific, regional or mass market in scopeChanges can be market specific, regional or mass market in scope Among the tactics areAmong the tactics are –Introductory fares –System-excursion-fare sales –System business-fare sales –Connect market sales * Excursion Fares are lower priced fares that involve restrictions like advance purchase, time of year, minimum/maximum stay, etc.

–Target segment pricing –Flight-time-specific-terms –Mileage-based pricing –Zone pricing –Value-added pricing 2) Adjustments to fare rules and/or restrictions Periodic adjustment of rules and restrictions, that inludesPeriodic adjustment of rules and restrictions, that inludes –Advance purchase requirements –One-way vs. round trip purchase requirements –Fare penalties –Directional pricing –Peak and off-peak pricing Pricing tactics

Pricing analysis The airline may use any one, or a combination of the tactics described earlier to raise or lower a fareThe airline may use any one, or a combination of the tactics described earlier to raise or lower a fare The proper economic analysis supporting the decision to change fares will differ, depending on whether it involves a fare reduction or an increase. Steps in analyzing fare decreaseThe proper economic analysis supporting the decision to change fares will differ, depending on whether it involves a fare reduction or an increase. Steps in analyzing fare decrease Analyzing fair decreaseAnalyzing fair decrease –Subtract refunds, advertising, and additional passenger costs

Role of Inventory Management Aim to maximize individual flight revenueAim to maximize individual flight revenue Simply sell as many seats as possible at the highest possible faresSimply sell as many seats as possible at the highest possible fares Making an adequate of lower fare seats far in advance of the departure dateMaking an adequate of lower fare seats far in advance of the departure date Overbook the flights just enough to make up for the number of passengers who can be expected not to show up for the flightOverbook the flights just enough to make up for the number of passengers who can be expected not to show up for the flight

Airline Costs Cost is a major determinant in pricing the airline productCost is a major determinant in pricing the airline product 4 types4 types –Direct operating costs –Indirect operating costs –Nonoperating costs –Fixed vs. Variable Costs

Direct operating costs Expenses associated with and dependent on the type of aircraft being operated, including all flying expenses such asExpenses associated with and dependent on the type of aircraft being operated, including all flying expenses such as 1. Flying operations costs Flight crew expensesFlight crew expenses Fuel and oilFuel and oil Airport and en route chargesAirport and en route charges Aircraft insurance costsAircraft insurance costs Other flight-operations expensesOther flight-operations expenses 2. MRO costs 3. Depreciation cost

Direct operating costs

Indirect operating costs Those costs that will remain unaffected by a change of aircraft type because they are not directly dependent on aircraft operations such asThose costs that will remain unaffected by a change of aircraft type because they are not directly dependent on aircraft operations such as –Station and ground expenses –Reservations, sales and promotional cots –General and administrative cots

Indirect operating costs

Nonoperating costs Those expenses and revenues not directly related to the operation of an airlines’ own air transportation services likeThose expenses and revenues not directly related to the operation of an airlines’ own air transportation services like –Gains or losses raising from the retirement of property or equipment –Interest paid on loans, banks or deposits –Gains or losses raising from an airline’s affiliated companies –Direct gov. subsidies and payments

Fixed vs. Variable Costs Variable costs are those costs that increase or decrease with the level of output, or available seat-miles (ASMB), that an airline produces.Variable costs are those costs that increase or decrease with the level of output, or available seat-miles (ASMB), that an airline produces. Example: Flight cancelation, engineering and maintenance costs.Example: Flight cancelation, engineering and maintenance costs.

Fixed vs. Variable Costs Fixed Costs. Fixed costs are those direct operating costs that, they are costs that are unavoidable in the short term.Fixed Costs. Fixed costs are those direct operating costs that, they are costs that are unavoidable in the short term. Example: Fleet planning, labour and maintenance requirement (handling aircraft).Example: Fleet planning, labour and maintenance requirement (handling aircraft).

Fixed-Base Operation: FBO Lesson 5 4 questions Q18-Q21

Question 1 An FBO's role is service. They do not make money by selling tickets for flights, but by selling fuel to plane owners and offering them a place to park their plane or plan the rest of their flight. a)Briefly explain in your own words the definition of airline Fixed Base Operation (3 marks) b) Discuss in your own words all the major services provided by FBOs. (9 marks) c) If you plan to start an airline FBO company, which kind of FBO services would your prefer and state your reason why (3 marks)

Fixed-Base Operations a service center at an airport that may be a private enterprise or may be a department of the municipality that the airport servesDef: a service center at an airport that may be a private enterprise or may be a department of the municipality that the airport serves At a minimum, most FBOs offer aircraft fuel, oil, and parking, along with access to washrooms and telephones. Some FBOs offer additional aircraft services such as hangar (indoor) storage, maintenance, aircraft charter or rental, flight training, deicing, and ground services such as towing and baggage handling.At a minimum, most FBOs offer aircraft fuel, oil, and parking, along with access to washrooms and telephones. Some FBOs offer additional aircraft services such as hangar (indoor) storage, maintenance, aircraft charter or rental, flight training, deicing, and ground services such as towing and baggage handling.

