Aviation Management

1. What factors determine the dimensions of an airport’s catchment area? 

The geographic area surrounding an airport to which the airport markets itself is known as
the airport’s catchment area. The dimensions of this are determined by a number of things
including; the choices made by the passengers who choose to use that airport (Lieshout,
2012), the location or distance to the airport from major townships and other airports (Hae
Choi et al., 2019), and the services the airport has to offer (Trzepacz, 2014).

Passengers wishing to travel by air have to decide as to which airport they will go to, to get
the best service for their individual needs. These needs could include their destination and
whether or not it is international or domestic. This, therefore, dictates what airport they can
go to as to which one offers each service. Smaller airports might only offer a domestic
service compared to larger airports that can operate both internationally and domestically.
(Trzepacz, 2014). Furthermore, whether or not an airport is primarily for cargo or
passengers will dictate its location relative to built-up areas for passenger convenience or
closer to main roads and/or railroads for easier loading and unloading of cargo. The services
airports have to offer is a major determining factor of their catchment area dimensions
(Trzepacz, 2014).

The location or distance to the airport from major townships and other airports also vastly
impacts the dimensions of their catchment area. In areas with lesser population density,
with only a single airport in reasonable range, airport catchment areas are much larger as
they are the only option for prospective customers (Hae Choi et al., 2019). Whereas areas
with a greater population density often have multiple airports or multiple airports within
close enough proximity that travelling to an airport will not affect the decision-making
process of these prospective customers. This means that these airports will have smaller
catchment areas (Hae Choi et al., 2019).

2. What practical considerations shape airline route decisions, and which are the most
significant? 

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Practical considerations airlines need to take into account when making route decisions
include; the demand that the service has, and whether the demand is seasonal or all year
round, service type (whether it be full cost service or a low cost), and the population size of
the cities where the airlines are based out of (Gillen et al., 2015).

The service customers want is an important factor airlines need to consider when planning
their routes and distributing their fleets. The difference in cost for airlines operating full-
service carriers compared to those operating low-cost carriers can make or break an airline
if they do not fulfil their service requirements right. With full-service carriers, they usually
operate with a hub and spoke organizational design making a profit from an overall network
of multiple flights to and from the main hub (Curran, 2020). Whereas low-cost carriers
operate under a point to point organisational design, meaning that every one of their flights
they aim to make a profit off of(Belobaba et al., 2009). They operate the same aircraft for all
their routes (for cheaper maintenance and pilot training costs), so consequently, this means
that sometimes they have to fly with half-empty planes to maintain a scheduled route
(Belobaba et al., 2009). In comparison with full-service carriers, which have a wider range of
aircraft and can therefore assign different sized aircraft to fit the needs of the scheduled
number of people on a flight. The service customers want dictates how the airlines will
proceed when making route decisions.

The size of the population is another consideration airlines need to take into account when
making route decisions as the population will directly impact on the number of customers
travelling. Having routes based around large cities’ airports allow airlines to have on average
more full flights, as there are more people than in smaller isolated cities or towns (Hanlon,
2006).

Demand for a service is the most significant practical consideration that shapes airline route
decisions. If there is no demand for the route, then there is no point in an airline having that
route option available. Destinations with extensive tourism industries are the most popular
for travel and airlines must incorporate routes to and from these destinations (de Neufville
et al., n.d.). However, with some of these tourism hot spot destinations, only have seasonal
demand. Meaning airlines need to shape the routes to have a larger number of flights to

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these places in their peak season and have fewer in the offseason when the demand to
these places is not so high.

3. How do the costs of operating large vs. small and long-haul vs. short-haul aircraft
differ for airlines? 

Operating small aircraft primarily meant operating more frequent flights over shorter
distances, and operating large aircraft usually coincided with fewer flights over longer
distances. However, as times are changing and consumers expectations with it, customers
are using air transportation as simply a means of getting from one place to the next, rather
than what it used to be, an experience in itself. Modern technology is allowing for bigger
engines which means faster planes. Cutting down the time passengers spend onboard
allows for cost-saving measures to be taken by the airlines, allowing for long-haul low-cost
carriers to become the new proposed idea for future air travel (Wensveen & Leick, 2009).

