TOUR07H- PRELIM
specific region.
Airline Business Reviewer
SESSION TOPIC: GENERAL KNOWLEDGE ABOUT
AIRLINE INDUSTRY
Air transport is an aircraft design for transporting
passengers and freight from one location to another in
the air using airplanes, jets, rockets helicopters, and
drones.
Air transport is the newest means of transport; this
means of transport was introduced in 1903 but
developed into full means of transporting people and
freights in the 1930s. The greatest of air transportation
started after the Second World War (WW11). This
means of transportation can be used for both domestic
and international flights.
What is an Airline?
According to ICAO atleast, airline refers only to
international operations. From the Convention on
International civil Aviation:
a) "Air service" means any scheduled air service
performed by aircraft for the public transport of
passengers, mail or cargo.
b) "International air service" means an air service
which passes through the air space over the territory of
more than one State.
c) "Airline" means any air transport enterprise offering
or operating an international air service.
Air Carrier — a person who undertakes directly by
lease, or other arrangement, to engage in air
transportation. This includes an individual, firm,
partnership, corporation, company, association, joint-
stock association, governmental entity, and a trustee,
receiver, assignee, or similar representative of such
entities.
Passenger Airlines are categorized into domestic,
regional, and international depending on their
destinations
a. Domestic airlines – provide air transportation
services to passengers and for cargo on regular
schedules within a country. Domestic air transportation
include any flight that begins and ends in the same
country.
b. Regional airlines – provide air transportation services
to passengers and for cargo on regular schedules within
the same continent; regional airlines may be providing
both domestic and international flights within their
c. International airlines – provide air transportation
services to passengers or cargo on regular schedules
within and outside the continent of airline’s registered
country.
 Scheduled airlines
Scheduled airlines provide fixed-schedule services.
Passengers may select the most suitable flights offered
by the airline and air tickets may be purchased through
authorized travel agencies or directly to airline’s own
reservation systems. This kind of airlines require
intensive planning based on passengers’ demand,
operations ability and pricing and marketing strategies.
The following are the characteristics of scheduled
airlines:
• The schedule is fixed for departure and arrival
• The flights cannot be canceled in case there is a low
revenue or few passengers
• Bounded by International Air Transport Association
(IATA) rules
• Route planning, service frequency, and hub and spoke
are complex
 Charter Airlines
A charter flight is an unscheduled flight that is not part
of a regular airline routing. With a charter flight, you
rent the entire aircraft and can determine
departure/arrival locations and times.
Because a charter flight is not part of a scheduled
service, the flight will depart when you want it to. You
are also able to choose which cities you fly to and from.
Charter Flights are particularly convenient when you
need to travel to a city where scheduled airline service
may require multiple connections or layovers before
you reach your destination.
Characteristics of charter airlines:
• The passengers or tour operators may decide on
routing and departing time
• It can easily determine their own budget
• They do not operate a flight until the desired amount
of profit is earned. The airline will provide charter
services only if the desired amount of income will be
generated.
• They are not bounded by IATA rules and therefore,
are more able to set their own regulations
 Ad hoc charters
Ad hoc charters operate flights not indicated by a set
schedule due to the increased demand for travel during
peak travel seasons or a sudden need for an individual
to fly on business. Insurance companies are known to
book charter flights to repatriate a customer in need of
medical care abroad or within a country. Governments
also charter these flights to repatriate citizens because
of political instability or disaster in another country.
The following are the characteristics of ad hoc charters:
• Operated for a specific purpose
• Customers state the routing and timing of the flight
• Often booked in a “last minute” or “emergency”
situation
Basic Airline Routing Strategy
 Point to Point
Point-to-point strategy refers to a transportation system
in which an aircraft travels directly to a destination,
rather than going through a hub.
Advantages of a point-to-point system:
• Since the aircraft travel directly to their destinations
from the original point, the travel time for the
passengers is minimized.
• There is less chance of losing baggage on a non-stop
flight
• Travelers do not have long layover times in a transit
airport.
Disadvantages of a point-to-point system:
• If the airline does not serve a desired origin-and-
destination pair, the passenger will not choose to fly
with the airline.
• Requires a large fleet size. Therefore, the airline needs
to invest more capital in purchasing aircraft so that
more routes can be offered.
 Hub and spoke
A (pure) hub-and-spoke network connects every
location through a single intermediary location called a
hub. Hub-and-spoke, as a network structure, allows for
greater flexibility within the transport system through a
concentration of flows.
A hub is a central airport that flights are routed through,
and spokes are the routes that planes take out of the
hub airport. Most major airlines have multiple hubs.
They claim that hubs allow them to offer more flights
for passengers.
The components of the hub-and-spoke system are as
follows:
• Line station – also referred to as a spoke, is any city
served by a hub. A line station feeds Passengers into the
hub in an effort to maximize service and increase
passenger loads.
• Hub - a city is chosen to be a hub because of its
location, resources, and facilities available.
• Gateway- the last city or the first city in a country
from which the passenger departs to or arrives from an
international destination. A gateway city can also serve
as hub.
