1 © 2006 by nelson, a division of thomson canada limited. the airline industry

11 © 2006 by Nelson, a division of Thomson Canada Limited.© 2006 by Nelson, a division of Thomson Canada Limited.

The Airline IndustryThe Airline Industry


The Regulation-Deregulation The Regulation-Deregulation ContinuumContinuum

In the early 1980s, the United States led an initiative In the early 1980s, the United States led an initiative to reduce the amount of government control over the to reduce the amount of government control over the airline industry.airline industry.

It was designed to make the industry more It was designed to make the industry more competitive and better for the customer. competitive and better for the customer.

The key areas it affected:The key areas it affected: Entry / Exit restrictionsEntry / Exit restrictions Rate/Fare SettingRate/Fare Setting Freedom to ManageFreedom to Manage Mergers and AcquisitionsMergers and Acquisitions End monopoliesEnd monopolies


Types of AircraftTypes of Aircraft

Engine TypesEngine Types Jet enginesJet engines Propeller drivenPropeller driven

PurposePurpose Short-haulShort-haul Short to Medium – Short to Medium –

haulhaul Long-haulLong-haul Special purposeSpecial purpose


Types of Air ServiceTypes of Air ServiceUnited StatesUnited States

Major air carriersMajor air carriers National air carriersNational air carriers Large regional/ Large regional/

commuter carrierscommuter carriers Medium sized Medium sized

regional/commuter regional/commuter carrierscarriers

CanadaCanada National carriersNational carriers Regional carriersRegional carriers International carriersInternational carriers Domestic charter air Domestic charter air

serviceservice International charter International charter

air serviceair service


AirportsAirports

Airports collect date on the consumers of Airports collect date on the consumers of their facilities; they are collected under the their facilities; they are collected under the following headingsfollowing headings– Canadian Airport Passenger DataCanadian Airport Passenger Data– Canadian City Pair Passenger DataCanadian City Pair Passenger Data

Passengers by SectorPassengers by Sector– DomesticDomestic– TransborderTransborder– InternationalInternational


Airport LayoutAirport Layout Terminal BuildingTerminal Building Cargo TerminalCargo Terminal Control TowerControl Tower HangarsHangars RunwaysRunways Loading ApronLoading Apron TaxiwaysTaxiways All of this means that modern, All of this means that modern,

state of the art airports cover state of the art airports cover large areas.large areas.– Some airports have their Some airports have their

own subways to move own subways to move passengers from the passengers from the parking lots to the parking lots to the terminals.terminals.


RegulationRegulation

While there was some de-regulation, the industry is While there was some de-regulation, the industry is still quite regulated worldwide.still quite regulated worldwide.

The International SystemThe International System Worldwide ConferencesWorldwide Conferences The Freedoms of the AirThe Freedoms of the Air Bilateral AgreementsBilateral Agreements International Air Transport AssociationInternational Air Transport Association Traffic ConferencesTraffic Conferences


RegulationRegulation

CanadaCanada The 1990’s Canada followed the American example and started to de-The 1990’s Canada followed the American example and started to de-

regulate (loosen its control over the industry)regulate (loosen its control over the industry) This led to This led to

– Airline RestructuringAirline Restructuring– Open Skies Agreements (U.S.) allows plans from other countries to set up Open Skies Agreements (U.S.) allows plans from other countries to set up

and sell tickets in Canadaand sell tickets in Canada New Entrants: smaller airlines (Canada 2000, Westjet, Canjet)New Entrants: smaller airlines (Canada 2000, Westjet, Canjet)

– Many of these went bankrupt following 9/11Many of these went bankrupt following 9/11 The 2000’sThe 2000’s

– There is only one national airline (Air Canada), the few remaining Canadian There is only one national airline (Air Canada), the few remaining Canadian ones are local or regional.ones are local or regional.

– Alliances: some airlines are working together rather than directly competing Alliances: some airlines are working together rather than directly competing for the same passenger. By coordinating flight times etc.for the same passenger. By coordinating flight times etc.


Factors Affecting the PriceFactors Affecting the Price

Type of JourneyType of Journey– One WayOne Way– Round TripRound Trip– Circle TripCircle Trip– Open JawOpen Jaw

Type of FlightType of Flight– Non-stopNon-stop– DirectDirect– Interline connectionInterline connection– Online connectionOnline connection– StopoverStopover


Airline Industry ConcernsAirline Industry Concerns

Concern for the EnvironmentConcern for the Environment Concern about Air Rage and Airport RageConcern about Air Rage and Airport Rage Consumer ComplaintsConsumer Complaints


Career OpportunitiesCareer Opportunities

Flight CrewFlight Crew Ground Crew or StaffGround Crew or Staff NAV CANADA EmployeesNAV CANADA Employees Station ManagerStation Manager Airport ManagerAirport Manager General OfficeGeneral Office Sales OfficeSales Office

1 © 2006 by nelson, a division of thomson canada limited. the airline industry

Documents