Fixed-Base Operations Major services provided by FBOs areMajor services provided by FBOs are –Ground Handling Cabin ServiceCabin Service CateringCatering Ramp ServiceRamp Service Passenger ServicePassenger Service –Field Operations Service

Question 2 Ground handling in FBO addresses the many service requirements of a passenger aircraft between the time it arrives at a terminal gate and the time it departs on its next flight. a)Briefly explain in your own words the concept of ground handling in FBO services (8 marks) b) Discuss your understanding on Avionics and what type of FBO services available. (4 marks) c) Why do you think FBO ground handling services require fast and efficient actions strictly monitored by the authorities? (3 marks)

Ground Handling Many airlines subcontract ground handling to an airport or a handling agent, or even to another airline.Many airlines subcontract ground handling to an airport or a handling agent, or even to another airline. Ground handling addresses the many service requirements of a passenger aircraft between the time it arrives at a terminal gate and the time it departs on its next flight.Ground handling addresses the many service requirements of a passenger aircraft between the time it arrives at a terminal gate and the time it departs on its next flight. Speed, efficiency, and accuracy are important in ground handling services in order to minimize the turnaround time (the time during which the aircraft must remain parked at the gate).Speed, efficiency, and accuracy are important in ground handling services in order to minimize the turnaround time (the time during which the aircraft must remain parked at the gate).

Airlines with less-frequent service or fewer resources at a particular location sometimes subcontract ground handling or on-call aircraft maintenance to another airline, as it is a short-term cheaper alternative to setting up its own ground handling or maintenance capabilities.Airlines with less-frequent service or fewer resources at a particular location sometimes subcontract ground handling or on-call aircraft maintenance to another airline, as it is a short-term cheaper alternative to setting up its own ground handling or maintenance capabilities. Ground Handling

Most ground services are not directly related to the actual flying of the aircraft, and instead involve other tasks. The major categories of ground handling services are described later in this chapter.Most ground services are not directly related to the actual flying of the aircraft, and instead involve other tasks. The major categories of ground handling services are described later in this chapter. Ground Handling

1) Cabin Services These services ensure passenger comfort. They include such tasks as cleaning the passenger cabin and replenishment of on- board consumables or washable items such as soap, pillows, tissues, blankets, etc.These services ensure passenger comfort. They include such tasks as cleaning the passenger cabin and replenishment of on- board consumables or washable items such as soap, pillows, tissues, blankets, etc. Ground Handling

1) Cabin Services Ground Handling

2) Catering Catering includes the unloading of unused food and drink from the aircraft, and the loading of fresh food and drink for passengers and crew.Catering includes the unloading of unused food and drink from the aircraft, and the loading of fresh food and drink for passengers and crew. Airline meals are typically delivered in trolleys. The empty or trash-filled trolley(s) from the previous flight is replaced by a fresh one.Airline meals are typically delivered in trolleys. The empty or trash-filled trolley(s) from the previous flight is replaced by a fresh one. Meals are prepared mostly on the ground in order to minimize the amount of preparation (apart from chilling or reheating) required in the air.Meals are prepared mostly on the ground in order to minimize the amount of preparation (apart from chilling or reheating) required in the air. Ground Handling

2) Catering Ground Handling

3) Ramp Service This includes services on the ramp or apron, such as:This includes services on the ramp or apron, such as: –Guiding the aircraft into and out of the parking position (by way of Aircraft marshalling) –Water cartage (to refill fresh water tanks) Ground Handling

This includes services on the ramp or apron, such as:This includes services on the ramp or apron, such as: –Lavatory drainage, Air conditioning (more common for smaller aircraft) Ground Handling 3) Ramp Service

Question 3 Airlines with less-frequent service or fewer resources sometimes subcontract FBO services as it is a short-term cheaper alternative. a)Briefly explain in your own understanding on ramp services (3 marks) b) Describe the 6 services available in ramp services and 3 services offered in passenger services. (9 marks) c) State which FBO services is subcontract to foreign company in Malaysia and discuss your reasons. (3 marks)

3) Ramp Service This includes services on the ramp or apron, such as:This includes services on the ramp or apron, such as: –Guiding the aircraft into and out of the parking position (by way of Aircraft marshalling) –Water cartage (to refill fresh water tanks) Ground Handling

This includes services on the ramp or apron, such as:This includes services on the ramp or apron, such as: –Lavatory drainage, Air conditioning (more common for smaller aircraft) Ground Handling 3) Ramp Service

