 INTRODUCTION TO AIRLINE

OPERATION AND MANAGEMENT

FACULTY: SHAZA HASHAR

LECTURE 01
MAIN PILLARS OF AVIATION
AVIATION
INDUSTR
Y
Civil
Aviation

Military
Aviation
Commercial Aviation

 The commercial aviation sector of aviation involves operating aircraft for hire to
transport passengers or multiple loads of cargo.
 Basically, if there is money involved to fund the flight, it is considered a commercial
operation! So, commercial aviation covers airline operations.
 Cargo freight transportation by air is also considered as commercial aviation.
 Airlines can be characterized as:
1. Major (also called mainline) airlines, such as Delta Air Lines and American Airlines
2. National airlines, like Atlas Air and Emery Worldwide (the U.S. does not have a
national airline)
3. Regional airlines, including Piedmont Airlines and SkyWest Airlines
 General Aviation
 According to the Aircraft Owners and Pilots Association (AOPA), An estimated
65% of general aviation flights are conducted for business and public services that need
transportation more flexible than the schedule airlines can offer. Essentially, general
aviation aircraft is for personal transport or business transport that does not use an airline.
 Examples of general aviation flights include:
 Emergency medical evacuations
 Transporting medical goods or humanitarian aid
 Airborne law enforcement
 Fighting forest fires
 Spraying crops for agriculture purposes
 Business or pleasure flights, for example, a businessman flying his own small airplane to
see clients in another city
 Note: There is some overlap with general aviation and commercial aviation.

For example, Business aviation is somewhere between commercial air transport

(charter operations/taxi/air ambulance operations) and general aviation (corporate
operations).
INTRODUCTION TO AIRLINE
INDUSTRY

 An airline is a company that provides air transport services for

traveling passengers and freight.
 Airlines utilize aircraft to supply these services and may form
partnerships or alliances with other airlines for codeshare agreements (in
which they both offer and operate the same flight).
 Generally, airline companies are recognized with an
air operating certificate or license issued by a governmental aviation
body.
 Airlines may be scheduled or charter operators.
 Airline Industry played Integral role in the creation of global economy.
 The Airline Industry itself is a major economic force, in terms of both its own operations and
its impacts on related industries, such as
 Aircraft manufacturing
 Tourism
 Air Freight
AIRLINES ARE ADDING VALUE TO THE
ECONOMY

 The Aviation Industry supports $3.5 trillion (4.1%) of the world’s gross
domestic product (GDP).
 If Aviation were a country, it would rank 17th in size by GDP.
 That equates to the GDP of Indonesia and the Netherlands.
 The growth of global airline industry was enabled by major technological innovations such
as
 Introduction of the jet airplanes for commercial use in the 1950s.
 Followed by the development of wide-body jumbo jets in the 1970s.
 At the same time, airlines were heavily regulated throughout the world.
 This deregulations help the airline industry to grow and creating an environment in which
technological advances and government policy took precedence over profitability and efforts
to promote competition in the Industry.
NUMBER OF PASSENGERS TRAVEL BY AIR

 According to ICAO statistics compilation of global travel by air,

 Total number of passengers carried on scheduled services rose to 4.3 billion in
2018.
 In 2020, due to coronavirus pandemic, the number of scheduled passengers
boarded by the global airline industry dropped to 1.7 billion. This represents a
61 percent loss in global air passenger traffic.
AIR CARGO CONTRIBUTION IN THE
ECONOMY

 Air cargo is a trade facilitator that contributes to global economic development

and creates millions of jobs.
 The global economy depends on the ability to deliver high-quality products at
competitive prices to consumers worldwide.
 Air cargo transports over US $6 trillion worth of goods, accounting for
approximately 35% of world trade by value.
 TYPES OF AIRLINE CATEGORIES
Major Airline
 Major airlines generate operating revenues of more than $1 billion annually.
 Previously called trunk carriers, they generally provide nationwide, and in
some cases, worldwide service.
 There are many major U.S. passenger airlines such as: Alaska, American,
American Eagle, Continental, Delta, Northwest, Southwest, United and US
Airways, Emirates Airline, Qatar Airways, Air China etc.
 In addition, some cargo airlines are classified as majors like: FedEx and
United Parcel Service.
National Airline
 National carriers are scheduled airlines with annual operating revenues
between $100 million and $1 billion.
 Many of the airlines in this category serve particular regions of the country,
although some provide long-haul and even international service.
 They operate between major cities and smaller communities surrounding them.
 Like the majors, nationals operate mostly medium- and large-sized jets.
 Some of the nationals companies like Atlas Air, Emery Worldwide, Evergreen,
Hawaiian, Midwest Express and Polar Air Cargo.
Regional Airline
 As their name implies, regional carriers are airlines whose service, for the most part, is
limited to a single region of the country.
 transporting travelers between the major cities of their region and smaller, surrounding
communities.
 This has been one of the fastest growing and most profitable segments of the industry since
deregulation.
 Regional carriers are divided into three sub-groups: large, medium and small.
 Large regionals are scheduled carriers with operating revenues of $20 million to $100
million. Most of their aircraft seat more than 60 passengers.
 Example: Bangkok Airways, Silk Air, Air Malta
Regional Airlines can be further divided in to three types:
1. Large Regional
2. Medium Regional
3. Small Regional

