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AVSC 2150: Aircraft Trends/Airline Business Models/Airline Marketing Agreements/Deregulation & Liberalization/Industry Structure/International Organizations & Associations/International Regulatory Framework/Market Forces
Terms in this set (92)
What competitive market structure best characterizes the civil transport aircraft manufacturing industry?
Boeing's acquisition of McDonald Douglas was largely the result of?
Several high profile aircraft accidents
The catalyst leading to the development of the B787 and A380 was what?
Airport congestion and constrained operational capacity
How many seats are regional aircraft typically configured for?
How many seats are narrow-body aircraft typically configured for?
How many seats are wide-body aircraft typically configured for?
What commercial aircraft is best suited to accommodate business demand during a period of economic growth?
What commercial aircraft is best suited to accommodate leisure demand during a period of economic growth?
What will happen at European continental hub airports if the growth rates in air travel over the past 20 years extend to the future?
they will be unlikely to be able to sustain the level of growth without some way of increasing passenger throughput per aircraft movement
Why were middle-east based airlines responsible for the bulk of orders for the A380?
They wanted to become a hub for the world
What is the primary advantage of the A380?
lower CASM by spreading cost across more passenger
What was Airbus's strategy for designing the A380?
Minimizing airside congestion at major hub airports
Boeing came up with the 787 for what purpose?
Bypassing hubs with non-stop flights
Why have airlines replaced 50 seat RJs with newer E-190/195 CRJ 1000?
Newer aircraft are more fuel efficient and economical
What has been the consequence of airline replacing 50 seat RJs with newer E-190/195 CRJ 1000?
Increased ASM with fewer flights
What was Boeing's strategy to not cede the long-range, very large transport aircraft market to the A380?
Which of the following is a pro of the A380?
Less total airport landing fees
What was Airbus's strategy to not cede the wide-body aircraft market to the B787?
What Federal Aviation Regulation covers scheduled, certificated aircraft operators?
What is a characteristics of a "network carrier," "legacy carrier," or "full service carrier" entail?
Having large domestic and international networks
What type of routes do low cost carriers (LLCs) typically operate?
short-haul flights to secondary airports through a point-to-point network with a single aircraft fleet type
Which description best describes the philosophy of "low-cost carrier?"
minimizing operational costs
The network strategy where an airline connects the passengers of distant points through one focal point?
Hub and spoke
The network strategy where an airline connects one location to another without a connection?
Point to point
What airline model is characterized by operating a mixed fleet of narrow and wide body aircraft in large hub and spoke networks?
What airline business model is characterized by operating a common fleet of narrow body aircraft on point-to-point domestic, short haul routes from secondary airports?
Low cost carriers
What airline business model is characterized by operating aircraft with less than 100 seats on spoke routes under capacity purchase agreements?
Where do scheduled charter airlines typically operate?
Vacation and leisure destinations
Which of the following answers is NOT true about the hub-and spoke system?
It results in more nonstop frequencies and higher yields
Code Shares generally serve three purposes, what is NOT one of them?
Increase yield for the operating carrier
The most integrated form of airline marketing agreement is?
Capacity purchase agreements
Multilateral agreement between IATA airlines to ticket the flight of another carrier on the issuing carrier's ticket stock or "plates" are known as?
What is the most basic form of airline marketing agreements?
What is an interline agreement?
A multilateral agreement between IATA airlines to ticket the flight of another carrier on the issuing carrier's ticket stock or 'plates'
What Agreement is typically between regional and network carriers for services on the feeder routes to hub airports?
Capacity Purchase Agreement
What airline marketing agreement is a bilateral agreement between airlines to coordinate flights on specific routes?
Code share agreement
A unilateral code share is characterized by what?
Only the operating carrier serves the market
What was an impact observed in the decade following airline deregulation of the US domestic market?
Influx of carriers, bankruptcies, and mergers
Which of he following was NOT an outcome of the Airline Deregulation Act of 1978
A decrease in air service as a result of airline cost cutting
The Airline Deregulation Act of 1978 did not remove regulation on what aspect of commercial aviation in the US?
What was introduced as part of the Airline Deregulation Act to address concerns over reduced service for small markets?
Essential Air service program
What did airlines wishing to add new service have to demonstrate to the CAB under regulation?
Public convenience & necessity
Which of the following was NOT a motivation for deregulation?
Fewer restrictions on international travel
What type of agreements protected nearly one third of the three big airlines' capacity under regulation?
Capacity Limitation Agreements
What were critics of deregulation afraid of?
That unregulated airlines would cut corners on maintenance and decrease passenger safety
What was the underlying theme of deregulation?
After deregulation, some international air carriers thrived while others died out. Which of the following was a common trait of those who thrived?
