Questions and Answers of Operations Management 6th

What is product differentiation, why is it important, how can airline differentiate its product (for example, American Airlines)?
Allegiant is a non-traditional U.S. airline. Use the Competitive Dimensions to summarize its competitive strategy. (Allegiant Air at: http://www.allegiantair.com)
Explain how the distinction between LCCs and comprehensive network carriers is fading in the U.S. domestic market.
How does air freight differ from passenger transportation?
List the three types of cargo carriers.
12 List the three types of cargo carriers.
The Schedule of Services represents the foundation or basis of the airline product (product attributes such as cabin configuration are also important).What is the economic objective of the schedule?
Explain why a mixed fleet, particularly airplanes of different seating capacity, can increase revenue potential and, therefore, profitability? If so, why do Southwest and Ryanair only operate Boeing
How are unit costs (cost per available seat mile, CASM) lowered with higher asset utilization (for example, how is the CASM of an aircraft lowered by flying more hours per day)?
How can slack resources (such as a spare aircraft) improve schedule reliability?(Note that this is true for any production process.) If schedule reliability increases revenue through improved
How might a constraint such as available gates at an airport reduce the Schedule of Services revenue potential?
What are the typical causes of irregular operations? Which is most common?
Why is a hub-and-spoke route structure more vulnerable to large scale weather disruption than a point-to-point or linear system?
Why has the AOCC evolved?
What functions are typically located within AOCC? Describe the responsibility of each.
Why is continuous improvement critical to the success of any business operating in a competitive environment?
Describe the Control Process. How can it lead to Continuous Improvement?
What are some of the metrics (measures) that an airline tracks to control and improve its operations?
How do historical airline industry profits compare with other industries?
What financial metrics are useful in comparing the profitability of different firms?
Define ASM, RASM, CASM, LF, and yield. How might a change in one affect another?
Do airline prices keep rising?
Why is a 100% load factor not achievable across all airline flights? What is a practical limit?
What is ancillary revenue? What category of airlines realize the highest percentage of ancillary revenue? Why?
What are the two largest airline cost categories?
What steps have airlines taken to control labor cost?
Can fuel hedging lower fuel cost? Why do some airlines hedge fuel prices?
What are the typical steps legacy airlines take in restructuring?
How does the EU Emissions Trading System affect airlines?
What factors must an airline consider in selecting new aircraft?
Why has Delta Air Lines added a mix of new and used aircraft to its fleet?
Do airlines benefit from economies of scale, scope, and density?
What is the relationship between airline fixed costs and marginal costs and how is it related to revenue management?
Why is a segmentable market important to a revenue manager?
What is meant by a perishable product and why are airline seats perishable?
Explain why a perishable inventory is a very important characteristic of an airline’s product.
Why do airlines overbook and why do some overbook more than others?
What is the difference between overbooking and overselling?
Oversold passengers can be categorized into two groups. What are these two groups and how does their compensation differ?
What is expected marginal seat revenue and why is it so important a factor in the seat allocation process?
What is fare nesting and how does it protect higher paying seats?
How is network seat allocation different from leg seat allocation?
How does passenger revenue management differ from air freight revenue management?
What was the Request and Reply system?
Why was the Official Airline Guide produced and what is its use today?
What were the factors that led to the government’s regulation of the computer reservations systems? What led to its deregulation?
Why did the travel agent become the predominant distribution channel for airlines and what two services did travel agents provide that were needed by passengers?
How have GDSs been transformed in recent years?
How has Internet distribution affected traditional travel agents?
Why did airlines offer Internet-only fares?
What is the NDC and how will its use improve airline sales?
What were the positions of the US and the remaining nations at the Chicago Convention on regulating international air commerce? What was the outcome and why did most other nations not agree with the
What aspects of the air transportation service between two countries are typically addressed in a bilateral agreement (such as Bermuda I)?