4. Large Regionals:
These are scheduled carriers with 20 million to 100 million dollars in annual revenue.
2. Medium Regionals:
These airlines operate on a smaller scale, with operating revenues of under 20 million dollar, and
often use only small aircraft.
3. Small Regionals:
These airlines don't have a set revenue definition, but are usually referred to as “commuter
airlines”. They use small aircraft with less than 61 seats.
Cargo Carriers
 Within the categories of major, national and regional airlines are, not only
passenger carriers, but cargo carriers as well.
 Much of the cargo that moves by air is carried in the bellies of passenger jets
or in combination aircraft where the main deck is divided into two sections,
one for cargo and one for passengers;
 Other aircraft in use by principally all cargo carriers, called freighters, carry
nothing but freight.
 Examples of Cargo Carriers: FedEx Express, Polar Air Cargo, Cargo lux,
DHL, UPS Air Cargo etc.
HOW MAJOR AIRLINES ARE STRUCTURED
Line Personnel
 These include everyone directly involved in producing or selling an airline's services –
 the mechanics, who maintain the planes; the pilots, who fly them; the flight attendants,
who serve passengers and perform various inflight safety functions; the reservation
clerks, airport check-in and gate personnel, who book and process the passengers; ramp-
service agents, security guards, etc.
 Line personnel generally fall into three broad categories:
1. engineering and maintenance,
2. flight operations, and
3. sales and marketing. These three divisions form the heart of an airline and generally
account for 85 percent of an airline's employees.
Operations
 This department is responsible for operating an airline's fleet of aircraft safely and
efficiently.
 It schedules the aircraft and flight crews and it develops and administers all policies and
procedures necessary to maintain safety and meet all regulatory requirements.
 It is in charge of all flight-crew training, both initial and recurrent training for pilots and
flight attendants, and it establishes the procedures crews are to follow before, during and
after each flight to ensure safety.
 Dispatchers also are part of flight operations. Their job is to release flights for takeoff,
following a review of all factors affecting a flight.
 These include the weather, routes the flight may follow, fuel requirements and both the
amount and distribution of weight onboard the aircraft. Weight must be distributed
evenly aboard an aircraft for it to fly safely.
Maintenance
 Maintenance accounts for approximately 11 percent of an airline's employees and 10-15
percent of its operating expenses.
 Maintenance programs keep aircraft in safe, working order; ensure passenger comfort;
preserve the airline's valuable physical assets (its aircraft); and ensure maximum
utilization of those assets, by keeping planes in excellent condition.
 An airplane costs its owner money every minute of every day, but makes money only
when it is flying with freight and/or passengers aboard. Therefore, it is vital to an airline's
financial success that aircraft are properly maintained
Sales and Marketing
 This division encompasses such activities as pricing, scheduling, advertising, ticket and cargo
sales, reservations and customer service, including food service.
 While all of them are important, pricing and scheduling in particular can make or break an
airline, and both have become more complicated since deregulation.
 Airline prices change frequently in response to supply and demand and to changes in the prices
of competitors’ fares.
 Schedules change less often, but far more often than when the government regulated the
industry.
 Airlines use sophisticated computer reservation systems to advertise their own fares and
schedules to travel agents and to keep track of the fares and schedules of competitors.
 Travel agents, who sell approximately 80 percent of all airline tickets, use the same systems to
book reservations and print tickets for travelers.
Reservations and Ticketing
 All of the major airlines are now offering electronic ticketing for domestic and international
air travel.
 Electronic ticketing allows an airline to document the sale and track the usage of
transportation.
 Passengers no longer worry about carrying flight coupons or losing their tickets. Passengers
have the ability to shop for the lowest priced transportation, make or change a reservation,
request refunds etc., not only from their travel agent but from their own personal home
computer or from a telephone, on the way to the airport.
 A boarding pass is issued at the airport in exchange for proof of a reservation (an airline
confirmation number) and payment (cash or a major credit card).
 The number of air travelers shopping, making reservations and purchasing electronic tickets
using the Internet is increasing daily. Self-service automated ticketing machines are also
widely available at major airports around the country.
Staff Personnel
 These include specialists in such fields as law, accounting, finance, employee relations and
public relations.
 Their function is to support the work of the line personnel, so that the airline runs efficiently and
earns a profit.
 For the most part, staff personnel work out of corporate headquarters and fall into seven broad
job categories typical of major corporations:
1. finance & property,
2. information services,
3. personnel,
4. medical,
5. legal,
6. public relations and
7. planning.
Subcontractors
 While major airlines typically do most of their own work, it is common for them to
farm out certain tasks to other companies.
 These tasks could include
1. aircraft cleaning,
2. fueling,
3. airport security,
4. food service and in some instances,
5. maintenance work.
 Airlines might contract out for all of this work or just a portion of it, keeping the jobs
in house at their hubs and other key stations