Ground Handling –Refueling, which may be done with a refueling tanker truck or refueling pumper –Passenger stairs (used instead of an aerobridge or airstairs, some budget airlines use both to improve turnaround speed) etc. –Airstart units (for starting engines) –Luggage handling, usually by means of beltloaders and baggage carts –Air cargo handling, usually by means of cargo dollies, and cargo loaders –Catering trucks, Wheelchair lifts, if required –Deicing –Deicing, Ground power

3) Ramp Service Ground Handling

Question 4 FBOs’ operations commonly related to the actual flying of the aircraft, but may also offer services not directly related to the aircraft, such as rental cars, lounges, and hotel reservations. a)Briefly explain 8 others Other Operations of FBO excluding the major services (8 marks) b)Discuss in your own words four activities in ground handling FBO services. (4 marks) c) From you opinion, which type of FBO operation excluding the major services is the most profitable one? State your reason. (3 marks)

Other Operations of FBO Can be summarized as listed belowCan be summarized as listed below –Administration of the business –Line Services FuelingFueling Sale of lubricantsSale of lubricants –Aircraft storage Bulk hangarageBulk hangarage T-hangarageT-hangarage

–Aircraft maintenance (related to MRO) Major repairs and constructionsMajor repairs and constructions Minor repairsMinor repairs Annual inspections and relicensingAnnual inspections and relicensing –Engine maintenance MajorMajor MinorMinor RemanufactureRemanufacture Other Operations of FBO

–Avionics SalesSales ServicesServices –Maintenance –Recertification –Aircraft Sales and rentals New aircraftNew aircraft Used aircraftUsed aircraft Other Operations of FBO

–Flight instruction PrimaryPrimary AdvancedAdvanced –Instrument –Multi-engine RecurrentRecurrent –Parts sales and service Tires, brakes and bearingsTires, brakes and bearings BatteriesBatteries Other Operations of FBO

–Specialized commercial functions Aerial advertisingAerial advertising Not all FBOs perform all the functions listed beforeNot all FBOs perform all the functions listed before –Some may specialize in only one or two categories Other Operations of FBO

But normally performs the 6 major functions either asBut normally performs the 6 major functions either as –Part of business –By leasing space out to specialists who perform the functions on the owned/ leased premises An FBOs is like a shopping mall manager who is charged with making a profit on each of the many, widely diverse individual business operations within the orbit of the overall operationAn FBOs is like a shopping mall manager who is charged with making a profit on each of the many, widely diverse individual business operations within the orbit of the overall operation Other Operations of FBO

MRO- Maintenance, Repair & Overhaul Lesson 6 4 questions Q22-Q25

Question 1 The aircraft maintenance, repair and overhaul (MRO) sector has seen tremendous growth in recent years that involve cost centre within an airline, the maintenance, modification and aftermarket servicing of commercial aircraft, engines and components. a)Briefly explain in your own words the concept of maintenance, repair and overhaul (MRO). (3 marks) b) Describe in your own words the responsibility of the airline MRO operator? (9 marks) c) From your opinion, which is the most challenging task for an MRO operator and state your reason why. (3 marks)

MRO- Maintenance, Repair & Overhaul Aircraft MRO is the overhaul, repair, inspection or modification of an aircraft or aircraft componentAircraft MRO is the overhaul, repair, inspection or modification of an aircraft or aircraft component Maintenance includes the installation or removal of a component from an aircraft or aircraft subassembly, but does not include:Maintenance includes the installation or removal of a component from an aircraft or aircraft subassembly, but does not include: –Elementary work, such as spark plugs, checking cylinder compression, etc

–Servicing, such as refueling, washing windows –Any work done on an aircraft or aircraft component as part of the manufacturing process, prior to issue of a certificate of airworthiness or other certification document MRO- Maintenance, Repair & Overhaul

Responsibilities of Airline Operators (An Airline Operator shall ensure the airworthiness of the aeroplane and the serviceability of both the operational and emergency equipment, being responsible to perform and / or control the following. Defect rectification to an approved standard Preflight inspection Maintenance i.a.w. maintenance programme Effectiveness analysis Airworthiness Directives (ADs) Modifications and its policy Life limits and expiry dates These requirements must be performed in accordance with procedures acceptable to the Authority

