Homework aviation

Airline Operations

Assignment Chapter 7 Part 2

1. What is the competitive advantage of schedule frequency? How does it lead to excess capacity? Describe the effect of excess capacity on pricing.

2. Many industries are sensitive to fluctuations in the economy. How does the airline industry differ? How is it different to furlough employees in the airline industry versus the automobile or soft-drink industry?

3. Why has the airline industry been subject to greater government regulation than other oligopolistic industries?

4. Define load factor. What is the relationship between load factor and costs per unit? Explain. Why have load factors increased in recent years? Why are all public transportation modes subject to traffic peaks and valleys? How do positioning flights affect load factors?

5. Why can’t airlines fine-tune capacity to match demand? Define no-shows. When load factors approach 80 percent or higher, we can expect some passengers to be turned away. Why? What is overbooking? Off-peak pricing?