The costs of low-cost carriers and their strategies to keep costs to a minimum differ from
those of full-service carriers. Low-cost carriers have one type of aircraft that they use for all
of their routes and flights (Pels, 2008). They are typically single-aisle narrow-body planes
that are utilised much more frequently and with less time on the ground between flights, as
they only make money while in the air flying passengers (Pels, 2008). By operating the same
type of aircraft also allows airlines to cut costs in maintenance as their engineers only have
to be certified with one type of aircraft and they only have to buy the maintenance
components for this single type.

The costs of full-service carriers differs from those of low-cost carriers because as it states in
their name full service carriers offer the full-service. Low-cost carriers provide a basic seat
(which are usually quite closely packed together) for their passengers. In comparison, most
full-service carriers provide a seat (with varying spaciousness), a meal and drink and some
sort of luggage all included in your fare (Pels, 2008). Full-service carriers have a range of
different aircraft making up their fleet. This requires their engineers to go through more
training to get multiple aircraft engineering certifications costing the airlines more money
but allowing them to assign specific aircraft to fit the passenger requirements (Wensveen &

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Leick, 2009). Their time on the ground between flights will also be longer than that of low-
cost carriers as they will need extra time to clean and replenish the aircraft between flights,
adding further costs (cleaners and stockers).

With short-haul flights, passengers get on and off relatively quickly, and it is common they
will comprise the added comfort of full-service amenities to save themselves money and
choose to fly with a low-cost carrier (Swan & Adler, 2006). However, with long-haul flights
passengers opt to spend the extra money and fly with a full-service carrier to make their
extended flight time a more pleasant experience (Swan & Adler, 2006).

4. The practice of overbooking is systemic within the airline industry. What is it, why is
it used, and do you think it is necessary? 

Overbooking is when airlines are counting on people cancelling their flight last minute or
just not showing up for their flight at all. To prevent flights taking place with empty seats, as
this loses revenue for the airline, airlines purposely sell more tickets for a route than what
they can actually seat on a flight so when people cancel or do not show up, the aircraft is
still at maximum capacity (Gosavii et at., 2002).

Overbooking is a systematic revenue management process where airlines use data from
research carried out, to know the percentage of extra fares they can sell to coincide with the
number of expected cancellations and ‘no-shows’, so that no seat goes unoccupied on every
flight (Zenkert, 2017). Selling more fares than seats available is crucial in the airline industry
as every empty seat on a flight costs the airline money. However, it is also a balancing act
between overbooking enough seats to compensate for no-shows and cancellations, and
overbooking too many seats that you are forced to turn people away as maximum capacity
it reached or upgrading economy seats to an upper class free of charge (Nazifi, 2021). Bad
word of mouth from airlines having to turn people away can be even more harmful to airline
revenue loss than that of flying with empty seats (Wangenheim & Bayón, 2007). With
modern technology and exponential growth in the use of social media, turning someone
away because you overbooked a flight can lead to massive backlash online and this can be
very damaging to an airline’s reputation for reliability (Nazifi, 2021).

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Finding the right balance between overbooking enough to break even and overbooking too
much risking further losses both financially and in reputation is something airlines need to
master to make the best out of this system. With the correct system, overbooking is a vital
part of airline success and can be massively beneficial.

5. How and why do some airlines attempt to minimise or eliminate the influence of
unions on their workforce? 

A union is an advocacy organisation to support and negotiate on behalf of the employees of

a workplace (“Unions’” n.d.). This allows for employees to get better pay and other work
conditions that they would not have gotten without the interference of unions. Airlines that
have a large union influence, will most likely have higher-paid employees that work fewer
hours. Both of these conditions are seen as negative in the eyes of employers, hence why
airlines attempt to minimise or eliminate the influence of unions on their workforce (Verma,
2007).