Responsibilities of Airline Operators ( The airworthy condition of the aeroplane, even if the Airline Operator does not perform any maintenance ( Managing a maintenance programme (what maintenance is required, when to perform it, by whom and to what standard) and getting Authority approval ( Amending the maintenance programme and getting Authority approval ( Maintaining adequate knowledge of the design status of the aeroplane ( Establishing a policy, and work to that policy, to assess non-mandatory information such as certain Service Bulletins, Service Letters, etc. ( Analysing the effectiveness of the maintenance programme, with regard to spares, established defects, malfunctions and damage ( Providing a clear work order to the JAR-145 maintenance organization ( Checking the subcontracted work at the maintenance facilities ( The airworthy condition of the aeroplane, even if the Airline Operator does not perform any maintenance ( Managing a maintenance programme (what maintenance is required, when to perform it, by whom and to what standard) and getting Authority approval ( Amending the maintenance programme and getting Authority approval ( Maintaining adequate knowledge of the design status of the aeroplane ( Establishing a policy, and work to that policy, to assess non-mandatory information such as certain Service Bulletins, Service Letters, etc. ( Analysing the effectiveness of the maintenance programme, with regard to spares, established defects, malfunctions and damage ( Providing a clear work order to the JAR-145 maintenance organization ( Checking the subcontracted work at the maintenance facilities The Airline Operator is therefore responsible for:

MRO Challenges core business In order to reducecosts and increasesurvivability, AirlineOperators focus ontheir core business and reduce staff toa minimum Shortage of skilled staff Shortage of skilled staff is one of the greatest obstaclestoday for futureperformance gainsamong AirlineOperators increasingly more complex Newer enginesare becomingincreasingly more complex requiring higher levels ofengineeringexpertise Added responsibilities on JAR-145 approved organisations stress National Authorities and Internal Audit to maintain proper control In general, Airline capability to control their JAR-OPS 1.890responsibilities in respect to engines has decreasedsignificantly in the past years and will probably continue in thenear future Highly competitive Highly competitive engine MROsituation preventsProviders fromobtaining desiredprofit margins Stresses MROQuality Assurancedepartments

Question 2 Airliner would develops its own MRO program, based on manufacturer’s planning documents, but includes adjustments for the airline’s own operations. a)Discuss in details the four categories of Maintenance, Repair and Overhaul (MRO) (9 marks) b) Discuss in your own words significance of MRO engine maintenance. (3 marks) c ) From your opinion, what are the key success indicator for an MRO service provider? (3 marks)

Maintenance of aircraft usually categorized intoMaintenance of aircraft usually categorized into –Product type (airframe, engine and components) –Timing and purpose of work Then, resulted into 4 categoriesThen, resulted into 4 categories –Routine scheduled maintenance –Non-routine maintenance –Refurbishments –Modifications MRO- Maintenance, Repair & Overhaul

Routine scheduled maintenance Includes airframe and engine checksIncludes airframe and engine checks The most elementary is visual inspection of the aircraft before flight- ‘walk-around’The most elementary is visual inspection of the aircraft before flight- ‘walk-around’ To ensure there are no leaks, missing rivets or cracks To ensure there are no leaks, missing rivets or cracks Types of checks-In GradesTypes of checks-In Grades –Overnight –A-Check

–B-check –C-check –D-Check Overnight: Operate 1 to 1.5 hrs. inspection (End of working day) to ensure the plane operating in according to OEM ‘s (Original Equipment Manufacturer) minimum listOvernight: Operate 1 to 1.5 hrs. inspection (End of working day) to ensure the plane operating in according to OEM ‘s (Original Equipment Manufacturer) minimum list In, example installation of telephones and other devicesIn, example installation of telephones and other devices 158 Routine scheduled maintenance

A-Check: Done after 125flight hours (2-3 weeks)A-Check: Done after 125flight hours (2-3 weeks) –An amplified preflight visual inspection of plane's power plants, avionics and accessories B-Check: Done approximately after 175 flight hours (3 to 4 months)B-Check: Done approximately after 175 flight hours (3 to 4 months) –An open inspection for preventive maintenance (exterior wash, engine oil) –Oils filters are removed and checked, parts are lubricated and carefully examined Routine scheduled maintenance

C-check: Carried out approximately for every 3000 flight hours (15 months)C-check: Carried out approximately for every 3000 flight hours (15 months) –Incorporates both A and B checks –Components are repaired, –Flights controls are calibrated –Major internal mechanism are tested –Other tests include minor structural inspections, compressor, flight control rigging tests, engine, compressor washes, aircraft appearance maintenance, and post-check flight tests Routine scheduled maintenance

D-Check: The most intensive, approximately 20, 000 flights hours (6-8 years)D-Check: The most intensive, approximately 20, 000 flights hours (6-8 years) –Cabin interiors (including seats, galleys, lavatories, cockpit, furnishings, headliners and sidewalls) are removed to enable careful structural inspections –Flights controls are examined and the fuel system is probed for leaks and cracks –The aircraft is stripped to its shell and rebuilt to return it to its original con Routine scheduled maintenance

Engine Maintenance JT8D at TAP Maintenance & Engineering Engine Overhaul Shop CFM56-5B and CFM56-5C at TAP Maintenance & Engineering C-Check Hangar I must leave this shop in full airworthy condition ! TAT and profit margin considerations shall never impair quality !

