AIRLINE BUSINESS REVIEWER MIDTERMS 1
area of the country.
Topic 3: Air Industry I- Management Structure
and Specialized Tasks in Airline Operations
Structure of Airline Industry and Management
Organization
• Civil aviation includes all airline flights and
services offered to the traveling public (Purzycki,
2001).
• In the aviation industry, we can identify the
three main stakeholders:
1. Aircraft manufacturing industry
2. Airlines
3. Airports
AIRLINE BUSINESS MODELS
1. BASIC CIVIL AVIATION CATEGORIES
A. Scheduled airlines
• Offer regularly timed flights over prescribed
routes and published timetables.
• The majority of passenger flights are on
scheduled airlines.
The scheduled airlines fall into three major categories:
(based on revenue it generates) major and national
carriers, regional carriers, and commuter carriers.
1. major and national carriers
• Also called trunk airlines, or full-service carriers,
focus on long-distance or long-haul routes.
• Flag carriers also fall under this category.
• Major airlines serve major city airports in
addition to international destinations. In United
States, airlines generating more than $1 billion
in revenue annually are categorized as a major
airline.
2. regional carriers
• Provide air service between smaller cities and
also connect these small communities with
major airports.
• They operate between points within a specific
• In US DOT, regional carriers are subdivided as
large, medium or small depending on gross
revenue and whether they hold a certificate of
public convenience.
Types of Regional airlines
a. Large regionals are certificated carriers with
annual gross revenues between $10 million and $99
million.
b. Medium regionals are certificated carriers with
annual gross revenue of less than $10 million.
c. Small regional airlines don't have a set revenue
definition but are usually referred to as "commuter
airlines" and they are non-certificated (no aircraft
operators' certificate or AOC). Small regional
carriers are airlines using aircraft seating less than
60 passengers. Operate shuttle services between
smaller airports that cannot support the major
airlines and equipment.
B. Charter or Supplemental Airlines
• Fly routes and schedules that are not flown by
the scheduled airlines. They are considered to
provide additional or supplemental service to
the major airlines.
✓ Charter airline flights do not have standard fare
structures
✓ No set flight schedules as it operates for the
exclusive usage of passengers who requested the
service based on demand.
✓ Seats on public charter sometimes are offered
thru travel agencies in promotional tours, utilizing
the chartered flights inclusive of the tour package.
2. BASED ON PRODUCT OFFERINGS AND VALUE-
ADDED SERVICES
A. Full-Service Carriers
Basically, the Full-Service Carriers, which are
scheduled airlines and developed from national flag
carriers, have the following basic characteristics:
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✓ utilizes the 'hub and spoke' connection
✓usually, members of Alliances and other
partnerships.
✓Fares are inclusive of in-flight services and other
amenities.
✓ they are using Global Distribution system (GDS) or
other external airline computer reservation systems.
✓sales channels are extensive including usage of
intermediaries such as travel agencies
✓ its product differentiation, pricing and Yield
Management system is advanced in support of its
network revenue maximization.
B. Chartered Airlines
Do not have standard fare structures.
• No set flight schedules provide essential public
services.
• Seats on public charter sometimes are offered
through travel agencies in promotional tours,
utilizing the chartered flights inclusive of the
tour package.
C. Low-Cost Carriers
• Also known as 'no-frills' airlines that cater to
passengers wanting cheap airfares with little
demand for inflight services. To achieve its
selling point of low fares, the following
elements are being utilized by LCCs differing
from the traditional airlines.
✓ Use of Secondary airports to decrease airport
fees and charges,
✓'Single-aircraft fleet' - only one or two aircraft
types are utilized to cut down repair costs and
manpower training costs
✔ No outsource GDS nor travel agents/
intermediaries as it sells directly online
✓ Maximizing sales on ancillary services such as
luggage charges, in-flight food and beverages, and
advertising space.
3. OTHER AIRLINE BUSINESS MODELS
A. AIR CARGO CARRIERS
are a special form of an airline business model.
a. Network carriers have their own cargo fleets
(e.g., Malaysia Airlines Cargo, Lufthansa Cargo).
These companies ship cargo to their freighters as
well as in the cargo compartments of their
passenger fleet.
b. whereas in the field of Air cargo carriers, some
airfreight-only carriers exist (e.g., FedEx, DHL).
B. SHUTTLE AIRLINES
• Caters mainly to business travelers seeking
movement between two major city centers.
• The shuttle concept is similar to a conventional
bus service offering reasonable airfare with no
reservation.
• High frequency and easily remembered times
are typical attributes of a shuttle.
Learning Checks:
1.Delta Airlines, Alaska and American Airlines, all USA
airlines posted more than $1 billion in a year, thus under
FAA, which category do they fall? Major airlines
2. DHL and FedEx are both shuttle airlines.
False - Cargo Airlines (airfreight-only carriers)
3.This type of airline business model caters to
passengers wanting cheap airfares with little demand
for inflight services. Low-Cost Carriers
4.Air Canada hourly flight between Toronto and
Vancouver with flight duration of 45 mins. SHUTTLE
AIRLINES
5.Passengers can choose their seats upon reservation
without additional charge Full-Service Carriers
(Fares are inclusive of in-flight services and other
amenities)
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TYPES OF FLIGHT SERVICES
1. Non-stop flight
• Flight which operates between a board point
and an off point in a single leg without any
intermediate landings (IATA,2010).
• Means the passenger gets on the plane from
origin, and without any transfer nor in between
stopover points, the plane lands to its final
destination.
• A flight with no intermediate stops with the
same flight number and aircraft.
TG 621 D MNL 1 BKK 1305 1520 0
0 = non-stop flight
621- Flight Number
1305- Departure Time
1520- Arrival Time
0- stop flight number
2. Direct flight (Through flight or Direct Service)
• Any flight ticketed as a single flight coupon,
irrespective of whether there are enroute stops
and/or changes of aircraft types. (ATA 2010).
• Means the passenger gets on one aircraft from
origin and with or without stopping any other
points, lands to its destination with or without
changing plane using single ticket coupon.
• Ex. Flight no. PR147 from Manila to London,
makes a fuel stop in Dubai, this flight will still be
considered a direct flight Manila- London
3. Connection flight
• Air service between two cities that contains one
or more immediate stops during which the
passenger changes aircraft and flight no.
• Passenger boards a plane in point of origin, then
before arriving at the final destination,
passenger boards another plane in a connecting
point with less than 24 hours stay at that point.
Types of Connection flights
1. On-line Connection
• A connection with a change of aircraft and flight
number within the same airline
• Ex. Manila to Los Angeles via Hongkong on CX
CX 930 MNL HKG 1235 1515 0 CONNECT HKG
CX 882 HKG LAX 1645 1455+1 O
2. Off-line or Interline Connection
•Connection with a change of aircraft and flight number
between two different airlines
Ex. Manila to Dallas via Seoul on PR/OZ
PR 230 MNL SEL 0940 1315 0 CONNECT SEL
OZ 332 SEL DFW 1445 1555+1 0
Learning Checks:
1. PR321 Y 12MAR MNL HKG 0800
CX233 Y 12MAR HKG LAX 1210
Answer: Interline connection Flight
Feedback: connection with change of aircraft and flight
no. bet. 2 different airlines.
2. MH087 Y 01JUN MNL KUL 2100
MH138 Y 02JUN KUL LON 0800
Answer: On-line Connection Flight
Feedback:
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Connection with a change of aircraft and flight number •Expensive fare but also offers more amenities to
within the same airline travelers than the lower class of service. Business class
seating is important to airlines wanting to attract
business travelers willing to pay a high airfare.