Employers see unions as a cost, as unions bargain to get a better deal for the employees
who are registered members. Unions can act as a monopoly and push wages up above the
competitive rate (Medoff, n.d.). However, they can also be beneficial to employers as they
act as a place for employees to voice their opinions in a judgement-free environment about
the working conditions, and employers can target these problems and work on fixing them
(Medoff, n.d.). Making a more enjoyable and therefore more productive working
environment.

Employees see unions as a means of getting a fairer deal with workplace conditions. Unions
do the bargaining with employers for a better wage, and better working conditions such as
hours (Meng, 2006). Unionised employees gain a financial advantage over those employees
who are not unionized, which in turn can create inequality and a wage gap amongst
employees (Hirsch, 2004). However, as being a part of a union is a personal choice for
employees, the onus should not fall to the employer of creating the wage gap, as it was the
unions’ negotiations that allowed for higher pay to those registered in that union (Headey,
1970).

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For some airlines, the profit margin can be quite slim. Although unions can increase the
work productivity of employees, they can also tend to decrease profitability for employers
(Hirsch, 2004). To these airlines, decreasing profitability is something they cannot afford to
do. In an attempt to increase profitability, airlines are trying to minimise unions influence on
employees and in some cases eliminate these influences altogether. Employees seek out
unions when they are dissatisfied with working conditions, or believe they are being paid
inadequately for the service they are providing (Preventing Unions, n.d.). For employers to
reduce the number of employees seeking representation from unions, they must ensure
that the workplace is a positive environment and that they are treating the employees with
respect and paying them what they rightfully deserve (Preventing Unions, n.d.). This way
employees will feel they have been treated fairly and be less likely to want union
representation, minimising the union influence in the company.

6. What regulatory mechanisms govern the practice of collective bargaining in New

Zealand? 

Collective bargaining is the negotiation of wages and other employment conditions usually
through the help of unions so that employees get the best deal from their employers. The
employment relations act (ERA) was established in New Zealand in the 2000s, promoting
collective bargaining with trade unions in ‘good faith’ (Rasmussen, 2013). This would allow
for more productive employment relationships as both parties (employees and employers)
would get the fairest deal (Foster et al., 2011).

Many flight crew members are overworked in some cases underpaid and it is only due to
collective bargaining agreements that stops them from being overworked even more which
could lead to fatigue and diminished performance. People can opt into being a part of a
union. This union then negotiates the terms and conditions of the work environment (such
and hours and wages) with the employer on behalf of the employee who is part of the union
(Rasmussen, 2013). The ERA implemented in New Zealand in the early 2000’s states that by
law unions can only negotiate for those who are a part of a union. Although the ERA was
designed to support collective bargaining, there has been a large decrease in the number of

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New Zealander’s work that was covered by a collective agreement (Harbridge & Moulder,
2003).

Workplaces that operate with collective bargaining have seen improvements in their
employees work ethic with fewer strikes, fewer seniority issues, and more job flexibility
(Gilson & Wager, 1998). Collective bargaining promotes a positive working environment
because the unions working on the behalf of the employees have done their best to secure
the best deal for these employees. Happier employees will achieve better workplace
standards and this, therefore, benefits the employers (Gilson & Wager, 1998). Under New
Zealand’s ERA, you must be registered with a union to receive any benefits from the
collective bargaining agreements (Rasmussen, 2013). A registered union member can call
upon the union to negotiate better pay or a number of other workplace matters from the
employers (McAndrew, 2012).

Collective bargaining in New Zealand has changed and adapted over the years. The most
recent is the implementation of the ERA, which encourages good faith collective bargaining.
Meaning registered union members have better access to collective bargaining and get
better deals from these collective bargaining negotiations with employers.

7. What HRM challenges do you think non-stop ultra-long-haul flights pose for airlines? 

Human resource management (HRM) in the aviation industry is important because of how
demanding flights are on crew members and the high level of concentration required by
pilots especially (Appelbaum & Fewster, 2003). Fatigue of flight crew can result in
diminished performance due to fixation (a lack of ability to multitask), decreased motor
skills and loss of concentration (Caldwell, 2005). All of these compounded together results in
an unsafe work environment in an industry where maintaining safety standards is
paramount.