Advantages of a hub-and-spoke system
• The airline is able to operate to more destinations
with fewer aircraft
• Airlines are able to achieve higher passenger loads
• Airlines operate more frequently between the hub-
and-spoke cities
• With an increased frequency, airlines are able to
provide more flight operations to their passengers
• Airlines can purchase more aircraft and serve a
greater number of cities more efficiently with the hub-
and-spoke system
Disadvantages of a hub-and-spoke system
• The fixed timetable of the network means that an
interruption at one station can have repercussions
through the entire network
• Airlines are not allowed to take advantage of
increased demand between two cities because aircraft
are previously earmarked
• Delays at the hub for any reason cause congestion to
the entire network of flights
• Passengers and cargo suffer longer times to reach
their destination
• Inconvenient for passengers who are required to
deplane, locate their new departure gate and board the
next aircraft
Code share
Business arrangements where two or more airlines
agree to market and publish a particular flight as part of
their own schedule or timetable. Only one carrier
actually operates the flight, however the other airlines
marketing the flight can all add their own unique flight
number to the flight for marketing purposes.
Advantages of code sharing
• The operating airline increases the number of
passengers flying on its planes thereby increasing the
efficiency of each flight.
• Airline provide more destinations without extra
investments.
• Passengers benefit from greater number of
destinations and flight choices on multiple airlines
which can be conveniently booked through a single
source such as the airline’s website.
• Code sharing also allows passengers to earn more
mileage points when they are traveling on different
airlines.
Disadvantages of code sharing
• Ticket prices are often higher due to reduction of
flight frequencies and diminished competition between
airlines.
• Often passengers are confused about the operating
carrier and the marketing carrier. This is especially
problematic if the passenger has a strong preference for
an airline’s aircraft and crew
The International Civil Aviation Organization (ICAO) was
officially established in May 1945 with its headquarters
located in Montreal, Canada.
As of 2019, there are 193 member states in the ICAO.
There are four bodies established to govern the various
aspects of such a diverse industry:
• ICAO – The International Civil Aviation Organization
a UN specialized agency, established by States in 1944
to manage the administration and governance of the
Convention on International Civil Aviation (Chicago
Convention). Conventions 193 member states.
• IATA – The International Air Transport Association
the trade association for the world’s airlines,
representing some 290 airlines or 82% of total air traffic.
They support many areas of aviation activity and help
formulate industry policy on critical aviation issues.
• CANSO – The Civil Air Navigation Services
Organization
a representative body of companies that provide air
traffic control. It represents the interests of Air
Navigation Service Providers (ANSPs). CANSO members
are responsible for supporting over 85% of world air
traffic, and through its workgroups, members share
information and develop new policies, with the aim of
improving air navigation services on the ground and in
the air.
• ANSP – Air Navigation Service Providers
an organization that provides the service of managing
the aircraft in flight or on the maneuvering area of an
and which is the legitimate holder of that responsibility.
A body that manages flight traffic on behalf of a
company, region or country.
Airline Codes
IATA airline designators, sometimes called IATA
reservation codes, are two-character codes assigned by
the International Air Transport Association (IATA) to
the world's airlines.
SESSION TOPIC: AIR TRAVEL PROCESS
The Pre-Travel Process
The pre-travel process is the first stage when the
passenger makes plans for trip. There are
different reasons for passengers to travel and these
purposes can be divided mainly into business
and leisure.
• Business Travel. Business travel, otherwise known as
corporate travel, is a term used to describe travel that is
carried out on behalf of a business, or for the purposes
of doing business with someone else.
• Leisure Travel. Leisure travel is travel in which the
primary motivation is to take a vacation from everyday
life.
Airline Reservation Department
Reservation and ticket agents are employed by airlines,
bus companies, railroads, and cruise lines to help
customers in several ways. Reservation agents make
and confirm travel arrangements for passengers by
using computers and manuals to determine timetables,
taxes, and other information.
Airport City office
These offices are usually full-service offices offering SESSION TOPIC: PASSENGER TERMINAL ENVIRONMENT
reservations services, ticketing purchase, resolution of
ticketing issues, disposition of lost or broken baggage Airport
etc. Airport, also called air terminal, aerodrome, or airfield,
Airport ticket counter site and installation for the takeoff and landing of
aircraft. An airport usually has paved runways and
Airport ticket counters are usually located in the airport maintenance facilities and serves as a terminal for
terminal nearby the check-in Counter passengers and cargo.
Travel agents Airport Ground Services
A travel agency is a retail business engaged in selling  Check-in counter
and arranging transportation, accommodations, tours,  Airport Ticketing
and trips for travelers. Also known as “travel bureau”. A  Boarding gate
travel agency's main function is to act as an agent,  Waiting Area
selling travel products and services on behalf of a  Airline and Airport Lounge
supplier or in this case are the airline companies.  Arrival
 Transfer desk
Airline Tickets
 Lost and Found
After a reservation has been made and paid for, air  Weight and Balance
tickets are issued to the passengers.
Airport Partner Services
There are two types of ticket formats: paper and
electronic.  Airport Authority
 Immigration
Paper Tickets- It is a conventional airline ticket,  Customs
consisting of a coupon for each flight together with  Airport Security
other administration coupons. Paper tickets are rarely  Law enforcement
required nowadays.  Port health
Electronic tickets- An e-ticket carries the same  Airport Clinic
information as a paper ticket. The major difference is an  Tax refund office
eticket is located in an airline's computer database,  Embassy and consulates
instead of the passenger's suitcase. It is an electronic
record of the traveler's airline reservation.
 Departure Process
On the day of the departure, passengers are required to
arrive at the airline's check-in counter one to three
hours prior to the flight to obtain their boarding passes.
 Arrival Process
After the aircraft lands at the destination, passengers
disembark from the aircraft. Arrival passengers may be
categorized into three groups: transit, transfer, and
arrival.
Interlining
There are two types of interline agreements: interline
check-in or baggage only. With interline check-in
agreements, the airlines may issue boarding passes on
each other's flights and transfer baggage between their
respective flights.