Summary Lectures Travel Transportation Aviation
Week 1 Business Models in Aviation (8 questions)
Tourism System  Transit Regions & Tourist Flows
Chicago Convention 1944
A document known as the Convention on International Civil Aviation
IATA: International Air Transport Association
Supports aviation with global standards for airline safety, security, efficiency and
sustainability.
ICAO: International Civil Aviation Organisation
A united nations organisations that has been existed for purposes of controlled air traffic
Business models in Aviation
After WW2: Scheduled Services
After 60’s: Rise of charter companies (Transavia Holland)
During and after 70’s: Rise of package holiday
After 80’s: Low-cost Airlines Emerge
- 1978 in North-America
- 1997 in Europe
FAA: Federal Aviation Administration
After deregulation, unfettered free competition ushered in a new era in passenger air travel
Global Alliance Membership
Oneworld
- American Airlines
- British Airways
Skyteam
- KLM
- Air France
- Delta Airlines
Star Alliance
- United Airways
- Lufthansa
For customers:
- Prior to Alliances, global travel was complex and inconvenient
- Frequent flyer benefits, including lounge access, did not extend beyond and
individual airline
For the airline:
- Increasing competition from no-frills/low-cost carriers
- Open Skies and Antitrust Immunity grants allow schedule, price, and product
standardization and harmonization
Network Carriers
Geo-focused Network (Austrian Airlines / Alaska Airlines)
- Concentrate operations in one geographic region
- High frequency
- Limited flights to other areas
- May join alliances or codeshare (buy a ticket KLM but fly with AirFrance)
Intercontinental Network (United Airlines / Lufthansa)
- Cover entire domestic market
- Hub-and-spoke network sometimes with multiple hubs (HUB = central airport)
- Routes to multiple global markets
- Participate in global alliances
Global Luxury Connector (Emirates / Singapore Airlines)
- Significant global reach
- Luxury service and product
- Long-haul with one primary hub and select 5th Freedom routes
- Capitalize on hub location to capture 6th freedom flows
- Alternative to non-stop service
Independent / Network Extender (Skywest / AeroMexico)
- Primarily extends reach of partner carriers into smaller markets
- Operate under co-brand, codeshare, or pro-rate agreements
- Occasionally subsidiary of larger carrier
Low-cost carriers
Ultra-Value (Spirit Airline / Ryanair / WIzzair)
- Aggressively stimulative pricing
- ‘Seat-only’ product; charge for extra other services (e.g. checked bags)
- Leisure customer focus
- Serve secondary airport
Traditional Value (SouthWest Airlines / Easy Jet)
- Point-to-point service
- High frequency
- Target leisure and price-sensitive business travelers
- Serve secondary and primary airports
Modern Value (JetBlue / Virgin Blue)
- Point-to-point and network
- Target a mix of business and leisure travelers
- On-board product frills superior to competitors’ Economy Class (e.g. LiveTV, XM
Radio, Pitch)
- Often serve primary airports
Charter Carriers
Charter (TUI)
- Focus on unscheduled service with some scheduled operations
- Significant reliance on touroperators selling vacation packages
- Target customers often agnostic to branding of airline component of vacation
package product
Week 2 Charter (Transavia)
In essence it is a rented or leased plane by a tour operator
Rise of the package holiday in the 60’s and onwards
1. People got more time of
2. People had more money to spend
End of the 70’s: one flight: one tour operator
Until mid 80’s: one flight: two tour operators
Within less than 15 years commercial risks were shifted from the tour operator to the
airline!
Until end of the 80’s: one flight: two tour operators plus ‘’pro rata’’
Beginning of the 90’s: one flight: several tour operators’ seats with no commitment
In low season Transavia is renting out their planes
Transavia fits best in the business model of:
- Traditional Value
- Modern Value
5 Force Model By Michael Porter
(https://www.youtube.com/watch?v=cm9SsMa56r4)
Five Forces Model Porter – Force 1: Threat of new entrants
The first of the five forces is the threat of new entrants. In this component of the framework you ask
yourself whether it is easy to enter the market. For example, are there barriers for entering the
market such as high start- up costs (would you first have to build an entire factory or can costs be
prevented by outsourcing), is the market protected by patents and can purchasers easily change
their suppliers? How does this threat apply to the aviation industry?
