INTRODUCTION TO THE AIRLINE INDUSTRY

COURSE TEXTBOOK

TABLE OF CONTENTS

Introduction ................................................................................................................................................... 1
Module 1 The Airline Industry Today
1.0 The Airline Industry Today...................................................................................................................... 5
1.1 The Airline Industry ................................................................................................................................. 6
1.1.1 What is the Airline Industry? ......................................................................................................... 6
1.1.2 Scope of the Airline Industry ......................................................................................................... 8
1.1.3 Types of Airline Service ................................................................................................................ 9
1.1.4 Scheduled Flight Service ............................................................................................................ 11
1.1.5 Non-Scheduled Flights ............................................................................................................... 12
1.1.6 Passenger Travel ........................................................................................................................ 13
1.2 Cargo Transport.................................................................................................................................... 16
1.2.1 Air Cargo ..................................................................................................................................... 16
1.2.2 Air Freight Forwarders ................................................................................................................ 18
1.3 Economic and Social Impacts .............................................................................................................. 21
1.3.1 Impact as Major Employer .......................................................................................................... 21
1.3.2 Impact on Tourism ...................................................................................................................... 22
1.3.3 Opportunities for Promoting Sustainable Development.............................................................. 23
1.3.4 Additional Benefits ...................................................................................................................... 24
Module Summary ........................................................................................................................................ 26

Module 2 Regulatory and Business Context

2.0 Regulatory and Business Context ........................................................................................................ 29
2.1 Regulatory Bodies ................................................................................................................................ 30
2.1.1 Introduction of Standardisation ................................................................................................... 30
2.1.2 Standards and Recommended Practices (SARPS) ................................................................... 31
2.1.3 Freedoms of the Air .................................................................................................................... 32
2.1.4 The Role of Governments ........................................................................................................... 33
2.1.5 Other Agreements and Treaties ................................................................................................. 34
2.2 The Business Side of the Industry ........................................................................................................ 38
2.2.1 Key Performance Indicators ....................................................................................................... 38
2.2.1.1 Revenue Passenger Kilometre .................................................................................... 38
2.2.1.2 Yield (Average Unit Revenue)...................................................................................... 39
2.2.1.3 Available Seat Kilometre .............................................................................................. 39
2.2.1.4 Unit Costs ..................................................................................................................... 40
2.2.1.5 Passenger Load Factor ................................................................................................ 40

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 2.2.2 Airline Profitability ....................................................................................................................... 41
2.2.3 Revenue Management ............................................................................................................... 42
2.2.4 Growth of Passenger Service Worldwide ................................................................................... 43
2.2.5 Growth of Cargo Service Worldwide........................................................................................... 43
2.2.6 Larger Profit Margins in Cargo.................................................................................................... 45
2.2.7 Air Transportation Activity Regional Breakdown ..................................................................... 45
2.3 Main Industry Characteristics of Passenger Airlines ............................................................................ 49
2.3.1 A Service Industry ....................................................................................................................... 49
2.3.2 Capital Intensive ......................................................................................................................... 49
2.3.3 High Cash Flow........................................................................................................................... 50
2.3.4 Labour Intensive ......................................................................................................................... 50
2.3.5 Highly Competitive ...................................................................................................................... 50
2.3.6 Thin Profit Margins ...................................................................................................................... 50
2.3.7 Seasonal ..................................................................................................................................... 51
2.3.8 Current status ............................................................................................................................. 51
Module Summary ........................................................................................................................................ 53

Module 3 From Flying Machines to Airline Alliances: A Trip through History

3.0 From Flying Machines to Airline Alliances: A Trip through History............................................. 57
3.1 Development of Commercial Airlines.......................................................................................... 58
3.1.1 Early Beginnings Pre-World War II .............................................................................. 58
3.1.2 Impact of World War I .................................................................................................. 59
3.1.3 Growing Demand in the 1930s .................................................................................... 60
3.1.4 Impact of World War II 1945 to 1960 ........................................................................ 60
3.1.5 The Jet Age .................................................................................................................. 61
3.1.6 Growth and Setbacks 1960s ..................................................................................... 62
3.1.7 The 1970s .................................................................................................................... 62
3.1.8 The 1980s and 1990s .................................................................................................. 63
3.1.9 Recent Challenges: 2000 and beyond ......................................................................... 63
3.1.10 Growth of Airline Passenger Traffic ............................................................................. 64
3.1.11 Airline Cargo Traffic ..................................................................................................... 64
3.1.12 Timeline: The first years of aviation 1903 2012 ........................................................ 65
3.2 Deregulation................................................................................................................................ 70
3.2.1 Perspectives on Deregulation ...................................................................................... 70
3.2.2 The Start of Deregulation ............................................................................................. 71
3.2.3 Continued Adoption of Deregulation ............................................................................ 71
3.2.4 Effect of Deregulation on the U.S. Airline Industry ...................................................... 74
3.2.5 Open Skies Agreements International Deregulation ................................................. 75

