Air Transportation
Sources
"AvStop » Number One Online General Aviation News and Magazine." AvStop » Number
One Online General Aviation News and Magazine. N.p., n.d. Web. 12 Aug. 2012.
<http://avstop.com/>.
Coyle, John Joseph, Edward J. Bardi, and Robert A. Novack."Air Carriers."Transportation. 4th
ed. St. Paul/Minneapolis: West Pub., 1994. 191-210. Print.
"FAA: Home." FAA: Home. Federal Aviation Administration, 2 Apr. 2012. Web. 11 May 2012.
<http://www.faa.gov/>.
Horonjeff, Robert. "Historical Review of the Legislative Role in Aviation."Planning and Design
of Airports. 5th ed. New York: McGraw-Hill, 2010. 17-36. Print.
"Kentucky Transportation Cabinet - KYTC." Web. 26 Apr. 2012.
<http://transportation.ky.gov/Pages/default.aspx>.
"United States." Delivery Service from UPS.N.p., n.d. Web. 10 Aug. 2012.
<http://www.ups.com/content/us/en/index.jsx?flash=false>.
History/Overview

December 17, 1903: Wilbur and Orville Wright made their 1st flight and sold
invention to the federal government

1905: first practical plane was built

1908: Beginning of air transportation development. Mostly due to US Post Office
wanting to try to start an air mail service

Passenger service developed as a by-product of the mail service

Air is ideal for long distance passenger travel when time is factor

Speed and competitive pricing led to growth of air transportation

Reliable on passenger revenue for financial viability

Small share of freight ton-mile but is important in carrying high-value goods,
perishable goods, and in emergency situations
Legislative Acts
Air Commerce Act of 1926
Civil Aeronautics Act of 1938
Federal Airport Act of 1946
Federal Aviation Act of 1958
Creation of the US Department of Transportation – began function April, 1967
Airport and Airway Development Act of 1970
Airline Deregulation Act of 1978
The Airport and Airway Improvement Act of 1982
The Aviation Safety and Capacity Act of 1990
AIR-21: The Wendell Ford Aviation Investment Act for the 21st Century
The Aviation and Transportation Security Act of 2001
Vision 100 Century of Aviation Act of 2003
NextGen Financing Reform Act of 2007/FAA Reauthorization Act of 2009
Deregulation

Eliminated economic regulation of passenger airline industry

Intended to increase competition in the airline industry

1978-1985: phase out regulatory control, Civil Aeronautics Board was to be abolished by
1985

Air carriers could freely enter without having to apply to CAB, no longer depended on
CAB to determine operating and fare schedules

Air carriers freely entered new markets, increased number of markets served, increased
competition and lowered overall airfares
CAB

Civil Aeronautics Board

Operated from 1938-1985

Regulated routes and fares for the airways and its carriers

Was abolished during deregulation
FAA

Began operation December 31, 1958

Replaced CAB

Department within US DOT

“Our mission is to provide the safest, most efficient aerospace system in the world. Learn
more about how our mission is accomplished, the history of the FAA, and opportunities
for the public to do business with the FAA”
Type of Carriers
Private: a firm that transports company personnel or freight in planes that it owns or leases

emergency freight is sometimes carried

subject to safety regulations by Federal Aviation Administration
For-hire: not regulated on an economic basis by the federal government

Revenue Classes
Majors – annual revenue of more than $1 billion
Nationals – annual revenue of $75 million to $1 billion
Regionals – annual revenue of less than $75 million
-Majors  high-density corridors, high-capacity planes, provide service between
major cities and/or populated areas, serve medium sized population centers, ex:
Delta, United, USAir, and American
-Nationals  operate between less populated areas and major population centers,
scheduled service over short routes with smaller planes. “feed” passengers from
outlying areas to airports with majors, ex: Southwest Airlines, America West
-Regionals  operate within a particular region of the country (Midwest, New
England) and connect less populated areas with larger population centers, two
categories: large ($10-75 million) and medium (less than $10 million), ex: North
American, Aspen, and Sun Country

All-cargo carriers: transports primarily cargo
o Deregulated 1977 permitting all-cargo carriers to set rates serve routes, and
use any size plane dictated by the market
o Ex: Federal Express (FedEx)

Commuters: regional works with certified carriers to connect small communities that
have reduced or no air service with larger communities that have better scheduled
service

Charters: use larger planes to transport people or freight, carrier charters entire plane
to transport a group of people or cargo between specific origins and destinations,
major customer is Department of Defense to transport personnel and supplies, major
decrease in numbers after Vietnam War
Competition

Limited intermodal competition from automobiles for passenger service but mostly
limited because of the fact that air offers a unique service (long-distance and time
sensitive)

Intramodal: very competitive, increased significantly since deregulation in 1978, more
carriers entering meant more competition
o As competition increased planes had excess capacity (too many flights and seat
miles on a route) so they had to discount and lower rates to fill empty seats
o Operating costs have continued to rise but carriers have continued to lower prices
to fill seats and this has results in a reduction in carriers (going out of business)
especially in low-density routes/low population areas who need it most
o Competition for flight times: 7-10 am and 4-6 pm are the most frequent