What does the US mean by “Open Skies”? Compare and contrast recent“Open Skies” agreements with earlier bilateral agreements.
In negotiations with the US to obtain a single air transportation agreement, the EU has proposed eliminating or significantly reducing the restrictions on citizenship and cabotage. What are these
Foreign airlines have traditionally been state-owned. Why have states felt that public ownership of national airlines was beneficial?
What are the typical characteristics of state-owned airlines that render them uncompetitive with privately (or public stock) owned airlines?
What are the means by which a state government can privatize a state-owned airline?
Provide an example of a domestic alliance and an international alliance.
What benefits do airlines attempt to obtain through an alliance? Why doesn’t an airline simply add the new destinations it wishes to serve instead of entering an alliance?
Why do alliances seek antitrust immunity? Under what conditions will the US grant such immunity?
Many international alliances have come and gone with members frequently changing partners. Why have alliances proved unstable?
Under some circumstances, alliances benefit the customer (pro-competitive), but in others, the customer may suffer. Explain.
Curiously, the three largest airline markets, the US, EU, and China, each has three dominant network carriers. Who are these network carriers in each market?
Name the three global airline alliances. Are the three largest network carriers in the US, EU, and China evenly divided among the alliances?
What were the positions of the US and the remaining nations at the Chicago Convention on regulating international air commerce? What was the outcome and why did most other nations not agree with the
What aspects of the air transportation service between two countries are typically addressed in a bilateral agreement (such as Bermuda I)?
What does the US mean by “Open Skies”? Compare and contrast recent“Open Skies” agreements with earlier bilateral agreements.
In negotiations with the US to obtain a single air transportation agreement, the EU has proposed eliminating or significantly reducing the restrictions on citizenship and cabotage. What are these
Foreign airlines have traditionally been state-owned. Why have states felt that public ownership of national airlines was beneficial?
What are the typical characteristics of state-owned airlines that render them uncompetitive with privately (or public stock) owned airlines?
What are the means by which a state government can privatize a state-owned airline?
Provide an example of a domestic alliance and an international alliance.
What benefits do airlines attempt to obtain through an alliance? Why doesn’t an airline simply add the new destinations it wishes to serve instead of entering an alliance?
Why do alliances seek antitrust immunity? Under what conditions will the US grant such immunity?
Many international alliances have come and gone with members frequently changing partners. Why have alliances proved unstable?
Under some circumstances, alliances benefit the customer (pro-competitive), but in others, the customer may suffer. Explain.
Curiously, the three largest airline markets, the US, EU, and China, each has three dominant network carriers. Who are these network carriers in each market?
Name the three global airline alliances. Are the three largest network carriers in the US, EU, and China evenly divided among the alliances?
Explain the unique characteristics of airline labor.
Describe why labor is an important consideration to an airline manager?
How do wages in the airline industry compare to other industries?
What are ways managers can reduce labor costs?
Describe so- called atypical employment in aviation.
Why do European airlines often have several different pilots’ unions?
Why is airline labor in the US regulated under the Railway Labor Act?
What are Labor Protective Provisions and what aspect of an airline merger are they designed to protect?
How do historical airline industry profits compare with other industries?
What financial metrics are useful in comparing the profitability of different firms?
Define ASM (or ASK), RASM (or RASK), CASM (or CASK), LF, and yield. How might a change in one affect another?
How have real and nominal airline prices changed over the past several decades?
What is ancillary revenue? What category of airlines realizes the highest percentage of ancillary revenue? Why?
What are the two largest airline cost categories?
What steps have airlines taken to control labor costs?
Can fuel hedging lower fuel costs? Why do some airlines hedge fuel prices?
What are the typical steps legacy airlines take in restructuring?
How does the EU Emissions Trading System affect airlines?
Do airlines benefit from economies of scale, scope, and density?
Compare the effects of the COVID- 19 pandemic on the airline industry to earlier shocks.
What operational factors must an airline consider in selecting new aircraft?

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