Engine MRO Providers OEM Original Equipment Manufacturers (own facilities or acquired shops) ex:GE, Snecma, P&W, RR, etc. Airlines Airline Engine Shops (integrated or independent from airline) ex:TAP M&E, KLM E&M, Lufthansa Technik, Air France Industries, etc. Independents Independent Engine Shops ex:MTU, Fiat Avio, IAI, etc.

Expectation from Engine MRO Provider Quality TAT Cost Manage workscope vs. required TAT Manage scrap replacement vs. repair Manage stock level vs. required TAT The key challenge for an Engine MRO Provider is to manage the balance between TAT and Cost maintaining Performance, Flexibility, Quality Performance, Flexibility, Quality

Engine MRO Providers OEM Original Equipment Manufacturers (own facilities or acquired shops) ex:GE, Snecma, P&W, RR, etc. Airlines Airline Engine Shops (integrated or independent from airline) ex:TAP M&E, KLM E&M, Lufthansa Technik, Air France Industries, etc. Independents Independent Engine Shops ex:MTU, Fiat Avio, IAI, etc.

Question 3 MRO today has become more sophisticated in identifying, diagnosing and transmitting defects that require the important feature of MRO Management. a)Briefly explain the difference in refurbishments and modifications in MRO. State some examples to support your answer. (4 marks) b) Discuss in your own words the standard expectations from an MRO Provider (8 marks) c) From your opinion, which MRO provider would you prefer to service your aircraft? State your reasons (3 marks)

Refurbishments Any form of upgrading of cleaning, brighting, or making it fresh again.Any form of upgrading of cleaning, brighting, or making it fresh again. To renovate and upgrade the aircraftTo renovate and upgrade the aircraft For example: Cabin upgrades and exterior paintingFor example: Cabin upgrades and exterior painting

Modifications Any form of small alteration, adjustment, or limitation to fulfill the aircraft’s owner.Any form of small alteration, adjustment, or limitation to fulfill the aircraft’s owner. Most modifications are carried out within the interior design, not much on the airframe and engine.Most modifications are carried out within the interior design, not much on the airframe and engine. For example: Installation of karaoke, PS3 and various kind of entertainment in the cabinFor example: Installation of karaoke, PS3 and various kind of entertainment in the cabin

Expectation from Engine MRO Provider Quality TAT Cost Manage workscope vs. required TAT Manage scrap replacement vs. repair Manage stock level vs. required TAT The key challenge for an Engine MRO Provider is to manage the balance between TAT and Cost maintaining Performance, Flexibility, Quality Performance, Flexibility, Quality

Expectation from Engine MRO Provider Reliability, Quality and Speed are nowadays more important than Price for the Airline Operator FactorRelative importance Source: A.T. Kearney

Question 4 One of the most critical activities for airline MRO is to strike a balance between supply and demand, as insufficient stock of spare parts can lead to stock outs and creating lost revenue opportunities. a)Briefly discuss all the challenges that the MRO provider faces. (8 marks) b)Guide MAS that has more than 1 year old aircraft with 3000 flight hours completed in the MRO routine scheduled maintenance. Which types of checks-in grades is suitable for this aircraft. (5 marks) c) From your opinion, would you opt to use contracted maintenance for your airline company. State your reasons. (2 marks)

MRO Challenges core business In order to reducecosts and increasesurvivability, AirlineOperators focus ontheir core business and reduce staff toa minimum Shortage of skilled staff Shortage of skilled staff is one of the greatest obstaclestoday for futureperformance gainsamong AirlineOperators increasingly more complex Newer enginesare becomingincreasingly more complex requiring higher levels ofengineeringexpertise Added responsibilities on JAR-145 approved organisations stress National Authorities and Internal Audit to maintain proper control In general, Airline capability to control their JAR-OPS 1.890responsibilities in respect to engines has decreasedsignificantly in the past years and will probably continue in thenear future Highly competitive Highly competitive engine MROsituation preventsProviders fromobtaining desiredprofit margins Stresses MROQuality Assurancedepartments

C-check: Carried out approximately for every 3000 flight hours (15 months)C-check: Carried out approximately for every 3000 flight hours (15 months) –Incorporates both A and B checks –Components are repaired, –Flights controls are calibrated –Major internal mechanism are tested –Other tests include minor structural inspections, compressor, flight control rigging tests, engine, compressor washes, aircraft appearance maintenance, and post-check flight tests Routine scheduled maintenance

