Questions and Answers of Operations Management 6th

How do aircraft direct operating costs vary with aircraft size, segment length, and age?
Why does an FSNC typically have several aircraft types in its fleet?
How does an LCC benefit from operating a single- fleet type?
Why has Delta Air Lines added a mix of new and used aircraft to its fleet?
Why is airfare per mile flown much less for long international flights than on a regional airline flight from a small city to a nearby FSNC hub?
List each Airbus aircraft type and the competing Boeing type.
What financing methods are available for an airline to acquire aircraft for its fleet?
What is the difference between borrowing funds from a bank for fleet expansion and leasing aircraft?
One aircraft type in an airline’s fleet is grounded. How might it maintain its flight schedule for a short time?
How can an airline benefit from financing its fleet with a variety of financing methods?
What is the relationship between airline fixed costs and marginal costs and how do these relate 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 airfreight 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?
What happened to transform computer reservation systems into global distribution systems?
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 is an NDC aggregator?
Which reservation process is the least costly for an airline?
What were the positions of the US versus most other 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
In most nations, the flag carrier has historically been state- owned. Why have states felt that public ownership was beneficial?
What are the characteristics of state- owned airlines that often render them uncompetitive with privately (or public stock) owned airlines.
What are the various ways that a state- owned airline can be privatized?
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 into an alliance?
Why do alliances seek antitrust immunity? Under what conditions will the US grant such immunity?
Members of international alliances often leave or change alliances. What factors cause this instability?
Under some circumstances, alliances benefit the customer (pro- competitive), but in others, the customer may suffer. Explain.
Curiously, in the three largest airline markets, the US, EU, and China, there are three dominant full- service network carriers or airline groups. Who are these FSNCs 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?
Why did IATA commit the airline industry to net- zero emissions by 2050?
Why is the airline industry one of the most difficult to decarbonize?
Can SAF produced from biomass replace conventional jet fuel? Why or why not?
Why would liquid hydrogen require new aircraft designs?
Can liquid hydrogen be delivered to aircraft using existing airport fuel infrastructure?
How is the price of petroleum determined and why is it so volatile?
Why might the world split into two competing economic blocks? Characterize both.
Why is there a risk of a substantial reduction in business travel growth?
Which world regions are most at risk of a pilot shortage? How will a shortage affect airline costs?
What are two types of complex airline structures? What management challenges do these complex structures present?
What are the airline industry’s prospects for stable, competitive profits? Why?
Give an example of how trade increases people’s standard of living.
Why do national governments often build or subsidize transportation infrastructure?Provide an example.
How and why did the early development of the airline industry in the US differ from that in Europe?
Early European airlines carried passengers. Why weren’t passengers carried on the first US commercial flights?
What was the greater objective in federal subsidization of the airlines?
What was the Spoils Conference and was it an appropriate use of government power?
What two, sometimes conflicting, goals were established by Congress for the Civil Aeronautics Board (CAB)?
What regulated industry was the CAB patterned from?
Why did Congress not trust the free market to discipline the US airline industry?
What did the CAB regulate? Why?
Did the CAB allow airlines to compete on price?
Airline fares have declined in real terms since the introduction of the Douglas DC-3 throughout the regulated era. What has enabled this decline?
What are the three factors used to compute the Productivity Index? What is the relationship between productivity and standard of living?
Describe the differences among Trunk, Local Service, Flag (international), and Supplemental carriers in the post WWII period.
How did the introduction of wide- body aircraft (B- 747, DC- 10, L- 1011) in the early 1970s contribute to industry losses?
What factors led to airline losses in the early to mid- 1970s? How did these losses contribute to the move toward deregulation?
What were the arguments for and against deregulation? What other industries have been deregulated?
Compare the process for economic airline deregulation in the US, European Union, and China.
How does the airline industry support global economic growth?
Provide some measures of aviation industry size and a comparison with other major industries.
What factors drive long- term global and regional air travel demand? Supply?
How did the COVID- 19 pandemic affect worldwide air transportation supply and demand?
What is liberalization and how does it affect air travel? Provide an example.
Which world regions will have the highest air travel growth? What factors will cause these regions to grow more rapidly than others?
How does historical air cargo growth compare with that of passenger air travel?
What macroeconomic metric is most highly correlated with air travel growth? Why?
How does air travel demand vary by time of day, day of the week, season, and economic cycle?
If an airline planner could perfectly forecast future demand, would a problem in matching capacity with demand remain? Why?
The demand curve shows the relationship between what two economic variables?
What segment of the aviation industry is most concerned with macroforecasts?Microforecasts? Why?
What does the S- curve show?
Compare the wants and needs of the typical business passenger with that of leisure passengers.
What segment of the demand curve is targeted by the low- cost- carriers such as Ryanair?
Given the complexity and uncertainty in forecasting demand, why do airlines bother?
What are the steps an airline planner would follow to evaluate a potential new route?
What factors should be considered in estimating the market share a new entrant airline on a route with existing service can garner?
Describe the three types of route structures. Define or illustrate each.
Why was the linear system widely used in early airline history but is now rare?
What are the advantages and disadvantages of a point- to- point route system?
What are the advantages and disadvantages of the hub- and- spoke system?
Explain why many large airlines operate several hubs.
How do aircraft routings and passenger connections differ in a directional versus an omnidirectional hub? Why are directional hubs less expensive to operate?
What is a “rolling hub” and what savings does it provide in comparison with a traditional hub- and- spoke operation?
Compare focus cities with rolling hubs.

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