Cargo Competition
o Some carriers offer door to door service directly to trucking to overcome their
limited accessibility
o There has been an increase in freight traffic in an attempt to fill excess volume
from reduced passenger patterns and due to an increase in the volume of express
carrier traffic
o Majority of freight carried is high-value/emergency shipments
o Commodity examples: mail, clothing, communication products and parts,
photography equipment, high-priced livestock, race horses, jewelry, and
expensive automobiles

NOT  basic raw materials such as coal, lumber, iron ore, or steel
Terminals

Public
o Financed by government
o Carriers pay for use through landing fees, rent and lease payments for space, taxes
on fuel, and aircraft registration taxes, users pay taxes on tickets and air freight
charges

Hub Systems: lesser populated areas are fed to hub where connecting flights are available
o Ex: Chicago is a hub for United Airlines, flights from Toledo and Kansas City go
here where there are connecting flights to New York, Los Angeles, and Dallas
o Similar to trucking’s break-bulk terminal – service passengers with smaller planes
on low-density routes, feed to hub where they are then assigned to larger planes
and high-density routes between the hub and major metropolitan area airports

Basic Terminal Operation: passenger, cargo, and aircraft servicing; passengers are
ticketed, loaded, unloaded, and luggage is dispersed and collected; cargo is routed to
planes or trucks for shipment to destination; aircraft servicing includes refueling; loading
of passengers, cargo, luggage, and supplies; and maintenance; major maintenance is done
at specific airports
Cost Structure

80% variable, 20% fixed

Low-fixed cost because of government (state and local) investment and operations of
airports and airways, carriers pay for use of these facilities through landing fees, which
are variable in nature

Variable: flying operations, maintenance, general services and administration (passenger
service, aircraft and traffic servicing, promotion and sales, and administrative),
depreciation

Increase in competition has forced airlines to operate more efficiently by cutting costs
where possible and to decrease labor costs since airlines tend to be more labor intensive

Fuel: increasing cost, demand for more efficient planes, some routes that are not cost
effective have been eliminated or smaller planes are being used
Labor

1/3 of total cost

Pilots, co-pilots, navigators, flight attendants, office personnel, and management

Union workers are paid more

Pilot wages depend on experience and equipment rating (size of plane)
*Cargo Pricing is depended on weight
Load Factor
  =
  
100
   

Measures the percentage of a plane’s capacity that is utilized, usually 62-65%

Type of plane (capacity) and route affect load factor as does price, service level, and
competition
Issues

Safety

Technology: constant need for efficient systems

High Costs

Accessibility
UPS

Founded: August 28, 1907 in Seattle, Washington

Fastest-growing airline in FAA history and is one of 10 largest airline in the US today

Main US Air Hub located in Louisville, KY. Began operation in 1982.

Jet Aircraft Fleet: 226

Chartered Aircraft: 292

Airports Served: Domestic – 382; International – 323
Kentucky Air
•
Over 2.4 million passengers a year
•
13.1 billion pounds of freight a year
•
62 airports
– 6 major ports (Louisville, Lexington, Paducah, Owensboro, Somerset, Hebron)
– 3 major hubs (Delta, DHL, and UPS)
•
<1% within state, from state, to state (by weight), freight movement by tonnage
Airport Design Basics

Steps and factors involved

Runway Length
o Methods to determine length
o Terms
o Equations
o Environmental factors
o Aircraft specifications

Airport Configurations
o Factors to consider
o Runway configurations

Airspace
o Purpose
o Imaginary Surfaces
Sources
"AvStop » Number One Online General Aviation News and Magazine." AvStop » Number
One Online General Aviation News and Magazine. N.p., n.d. Web. 12 Aug. 2012.
<http://avstop.com/>.
Coyle, John Joseph, Edward J. Bardi, and Robert A. Novack."Air Carriers."Transportation. 4th
ed. St. Paul/Minneapolis: West Pub., 1994. 191-210. Print.
"FAA: Home." FAA: Home. Federal Aviation Administration, 2 Apr. 2012. Web. 11 May 2012.
<http://www.faa.gov/>.
"Freight Modes in Kentucky." Kentucky Transportation Cabinet, Apr. 2011. Web. 26 Apr. 2012.
<http://transportation.ky.gov/Planning/Documents/Freight%20Modes%20in%20Kentucky.pdf>.
"Kentucky Transportation Cabinet - KYTC." Web. 26 Apr. 2012.
<http://transportation.ky.gov/Pages/default.aspx>.
Horonjeff, Robert. "Historical Review of the Legislative Role in Aviation."Planning and Design
of Airports. 5th ed. New York: McGraw-Hill, 2010. 17-36. Print.
Horonjeff, Robert, and Francis X. McKelvey. Planning and Design of Airports. 4th ed. New
York: McGraw-Hill, 1994. Print.
"United States." Delivery Service from UPS.N.p., n.d. Web. 10 Aug. 2012.
<http://www.ups.com/content/us/en/index.jsx?flash=false>.
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Air Transport Outline