Contract Maintenance When? When the airline do not have the personnel and equipment to perform maintenanceWhen the airline do not have the personnel and equipment to perform maintenance When serving a distant airport at which they do not have maintenance supportWhen serving a distant airport at which they do not have maintenance supportWhy? Different types of aircraft requires different expertise from different areasDifferent types of aircraft requires different expertise from different areas Low labor costLow labor cost Important note:Important note: –Some contracts extend to other functions, such as cleaning and fueling the aircraft

Airline Route Planning Lesson 7 5 questions Q26-Q30

Question 1 Route planning plays an important role in any aviation enterprise that provides a strategic decision-making in accurate airline route management. a)Briefly explain in your own words the concept of airline route planning and it’s implication to airliners.(5 marks) b) Discuss the three types of route available for airline routing management (6 marks) c) From your opinion, which is the most difficult freedom of air feasibility permission to be obtained by airliners? State your reasons. (4 marks)

Introduction A route is a description of the path followed by an aircraft when flying between airports. Most commercial flights will travel from one airport to another but private aircraft, commercial sightseeing tours, and military aircraft may often do a circular or out-and-back trip and land at the same airport from which they took off.A route is a description of the path followed by an aircraft when flying between airports. Most commercial flights will travel from one airport to another but private aircraft, commercial sightseeing tours, and military aircraft may often do a circular or out-and-back trip and land at the same airport from which they took off. This is where airlines deal with the application of forecasting method in determining the costs of a route of one flight from one destination to another eitherThis is where airlines deal with the application of forecasting method in determining the costs of a route of one flight from one destination to another either –Domestic or –International In terms of …In terms of … –Flight personnel –Fuel consumption –Facilities and Airport cost –Passenger Movement and Air Cargo

Importance of Route Planning Fuel prices are driving up costs just as business is starting to return to normal after a number of events in the recent past that had a major impact on international civil aviation. One of the steps that airliners are taking are to continue to ensure that the most cost-effective route between points of departure and destination is available. Due to many conflicting demands on the use of airspace by its many different users, as well as political, environmental and security considerations, it is frequently not possible to fly the most desirable route, and this adds to the additional fuel and maintenance costs incurred by operators.

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Airway –Airway routing occurs along pre-defined pathways called Airways. Airways can be thought of as three-dimensional highways for aircraft. In most land areas of the world, aircraft are required to fly airways between the departure and destination airports.

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Navaid –Navaid routing occurs between Navaids (short for Navigational Aids, see VOR) which are not always connected by airways. Navaid routing is typically only allowed in the continental U.S. If a flight plan specifies Navaid routing between two Navaids which are connected via an airway, the rules for that particular airway must be followed as if the aircraft was flying Airway routing between those two Navaids. Allowable altitudes are covered in Flight Levels.

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Navaid

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Direct –Direct routing occurs when one or both of the route segment endpoints are at a latitude/longitude which is not located at a Navaid. Some flight planning organizations specify that checkpoints generated for a Direct route be a limited distance apart, or limited by time to fly between the checkpoints (i.e. direct checkpoints could be farther apart for a fast aircraft than for a slow one).

Freedom 8 The right to carry passengers or cargo between two or more points in one foreign country.The right to carry passengers or cargo between two or more points in one foreign country. The eighth freedom is also known as cabotage, and is extremely rare outside of Europe.The eighth freedom is also known as cabotage, and is extremely rare outside of Europe. The main real life example of eighth-freedom rights is the European Union, which has granted such rights between all of its member states.The main real life example of eighth-freedom rights is the European Union, which has granted such rights between all of its member states.

Freedom 9 The right to carry passengers or cargo within a foreign country without continuing service to or from one's own country.The right to carry passengers or cargo within a foreign country without continuing service to or from one's own country. Sometimes also known as stand alone cabotage. It differs from the aviation definition of true cabotage, in that it does not directly relate to one's own country.Sometimes also known as stand alone cabotage. It differs from the aviation definition of true cabotage, in that it does not directly relate to one's own country. The EU agreements mentioned above also fall under this category.The EU agreements mentioned above also fall under this category.

Question 2 Airline Route Planning deals with the application of forecasting method in determining the feasibility of a route of one flight from one destination to another. a)Discuss in your own words the significance in Freedoms of the air in air route feasibility (8 marks) b) Provide a route example for each freedom of air. (4 marks) c) From your opinion, why it is so importance for airline route planning management and state your reasons. (3 marks)

Freedom 1 It was also known as technical freedom. The right to overfly a country without landing. It grants the privilege to fly over the territory of a treaty country without landing.It was also known as technical freedom. The right to overfly a country without landing. It grants the privilege to fly over the territory of a treaty country without landing. Member states of the International Air Services Transit Agreement are granting this freedom (as well as the Second Freedom) to other member states, subject to the transiting aircraft using designated air routesMember states of the International Air Services Transit Agreement are granting this freedom (as well as the Second Freedom) to other member states, subject to the transiting aircraft using designated air routes

Freedom 1

Freedom 2 It was also a technical freedom. The right to stop in a country for refueling or maintenance on the way to another, without transferring passengers or cargo.It was also a technical freedom. The right to stop in a country for refueling or maintenance on the way to another, without transferring passengers or cargo.