Five Forces Model Porter – Force 2: Threat of substitutes
The second of the five forces by Michael Porter is the threat of substitutes. A substitute is a
replacement product or service. Clients of a cable company can for example opt for watching TV via
the cable, but they can also opt for the substitute digital TV. In addition, instead of watching TV
people can opt for using the Internet. In such a case the Internet is a substitute for TV (and should
the consumer not watch any TV anymore) even for the cable company. So here it goes without
saying that if there are many substitutes or ones which could be developed, the industry will be less
attractive. What are the substitutes for flying?
Five Forces Model Porter – Force 3: Bargaining power of the purchasers (customers)
The third of the five forces is the bargaining power of the purchasers. According to Michael Porter, if
there are only few purchasers and many suppliers, then the purchasing party would have to compete
more, making the market less attractive. An example of a branch where the purchasers have
considerable power is the car industry. There are only a limited number of producers of cars. The
market is gigantic, so as secondary supplier providing a component for a car, that directly means a
considerable turnover. Many secondary suppliers for car manufacturers are completely dependent
on the car manufacturer and thus have little bargaining power. You can already guess what effect
this has on the margins for the secondary supplier. How much choice does the passenger have?
Five Forces Model Porter – Force 4: Bargaining power of the suppliers
The fourth of the five forces resemble force 3, but from the perspective of the supplier. A wide
choice of suppliers means that as a company you will be able to purchase more cheaply, but there
are also industries where the supplier has considerable power, for example because the supplier is
selling goods which are scarce. An example of this is Intel, which has considerable market power for
computer producers, because consumers really want to have an Intel processor in their computer.
The same goes for AMD If you as company wish to enter a market in which suppliers have
considerable power, then that market is naturally less attractive for entering. Who are the suppliers
of airlines and how much power to they have?
Five Forces Model Porter – Force 5: Intensity of rivalry within the industry (central point)
For the last component of the five forces by Michael Porter you consider the direct competitors who
are already active in the market. You can ask yourself the following questions in relation to this, for
example: How many competitors are there? How large are those competitors? How quickly is the
industry growing? What is ratio between fixed costs in relation to variable costs? What are the
barriers for you to withdraw from the market?
About the Five Forces Model by Michael Porter
Michael Porter developed the Five Forces Model in 1979. https://consulterce.com/five-forcesanalysis/
Transportation about Business Travel Management
Bartjan de Keijzer 21-09-21
BTM = Business Travel Management
Target group for airlines
VSR = Visiting Friends and Relatives
Two / third of the Airlines revenue comes from first, business and premium economy.
Business Travel = people travelling for purposes related to their job or working environment.
A business trip is a trip for business purposes either domestic or international this trip s
effectuated on behalf of and at the expense of a company or institution
-
Choice of destination
Choice for time of travel
Who is paying?
Choice of transport
Elapsed travel time
Focus on flying
Payments
Spending
Travel arranged via
Long term relation agency & corporate account
Mainly determined by the company
Requirements for Business Travelers
- Speed
- Comfort
- Convenience
- Frequency
- Flexibility
- Reliability & punctuality
-
Business accounts
-
Suppliers
- Intermediaries
BTM Triangle
Business accounts
Traditional Businessman
- Sales representative
- CEO / General manager
- Senior manager etc
But also
- Sport teams
- Journalists
- Pop Stars
- Medical staff traveling to a congress
- Ship crew
- Ministers on a state visit
The companies (Corporate accounts)
- Shell
- Philips
- ING
- Unilever
- Heineken
- IBM
- Rabobank
The final consumer is the individual business traveller, traveling on behalf of the corporate
account (=company)
Intermediary
- Travel Management Companies (TMC)
o BCD travel
o BTI
o Schiphol Travel International
o CWT
o Carlson Wagonlit
Traditional Commission and service fee are main incomes of these companies
Suppliers
Transport = Airline (network & low cost), railway, car rental, ferry & taxi companies
Accommodation= Hotel chains, individual hotels, AirBnB, guesthouses, other lodging
facilities BUT also restaurants & bars
GBTA: Global Business Travel Association
The discipline that focuses on the way in shich a company DIRECTS AND CONTROLS its costs
for travelling, lodging, meals, representation and all related costs incurred by its employees
This is based on a structured
CORPORATE TRAVEL POLICY
Travel policy is the articulation of the company’s culture:
- Helping travellers to accomplish their business statement by structures / procedures
to save time and effort
- Provide an acceptable level of safety, service and comfort
- Enhancing overall travel process productivity
Overall Goals & objectives
- Reduction T&E expenses
- Controlling T&E costs
- Transparency to employees
- Act in line with company culture
- Defining responsibilities for the travelling employees
Travel Policy topics
- Authorisation (approval structure)
- Air Travel (preferred Travel Agency, class, frequent Flyers, travel 2-gehther
- Private trips / Bleisure
- Payment methods & reimbursement of expenses
KEEP IT SIMPLE
!! Importance of DATA !!
