Introduction to Aviation Management and Policy

Introduction to Aviation Management and Policy

Air transportation - a management perspective

Flying-off course

Straight and level: practical airline economics

Who are the market participants in the aviation business?

Aircraft manufacture

Airport

Airline

Grand handing by companies

Maintain companies

Cargo/ passengers

Travel agencies

Organisations

Regulators

Air traffic control

Meteorology

Safety

Security

Insurance companies

Airport retailers

CRS (Computer Reservation System)/ GDS (Global Distribution System)

(Hotels)

Freedoms of the Air

Technical freedom:

First Freedom - the right to fly and carry traffic over the territory of another partner to the agreement without landing. (Almost all countries are partnered to the Convention but some have observed this freedom better than others. When the Korean airliner lost its way over Soviet air space a few years ago and was shot down, the Soviet Union violated the First Freedom.)

Second Freedom - the right to land in those countries for technical reasons such as refuelling without boarding or deploying passengers.

Commercial freedom:

Third Freedom - the right of an airline from one country to land in a different country and deplane passengers coming from the airline’s own country

Fourth Freedom - the right of airline from one country to land in a different country and board passengers travelling to airline’s own country

Fifth Freedom - (also sometimes referred as beyond rights’) it is the right of an airline from one country to land in a second country, to then pick up passengers and fly on to a third country where the passengers the deplane. An example would be a flight American Airlines from the US to England that is going on to France. Traffic could be picked up in England and taken to France.

Sixth Freedom - the right to carry traffic from one state through the home country to a third state. Example: traffic from England coming to the US on a US airline and then going to Canada on the same airline

Seventh Freedom - the right tot carry traffic from one state to another state without going through the home country.

Eighth Freedom - this is also called cabotage and almost no country permits it. Airline cabotage is the carriage of air traffic that originates and terminates within the boundaries of a given country by an air carrier of another country. An example of this would be and airline like the Virgin Atlantic Airways operating flights between Chicago and New Orleans

Bilateral Agreements - Air Service Agreements (ASA)

What can be regulated in ASAs:

Market Access:

one point per country - limited number - open access

few 5th freedom rights, limited capacity

charter traffic rights not included

Designation:

single - double - multiple designation

ownership and control rules

Capacity:

50:50 seats or frequencies - other distribution rules - no limits

Tariffs:

related to cost plus profit

double