HTM 230

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HTM 230

• Airline Business 1

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Single most important factor in increase in travel
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Wright Bros. 1903
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Commercial service began in U.S. in 1926
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Ford Trimotor

• 10 people / 80 m.p.h.

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DC-3

• 21 people / 180 m.p.h.

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Huge increase in speed and comfort in jusr 10
years (1936)
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First U.S. Airlines

• American
• Eastern
• TWA
• United
• Pan Am

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WWII - Post War Boom

• New Technology
• Many Pilots
• New desire to travel

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Lockheed Constellation

• 200 people / 260 m.p.h.

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Jet Age - 1950s

• DeHaviland Comet
• crashed a lot

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Boeing 707

• 200 people / 590 m.p.h.

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Jets

• Fly above the weather
• Longer range
• 3X point to point speed of prop airplanes

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Jumbo Jets (1970s)
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Boeing 747

• 500 people / 550 m.p.h.

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Others

• Airbus
• DC-10
• L-1011

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Fuel Crisis Deregulation (late 1970s)
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Boeing 737
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Most common airliner

• modern DC-3

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Also

• MD80

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Speeds dont double every 10 years anymore

• Cost / benefit ratio
• Technology is there

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Concorde SST

• 125 people / 1350 m.p.h. / Mach II

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Organization

• Flight Deck
• Cabin
• First Class
• Business
• Coach
• Galley
• Baggage Compartment

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Crew

• Captain - Pilot
• First Officer - Co-Pilot
• Engineer
• Cabin Crew - Flight Attendants

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Hub Spoke System
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Flight Types

• Nonstop no stops
• Direct stop, but no plane change
• Connection stop and change

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Trip Types

• One Way

A
D
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Trip Types

• Round Trip

A
D
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Trip Types

• Circle Trip

A
A
D
A
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Trip Types

• Open Jaw

A
D
D
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Deregulation

• CAB
• 1978
• 1978 - 1993 Lost more than ever made
• Price War
• Bankruptcies
• Eastern
• Braniff
• Pan Am
• Continental

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Dilemma

• High Fixed Cost, Low Variable Cost
• 100 passengers _at_ 100 10,000 yield
• 130 passengers _at_ 75 9,750 yield

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Yield Management

• 100 passengers _at_ 100 plus 30 passengers _at_ 75
  12,250 yield
• Segment by willingness to pay
• Value pricing vs Cost pricing
• Frequent Flyer
• Super Saver
• 10 different coach fares per flight

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Distribution Channels

• Travel Agent
• Direct / counter
• Direct / 800 number
• Direct / Internet

Most Expensive
Least Expensive