!! Data is power (knowledge is power) !!1
D.O.C. Duty of Care
‘’employers are expected to take practical steps to safeguard their employees against any
reasonably foreseeable dangers in the workplace’’
Week 3 Notes Aviation Legislation Erik Feld
ICAO= International Civil Aviation Organisation
Founded during the Chicago convention in 1944. To have a safe and smooth
aviation world. Governments and countries decide. Non-profit organisation.
IATA= international Air Transport Association (commercial entity)
Founded in Habana, Cuba. Organisation lead by airlines. Make more money in
the aviation world. 270 airlines are members of IATA. Non-profit organisation.
Chicago Convention December 7th, 1944
Air Freedom Rights
Air Service Agreements (ASA)
Bilateral Agreements:
Bermuda I Agreement (1946)
Bilateral agreements between US and UK
Bermuda II Agreement (1977)
Four Airlines between US and LHR (AA l BA l UA l VA)
Netherlands: More than 135 bilaterals
For flying you need 2 slots
1. One slot for taking off
2. One slot for landing the aircraft
The above-mentioned airline companies possess the good slots.
3rd freedom right + 4th freedom right = 6th freedom right
Important bodies for aviation operations
- EASA (European Aviation Safety Authority)
o Deals with accidents and crashes
- ECAC (European Civil Aviation Conference)
o European ICAO
- European Commision
o European union
- Eurocontrol
o Takes care of airplanes that fly above Europe
What do you need when you want to start an airline in the EU?
1. Passport of the EU
2. A lot of money to start up
3. Safety requirements (good airplanes and pilots etc..)
Liberalization =deregulation
Europe was regulated till the 1st of April in 1997. After that everything was
deregulated. It became a free market. Furthermore, LCC’s started to rise.
Hub & Spoke system arises = KLM takes passengers via their hub to other
destinations. HUB= Schiphol in this case, spokes are the destinations where
they are flying to. Lastly, lower fare prices so yields went down
The Dutch aviation laws are a spin off from international and European laws
Captain of the aircraft is the first responsible. Where the airplane takes off, that
soil is it.
AOC (Airline Operator Certificate)
- Licence to start operating as an airline
If you misbehave as an airline, your licence can be withdrawn.
Not all airlines have their own licence. But rent it at a company.
JAR= Joint Aviation Requirement
Airworthiness and maintenance should be okay.
Tasks EASA:
- Type certificate
- Certification DOA’s (DOA = Design Organisation Approvals)
- ETSO authorization (ETSO = European Technical Standard Order
- Certification parts and equipment
Certificate of registration
Pays Hollande = land code Netherlands
Airplanes and noise. Not all airplanes can land everywhere due to noise
pollution.
OPS Civil aviation and general aviation
Measurements of animals taking on a cabin luggage or hand luggage.
Everything is determined.
Airports
Controlled or uncontrolled is depending on the busyness at the airport.
Lights at the airport are everywhere the same.
-
Traffic rights / ASA
Slots (one to arrive & one to leave)
Schiphol is a coordinated airport
Until 2020 take-offs and landings are capped at 500.000 p/y and 32.000
during the night hours
- Independent slot coordinator distributes slots
Grandfather rights
- Series of slots must be arranged
- 80/20 rule should be executed (use it or lose it)
Remaining slots in slot pool
- New entrances
- Fair distribution: non-discrimination, transparency
- Local rules
Limited slot trading options
Safety
Conventions or meetings have taken place and they have a topic. Setting up
new rules.
Incidents and accidents
Reliability of an airline carrier are discussed during conventions.
Reliability injuries
The carrier is liable for damage sustained in case of death or bodily injury of a
passenger upon condition only that the accident which caused the death or
injury took place on board the aircraft or in the course of any operations of
embarking or disembarking.