They had enough domestic traffic to support international flights
As a result of deregulation, what ultimately happened to airlines such as Pan American, TWA, Branniff and Eastern Airlines, when they faced the new competitive environment?
They were acquired by smaller domestic airlines
What fear that critics of deregulation had prior to 1978 materialized in the years following the US Airline Deregulation Act?
Increased competition would drive many airlines out of business resulting in only a few airlines dominating the US domestic market
What was the reason for liberalization in Europe was a slower process than deregulation in the US?
Liberalization is an intentional process of continual change
Who has been the primary benefactor from US airline deregulation?
The Liberalization stage of development is characterized by what?
The gradual shedding and partial relaxation of regulations
What is an oligopoly?
An industry comprised of few firms
What stage of the regulation cycle stabilized the beginning of the aviation industry?
What characteristic of LCC's have network carriers NOT embraced?
What was the long-term vision of long-haul low-cost carriers?
Connect LCC's on continents around the world
What group does IATA represent?
Which stakeholders does ICAO represent?
What purpose does the International Civil Aviation Organization (ICAO) serve?
Publish technical standards and practices and help in shaping regulations of national civil aviation authorities
What purpose does the International Air Transport Association (IATA) serve?
Supports aviation with global standards for airline safety, security, efficiency and sustainability
What is a 'flag carrier'?
A designated international carrier of a country
What international aviation convention established the International Civil Aviation Organization (ICAO)?
Chicago convention of 1944
What international aviation convention established states sovereignty of the airspace above their territory?
Paris Convention of 1919
What international aviation convention established first and second freedoms of the skies as basic rights among signatories of the multilateral International Air Services Transit Agreement?
Chicago convention of 1944
The 1st Freedom provides what right?
The right to overfly another country without landing
The 2nd Freedom provides what right?
The right to technical stops in another country for purposes of maintenance, refueling, etc
The 3rd and 4th Freedoms provide what right?
The right to transport traffic between an airline's home country and another country
The 5th Freedom provides what right for airlines?
The right to transport traffic between two countries on continuing flights originating or terminating in the home country
In the US, the regulatory role of aircraft airworthiness, maintenance, licensing, certification and infrastructure, falls under which organization?
What is cabotage?
The right to transport passengers between locations inside a country other than the airline's home country
Which of the five freedoms of the air are most commonly negotiated between nations?
3rd through 5th
What was significant about the Bermuda I agreement that was negotiated between the US and the UK?
It would serve as the model for other bilateral agreements to follow
What is the primary role of the NTSB?
To investigate probable cause of transportation accidents and suggest recommendations to improve safety
What was significant about the signing of open skies bilateral agreements?
They granted anti-trust immunity permitting US airlines to coordinate with partner airlines internationally
What did the granting of anti-trust immunity do for US airlines?
Allowed US carriers to closely coordinate routes, schedules and pricing with foreign partner airlines
What government entity grants anti-trust immunity?
In 1978, the US signed the statement on International Air Transport Negotiations announcing the intention to press ___________ of international markets
Why were early open market bilateral agreements crucial to domestic airlines?
They opened the global economy, allowing domestic carriers to travel internationally
After liberalization of international markets in 1978 the US began renegotiating existing bilaterals to liberalize restrictions. Which of the following were not negotiated in the existing bilaterals?
After the US introduced Open Skies bilateral agreements, other countries renegotiated their own existing bilateral agreements. What was the main reasoning for this?
To avoid being disadvantaged relative to US carriers
Early open market bilateral agreements favored who the most?
EU policy allows up to __ percent ownership and control of carriers by non-EU citizens?
The US-UK Bermuda I Agreement in 1946 and the Bermuda II Agreement in 1977 set the model for the US-EU bilateral agreements of the 1990's known as what?
Which of the following does the US and EU NOT maintain restrictions on under the current Open Skies multilateral?
ASEAN Multilateral Agreement on Air Service and the ASEAN Multilateral Agreement on the Full Liberalisation of Air Services of 2009 opened up all routes to carriers of the 10 members of what geographical region?
This agreement signed in 2007 replaced existing bilateral between US and EU member nations and allowed any EU community carriers to operate from any point in the EU.
Open Skies Multilateral Agreement
Phase 2 of the US-EU Open Skies Multilateral Agreement signed in 2010 had what effect?
Made the Phase 1 agreement permanent
Economies of scale refers to:
The average cost of operation decreases as an airline grows
Mutual dependence is characterized by:
one competitor affecting all the others
Which factor is an external influence on worldwide air travel?
What is an oligopoly?
An industry with few firms producing a commoditized product
Changes in world revenue ton kilometers (RTKs) tend to move in direct relationship to changes in ____?
Gross Domestic Product (GDP)
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