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 3.3 Impact of a Deregulated Airline Industry .................................................................................... 80
3.3.1 Privatisation .................................................................................................................. 80
3.3.2 Consolidation ............................................................................................................... 81
3.3.3 Cooperative Arrangements .......................................................................................... 81
3.3.4 Alliances ....................................................................................................................... 83
3.3.5 Impact on Airport Facilities and Services ..................................................................... 84
Module Summary ........................................................................................................................................ 86

Module 4 Within the Airlines

4.0 Within the Airlines ....................................................................................................................... 89
4.1 How Airlines Are Structured........................................................................................................ 90
4.1.1 Basic Organisational Structure..................................................................................... 91
4.1.2 Types of Airline Personnel ........................................................................................... 92
4.1.2.1 Flight Operations Personnel....................................................................... 92
4.1.2.2 Ground Operations Personnel ................................................................... 94
4.1.2.3 Other Personnel ......................................................................................... 95
4.1.3 Line Personnel and Back Office Staff .......................................................................... 95
4.1.4 Outsourcing .................................................................................................................. 96
4.2 Key Airline Personnel: Flight Crew and Cabin Crew .................................................................. 99
4.2.1 Close-Up on Flight Crew: Duties and Responsibilities ................................................ 99
4.2.1.1 Captain ....................................................................................................... 99
4.2.1.2 First Officer ............................................................................................... 100
4.2.1.3 Flight Engineer ......................................................................................... 100
4.2.2 Key Pilot Tasks .......................................................................................................... 100
4.2.2.1 Prior to Take-Off ....................................................................................... 100
4.2.2.2 Take-Off and Flight .................................................................................. 101
4.2.3 Close-Up on Cabin Crew: Duties and Responsibilities .............................................. 101
4.2.3.1 Flight Attendants ...................................................................................... 102
4.2.3.2 Purser/Cabin Service Manager ................................................................ 102
4.2.4 Key Flight Attendant Tasks ........................................................................................ 103
4.2.4.1 Prior to Take-Off ....................................................................................... 103
4.2.4.2 During the Flight ....................................................................................... 103
4.3 The Role of Training within the Airlines .................................................................................... 106
4.3.1 Entry Level Positions.................................................................................................. 106
4.3.2 Pilot Training .............................................................................................................. 106
4.3.3 Flight Attendant Training ............................................................................................ 107
4.3.4 Reservation/Ticket Agent Training ............................................................................. 108
4.3.5 Passenger Service Agent Training ............................................................................ 109
4.4 Organisational Culture of an Airline .......................................................................................... 111
4.4.1 Norms and Values ...................................................................................................... 111
4.4.2 The Role of Seniority.................................................................................................. 112
4.4.3 Focus on Customer Service ....................................................................................... 113
Module Summary ...................................................................................................................................... 119

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Module 5 All about Airports
5.0 All about Airports....................................................................................................................... 123
5.1 Introduction to Airports .............................................................................................................. 124
5.1.1 What is an Airport? ..................................................................................................... 124
5.1.2 Airport Ownership ...................................................................................................... 126
5.1.3 Airport Codes and Names .......................................................................................... 127
5.1.4 Physical Layout of an Airport ..................................................................................... 129
5.2 Airport Personnel ...................................................................................................................... 135
5.2.1 Airlines as an Onsite Customer.................................................................................. 135
5.2.2 Other Airport Personnel ............................................................................................. 136
5.3 Processing Passengers and Freight ......................................................................................... 141
5.3.1 Processing of Passengers ......................................................................................... 141
5.3.2 The Journey Begins................................................................................................ 142
5.3.3 Arriving Passengers ................................................................................................... 148
5.3.4 Luggage Processing .................................................................................................. 151
5.3.5 Processing of Freight ................................................................................................. 152
5.3.5.1 Freight Terminals and Processing ........................................................... 151
5.3.5.2 Outbound Freight Processing .................................................................. 153
5.3.5.3 Inbound Freight Processing ..................................................................... 154
5.4 Security ..................................................................................................................................... 158
5.4.1 Airport Security ........................................................................................................... 158
5.4.2 Procedures for Controlled Access of Passengers, Luggage and Airfreight ............... 159
5.4.2.1 Passenger and Carry-on Baggage Screening Procedures ...................... 159
5.4.2.2 Parallel Screening Channel...................................................................... 161
5.4.2.3 Checked Baggage Screening Procedures ............................................... 161
5.4.2.4 Luggage Protection Procedures............................................................... 162
5.4.2.5 Airfreight Screening Procedures .............................................................. 162
Module Summary ...................................................................................................................................... 165