Freedom 3 It was the First Commercial Freedom. The right to carry passengers or cargo from one's own country to another.It was the First Commercial Freedom. The right to carry passengers or cargo from one's own country to another.

Freedom 4 The right to carry passengers or cargo from another country to one's own.The right to carry passengers or cargo from another country to one's own. Third and fourth freedom rights are almost always granted simultaneously in bilateral agreements between countries.Third and fourth freedom rights are almost always granted simultaneously in bilateral agreements between countries.

Freedom 5 It is also called a connecting flight. The right to carry passengers from one's own country to a second country, and from that country to a third country. An example of this could be Emirates Airlines flights originating in Dubai, then going on to Bangkok, and then from Bangkok to Sydney, where tickets can be sold on any or all sectors.It is also called a connecting flight. The right to carry passengers from one's own country to a second country, and from that country to a third country. An example of this could be Emirates Airlines flights originating in Dubai, then going on to Bangkok, and then from Bangkok to Sydney, where tickets can be sold on any or all sectors. Two sub-categories exist. Beyond Fifth Freedom allows the right to carry passengers from the second country to the third country. Intermediate Fifth Freedom allows the right to carry passengers from the third to the second country.Two sub-categories exist. Beyond Fifth Freedom allows the right to carry passengers from the second country to the third country. Intermediate Fifth Freedom allows the right to carry passengers from the third to the second country.

Freedom 6 The right to carry passengers or cargo from a second country to a third country by stopping in one's own country.The right to carry passengers or cargo from a second country to a third country by stopping in one's own country. Cathay Pacific Airways, Thai Airways, Malaysia Airlines, Singapore Airlines and other airlines in Asia use sixth-freedom rights extensively to fly passengers between Europe and Australasia. Likewise, American Airlines connects passengers from Europe and Asia to other countries in the Americas via U.S. ports, and British Airways commonly tickets passengers from America to Asia via London. Icelandair sells tickets between Europe and North America via Iceland, Finnair sells tickets from North America to Asia via Helsinki.Cathay Pacific Airways, Thai Airways, Malaysia Airlines, Singapore Airlines and other airlines in Asia use sixth-freedom rights extensively to fly passengers between Europe and Australasia. Likewise, American Airlines connects passengers from Europe and Asia to other countries in the Americas via U.S. ports, and British Airways commonly tickets passengers from America to Asia via London. Icelandair sells tickets between Europe and North America via Iceland, Finnair sells tickets from North America to Asia via Helsinki.

Freedom 7 The right to carry passengers or cargo between two foreign countries without continuing service to one's own country.The right to carry passengers or cargo between two foreign countries without continuing service to one's own country. The seventh freedom is rare because it is usually not in the commercial interest of airlines, except in Europe where an EU open sky has seen many carriers, particularly low cost carriers, operate flights between two points, with neither of them being in their home country.The seventh freedom is rare because it is usually not in the commercial interest of airlines, except in Europe where an EU open sky has seen many carriers, particularly low cost carriers, operate flights between two points, with neither of them being in their home country.

Freedom 8 The right to carry passengers or cargo between two or more points in one foreign country.The right to carry passengers or cargo between two or more points in one foreign country. The eighth freedom is also known as cabotage, and is extremely rare outside of Europe.The eighth freedom is also known as cabotage, and is extremely rare outside of Europe. The main real life example of eighth-freedom rights is the European Union, which has granted such rights between all of its member states.The main real life example of eighth-freedom rights is the European Union, which has granted such rights between all of its member states.

Freedoms of the air

Question 3 Airline Route Planning provides airliners with the global overview and practical detail necessary to improve their traffic systems and fleets, and thus to enhance the operating and economic efficiency of airlines. a)Describe your understanding on the implication of airline route planning to airliners. (5 marks) b) Discuss in your own words the similarities and differences of the fifth and sixth freedom of air. (6 marks) c) From your opinion, why does weather forecast is an important factor in airline route planning? State your reasons (4 marks)

Importance of Route Planning Fuel prices are driving up costs just as business is starting to return to normal after a number of events in the recent past that had a major impact on international civil aviation. One of the steps that airliners are taking are to continue to ensure that the most cost-effective route between points of departure and destination is available. Due to many conflicting demands on the use of airspace by its many different users, as well as political, environmental and security considerations, it is frequently not possible to fly the most desirable route, and this adds to the additional fuel and maintenance costs incurred by operators.