Non-stop ultra-long-haul (NSULH) flights pose HRM challenges as flight crew fatigue poses a
safety risk to all those on board. Not only are flight crew fatigued, but passengers are also
cooped up and could begin to get agitated and this is when problems may start occurring

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(Haines, 2006). NSULH flights are usually multi-crew flights. One crew will do half the flight
and then there will be another crew on board that will switch with the existing crew halfway
through the flight. This allows a new refreshed crew to take over the duties, reducing the
fatigue and the consequences that come along with it (Bauer et al., 2020). However, this
alone has come with its own HRM challenges.

When changing flight crew mid-flight messages can be forgotten to be passed on or alerts
could be missed. Coming to the end of a long shift as the first flight crew, complacency could
set in you could forget a small detail when handing controls over to the next. Another way
of compromising the safety of those on board. To manage this HRM challenge checklists
with handing over procedures are mandated in the aviation industry (Clay-Williams &
Colligan, 2015).

Safety needs to be the top priority in all airlines. With NSULH flights brings added HRM
challenges to an already complex and demanding job. To ensure maximum safety standards
are met HRM mitigation strategies are brought into action. The main HRM challenges faced
with these NSULH is the fatigue of flight crew. A mitigation strategy of multiple crews allows
for the risks associated with fatigued flight crew members to be eliminated as a new crew
comes in halfway through the flight and takes over duties. Although this switching of crews
has HRM challenges as well. Latent human errors can occur when switching crews, including
mixed or missed messages and missed alerts. However, with the mandating of checklists in
the aviation industry, the risks of these occurring is minimised.

8. What are the key sources of aviation biofuels and how widespread is their use within
the global airline industry

Renewable energy and biofuels are becoming the way of the future as current non-
renewable energy and fossil fuels are unsustainable and destroying the planet with their
toxic waste and large harmful greenhouse gas emissions. Global warming is continuing to
occur at an exponential rate, and with the aviation industry producing 13% of the world
transport emissions, biofuels are the only sustainable option for the future of the aviation
industry (Capoccitti et al., 2010).

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The global transportation industry makes up around 80% of the world’s emissions, and 13%
of those emissions come from the aviation industry (Capoccitti et al., 2010). The rapidly
growing aviation industry means a growing rate of greenhouse emissions, which equates to
a larger carbon footprint for the aviation industry. In order to reduce these emissions
aviation industries have been looking into developing and using biofuels as a sustainable
option. Oslo airport in Norway, was the first airport to offer biofuels for all airlines allowing
them to decrease their own emissions by 10-15% (Baxter et al., 2020). Their government has
also started enforcing that jet fuel be mixed with 0.5% of advanced biofuel since 2020
(Baxter et al., 2020).

Key sources of biofuel in the aviation sector are advanced generation biofuels, solar cells,
and non-combustion hydrogen fuel cells (Capoccitti et al., 2010). Since the first flight of a
biofuel-kerosene mix in 2008 airlines all over the world have been testing new more
sustainable alternatives to petroleum fuels (Mousavi & Bossink, 2020). As fuel costs are one
of the main expenses in airlines, finding a biofuel that is both environmentally and
economically sustainable is a major consideration that airlines need to take into account
when looking for alternate fuel sources (Kousoulidou & Lonza, 2016).

Many countries’ governments are implementing laws for when biofuels must be used
and/or a percentage of how much biofuels need to be used in the future aviation industry.
With the combination of politics and peoples own climate concerns, the aviation industry
will only be able to continue to grow with the implementation of biofuels. With sustainable
renewable energy as the source of biofuels, further development by aviation fuel specialists
will allow for biofuel to be the future of airlines and will help to dramatically reduce the
aviation industries carbon footprint. A step in the right direction of reaching the goal of
carbon-neutral air travel by 2050 (Mousavi & Bossink, 2020).

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