3. AI 118 MNL DEL 1750 2010 0

3. Economy Class
Answer: Non-stop flight
•Coach, standard, main cabin, or "cate class"
Feedback: No intermediate stops with same flight no.
and aircraft •The Airline travel class with the lowest sovet price
because the level of comfort is lower than that of the
4. Which of the following airlines will take this route on
other classes.
an online connection? HKG/SEL/SFO
•The seats here are the narrowest, ranging from 16
Answer: OZ
inches to just over 19 inches wide and the seat pitch,
Feedback: Hub: SEL the distance from one seat to the seat in front or behind
it-what travelers often refer to as "legroom" ranges
5. Which of the following airlines on on-line connection from 30 inches to 34 inches.
will take this route SIN/LON/YTO?
Note:
Answer: (BA)
• The type of seating configuration or
Feedback: Hub: LON compartment is different from Booking Class.

• To illustrate economy seats are not only

TYPES OF SEATING available in Y class in reservation system, but
some other booking class, i.e., W for Economy
Class of Service Premium while B, Q, H are just some of the lists
1. First Class of economy discounted booking designators
2. Business Class which is selected depending on your airline
3. Premium Economy ticket's fare type code.
4. Economy Class

Class of Service:

1. First Class

•The first-class section of an airplane is the class with

the best service, and is typically the highest priced

• Available on only a small number of long flights. 3. Premium Economy

Passengers in this class have a separate check-in
counter, access to the airline's first-class lounge.
•First class is being removed and replaced with
increased business class seating and increased economy
class seating
2. Business Class
•Originally intended as an intermediate level of service
between economy class and first class.
•Offers wider seats and more legroom at a comfier price
than business or first class on most airlines. Some
airlines categorize economy and premium economy
under the main cabin.
•Typically, physically partitioned on international and
some long-haul flights, the "premium" in premium
economy is the added space and sometimes location of
seats in more desirable locations, like the front of the
aircraft

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•On international flights, premium economy may not
only be physically separate from economy class, but it
may also offer additional perks like complimentary or
better food, a greater baggage allowance and amenity
kits.
•Premium economy often refers to the "better" seats on
an aircraft on domestic flights.
Amenities
Food and Bar
• Major airlines or Full-service Carriers serve meals and
beverages on-board and at the airport lounge for
business class and first-class passengers. However,
meals are not inclusive of the fare in Low-cost carriers.
Entertainment
•Most aircraft are equipped with various types of in-
flight entertainment offered but will of course add to
the airline expense.
management are commonly used in business to
distinguish the levels of management within an
organization. Unfortunately, there is no clear definition of
each level, and meanings attached to the terms
sometimes differ from one company to another. However,
firms will have these levels of management:
➤ Top management is generally considered to be the
policy-making group responsible for the overall direction
of the company.
➤ Middle management is responsible for the execution
and interpretation of policies throughout the
organization; and
➤ Operating management is directly responsible for the
final execution of policies by employees under its
supervision.
- END –

However, the usual long- range aircraft has this offering.

Cargo and Freight Note: Credits to ishe’s reviewer link. This reviewer is for
Midterm quiz 1.
•Most major airlines offer cargo bookings, together with
passenger service.

•Making sure that the type of aircraft is suitable, “Goodluck sa quiz!! You can do it!!” – Jesa
considering the limitations of space and cargo
dimensions.

AIRLINE MANAGEMENT AND ORGANIZATIONAL

STRUCTURES

LEVELS OF MANAGEMENT

• Management is the process of achieving an

organization's goals through the coordinated
performance of five specific functions: planning,
organizing, staffing, directing, and controlling.

• Three (3) levels of management:

1. Top Management

2. Middle Management

3. Operating Management

•Wensveen (2016) states that "terms such as top

management, middle management, and operating
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