Freedom 6 The right to carry passengers or cargo from a second country to a third country by stopping in one's own country.The right to carry passengers or cargo from a second country to a third country by stopping in one's own country. Cathay Pacific Airways, Thai Airways, Malaysia Airlines, Singapore Airlines and other airlines in Asia use sixth-freedom rights extensively to fly passengers between Europe and Australasia. Likewise, American Airlines connects passengers from Europe and Asia to other countries in the Americas via U.S. ports, and British Airways commonly tickets passengers from America to Asia via London. Icelandair sells tickets between Europe and North America via Iceland, Finnair sells tickets from North America to Asia via Helsinki.Cathay Pacific Airways, Thai Airways, Malaysia Airlines, Singapore Airlines and other airlines in Asia use sixth-freedom rights extensively to fly passengers between Europe and Australasia. Likewise, American Airlines connects passengers from Europe and Asia to other countries in the Americas via U.S. ports, and British Airways commonly tickets passengers from America to Asia via London. Icelandair sells tickets between Europe and North America via Iceland, Finnair sells tickets from North America to Asia via Helsinki.

Question 4 Airlines determine their own fate on how profitable a particular route is by how well they manage the revenue management process. Revenue Management is the process by which an airline manages its inventory on routes. a)What is the three most importance factors need to be considered before planning your airline routing. (8 marks) b) Which freedom of air is known as “stand alone cabotage”? Briefly explain it. (4 marks) c)From your opinion, what are your creative strategies to improve the airline routing that could attract more passengers. (3 marks)

Determine the DEMANDS Passenger Demand:Passenger Demand: –How many? –How many seats available? –The kind of aircraft to be used? –The kind of facilities needed? (i.e., catering, baggage handling, airport facilities) Fuel:Fuel: –How much is the consumption? –How far is the journey?

Determine YOUR CAPACITY Cabin CrewsCabin Crews Facilities-Airport servicesFacilities-Airport services Ground Handling-MROGround Handling-MRO

Determine the COSTS Remember the categories of costs in airline business?Remember the categories of costs in airline business? –Two major costs –Direct, indirect and non-operating costs –Major and unpredictable costs

Question 5 Often the research to determine whether any particular route is profitable or not is a vital question to consider. Airlines believe to study the latest trends and critical factors to look for during route feasibility analysis. a)Explain in your own words the common factors need to be considered during route feasibility analysis (9 marks) b) If MAS is planning to carry passengers from Kuala Lumpur and Singapore to Melbourne, Australia, which freedom of air should MAS comply? State your reasons. (3 marks) c) From your opinion, which routing type would you opt to use for your airline company. State your reasons (3 marks)

Route Planning Considerations Route planning must take many factors into account: Passenger demand: The ability to obtain maximum airline profit from high passenger load factor Distance/ Mileage: The particular route to be flown determines the ground distance to cover, effecting on time and marketability of the route Feasibility: Government and regulation permission for feasible airline route Weather forecasts: The air temperature affects the efficiency/fuel consumption of aircraft engines. The wind may provide a head or tail wind component which in turn will increase or decrease the fuel consumption by increasing or decreasing the air distance to be flown Passenger safety: Passenger risk assessment

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Airway –Airway routing occurs along pre-defined pathways called Airways. Airways can be thought of as three-dimensional highways for aircraft. In most land areas of the world, aircraft are required to fly airways between the departure and destination airports.

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Navaid –Navaid routing occurs between Navaids (short for Navigational Aids, see VOR) which are not always connected by airways. Navaid routing is typically only allowed in the continental U.S. If a flight plan specifies Navaid routing between two Navaids which are connected via an airway, the rules for that particular airway must be followed as if the aircraft was flying Airway routing between those two Navaids. Allowable altitudes are covered in Flight Levels.

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Navaid

Routing types Aircraft routing types used in flight planning are: Airway, Navaid and Direct. A route may be composed of segments of different routing types. Direct –Direct routing occurs when one or both of the route segment endpoints are at a latitude/longitude which is not located at a Navaid. Some flight planning organizations specify that checkpoints generated for a Direct route be a limited distance apart, or limited by time to fly between the checkpoints (i.e. direct checkpoints could be farther apart for a fast aircraft than for a slow one).

AVE3103 Final Exam Final Exam Preparation 6 questions. Answer 4 minimum 15 points each; total 60 points Date: 27 th October 2010 Wednesday Time: 9.00am.

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AVE3103 Final Exam Final Exam Preparation 6 questions. Answer 4 minimum 15 points each; total 60 points Date: 27 th October 2010 Wednesday Time: 9.00am.

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Presentation on theme: "AVE3103 Final Exam Final Exam Preparation 6 questions. Answer 4 minimum 15 points each; total 60 points Date: 27 th October 2010 Wednesday Time: 9.00am."— Presentation transcript:

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