Two-tier system = go to court and ask for more
First tier of strict liability up to 113,100 SDR* (Special Drawing Rights)
*Mix of currency’s
- The carrier is liable for damage caused by delay in the carriage by air
- Exception: if carrier has taken all measures that could reasonably be
required to avoid the damage or that it was impossible for it or them to
take such measures
- Liability for delay of passengers limited to SDR 4694
Luggage lost limitation of 1131 SDR (loss, damage and delay)
Cargo gets lost
‘’Unbreakable’’ liability SDR 19 per kg
Passenger rights according to EU
- Denied boarding
- Cancellation
- Rerouting
- Delay
Denied boarding for valid reason
- If no valid travel document
- If no APIS or ESTA
- If not confirmed (return) flight
- If late at check in / departure gate
- If problems with luggage
- If improper behaviour / danger
- If not flown first part of flight
- Health
Extraordinary circumstances
- Political
- Security
- Weather
- Strike air traffic control
- Technical
TITT Lecture week 4 Sustainability in Tourism Remco Wachelder



CSR is a concept whereby companies integrate social and environmental concerns in
their business operations and in their interaction with their stakeholders on a
voluntary basis.
Sustainable and circular
People, Planet, Profit
Secondary effects from high altitude, non-CO2 emission?
1. Greenhouse gas?
2. NOx emission?
Emission share in tourism per element
- Transport
50-70%
- Accommodation
20-30%
- Other
5-10%
ACARE  Advisory Council for Aviation Research and Innovation in Europe
-
-
Aviation industry included in April 2012
Cap and trade system
o Cap: 97% of average emissions 2004-2006
o Trade: 85% for free, 14% on the market
Initially for every flight arriving or originating in the EU member states
ETS = European Trading System Scheme
https://www.youtube.com/watch?v=yfNgsKrPKsg&ab_channel=EUClimateAction
Creates an financial incentive. A maximum from emission. Flexible cost-effective and
business-friendly
A lot of international protest
- China ‘blocks’ Hong Kong Airlines’ order of ten A380s from Airbus
CORSIA https://www.youtube.com/watch?v=OUfhLkMhc8w&ab_channel=ICAOTheInternationalCivilAviationOrganization
Carbon Offsetting And Reduction Scheme For International Aviation (search more)
1. CORSIA is based on a route-based approach
Growth Factor % X Operator Emissions = Offsetting Emissions
No VAT on jet fuel and flight tickets.
1. The need to fly
a. Necessary
b. Combining destinations and meetings
c. Alternatives
2. Choice of route
a. Pre- and post-transport
b. Main route
3. Choice of airline and aircraft type
a. Configuration
b. Occupancy rate
c. Aircraft type
4. Compensation
a. Carbon credits
The more seats in an airplane the less polluting the plane is. The more people you fly the
more sustainable you are.
Greenwashing = Airlines tend to be more positive about their Co2 emissions and
sustainability.
An airplane should be occupied 75% to be at least less polluting
Efficiency optimization: What has the greatest effect?
Strengthening Cooperation on Standards for Intermodal Travel
Intermodal travel = all the different means of transport modes should be better and more
efficiently integrated into each other, extending each other. They have to be in added value
to each other instead of competing them
Week 5 Yield and Revenue management
Yield revenue management = a variable pricing strategy
‘Selling the right seats to the right customers at the right prices and the right time’
(American Airlines 1987)
Revenue and pricing
- Goals is to adjust the demand to
the ‘fixed’ capacity
-
Save seats for high-fare demand
on full flights and channel lowfare demand to empty flights
Market segmentation
- Passengers are very heterogeneous in terms of their needs and willingness to pay
- A single product and price does not maximize revenue
How does the market response to a fare increase?
Price effect  When you increase price, you increase revenue on units sold
Travellers who want flexibility. Higher yield passenger. The passenger is willing to pay more.
Business travellers.
Quantity effect  When you increase price, you sell fewer units
Leisure travel. VFR travellers.
Customer Segmentation
Low revenue business rule
What is legally allowed?
How is it working with the cookies when booking a flight?
FSC= full-service carrier
LCC= low cost carrier
Overbooking
Airlines to structurally overbook flights because there is a high change of people will not
show up. The so called: No-shows. This is mostly based on historical data
AUL
Authorized Booking Level = Maximum numbers of booked seats including the biased allowed
overbooking
Overbooking pt. 2
Sophisticated overbooking algorithms balance the expected costs of spoiled seats and
oversales.
Typical revenue gains of 1-2% from more effective overbooking
Group bookings
Airlines prefer the limit of group bookings. Especially for large groups. They would miss a lot
of yield revenue. Group bookings tend to disrupt the yield revenue of the airline.
New Distribution Capability (NDC)
More modern distribution possibility. To enable airlines to offer more features. (ancillary)
More possibility. Less costly.
Global Distribution System
System that allows you to book a flight.
TMCs
Travel Management Companies
Tuesday morning book and flight for cheap fares