Module 6 Air Navigation Services (ANS)

6.0 Air Navigation Services (ANS) .................................................................................................. 169
6.1 Overview of Air Navigation Services......................................................................................... 170
6.1.1 Types of Navigation Services..................................................................................... 170
6.1.2 Navigation Basics ....................................................................................................... 171
6.2 Air Traffic Control (ATC) ........................................................................................................... 174
6.2.1 ATC Services ............................................................................................................. 174
6.2.2 The Structure of Controlled Airspace ......................................................................... 174
6.2.2.1 Airways ..................................................................................................... 175
6.2.2.2 Terminal Control Area .............................................................................. 175
6.2.2.3 Control Zone............................................................................................. 175
6.2.3 Air Traffic Control Services ........................................................................................ 175
6.2.4 Description of Air Traffic Services .............................................................................. 177
6.2.5 Airspace Classifications ............................................................................................. 178

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 6.3 Additional Air Navigation Services, Facilities and Providers .................................................... 182
6.3.1 Flight Information Services and Alerting Services ..................................................... 182
6.3.2 Air Navigation Facilities .............................................................................................. 183
6.3.3 Air Navigation Service (ANS) Providers..................................................................... 184
Module Summary ...................................................................................................................................... 187

Module 7 Airplanes and Flight

7.0 Airplanes and Flight .................................................................................................................. 191
7.1 Introduction to Airplanes and How They Fly ............................................................................. 192
7.1.1 Parts of an Airplane .................................................................................................... 192
7.1.2 How Planes Fly .......................................................................................................... 195
7.1.2.1 Gravity and Lift ......................................................................................... 195
7.1.2.2 Drag and Thrust ....................................................................................... 196
7.1.3 Changing Altitude and Direction ................................................................................ 197
7.1.4 Flying an Airplane ...................................................................................................... 198
7.1.5 Ready to Fly? ............................................................................................................. 199
7.2 Todays Airframe Manufacturers............................................................................................... 203
7.2.1 Manufacturing Companies ......................................................................................... 203
7.2.2 Airbus Industrie AI FRANCE ................................................................................ 205
7.2.3 The Boeing Company USA ..................................................................................... 206
7.2.4 Bombardier Aerospace Group CANADA ................................................................ 208
7.2.5 Embraer Empresa Brasiliera de Aeronautica (EMB) BRAZIL.............................. 210
7.3 Aircraft Types ............................................................................................................................ 214
7.3.1 Types of Airliners ....................................................................................................... 214
7.3.1.1 Wide-body Jets......................................................................................... 214
7.3.1.2 Narrow-body Jets ..................................................................................... 215
7.3.1.3 Regional Airliners ..................................................................................... 215
7.3.2 ICAO Classifications .................................................................................................. 217
7.3.3 Cabin Configurations.................................................................................................. 217
Module Summary ...................................................................................................................................... 221

Module 8 Air Safety and Security

8.0 Air Safety and Security ............................................................................................................. 225
8.1 Ensuring Safe Aircraft ............................................................................................................... 226
8.1.1 The Role of Regulatory Agencies .............................................................................. 226
8.1.2 Manufacturer Responsibilities .................................................................................... 228
8.1.2.1 Meeting Airworthiness Requirements ...................................................... 228
8.1.2.2 Safety Improvements ............................................................................... 229
8.1.2.3 Design Considerations ............................................................................. 229
8.1.3 Maintenance Procedures ........................................................................................... 231

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 8.1.4 Airside Safety ............................................................................................................. 232
8.1.4.1 Threats to Airside Safety .......................................................................... 232
8.1.4.2 Safety Managements Systems ................................................................ 233
8.1.4.2 (a) ISAGO IATA Safety Audit for Ground Operations ............................. 233
8.1.4.3 Airport Design........................................................................................... 234
8.2 Safety in the Air......................................................................................................................... 237
8.2.1 Crew Responsibilities ................................................................................................. 237
8.2.1.1 Flight Crew ............................................................................................... 237
8.2.1.2 Cabin Crew............................................................................................... 238
8.2.2 Culture of Safety ........................................................................................................ 238
8.2.3 Navigation Safety Aids ............................................................................................... 240
8.2.3.1 Airport Lighting ......................................................................................... 240
8.2.3.2 Instrument Landing Systems.................................................................... 241
8.2.3.3 Global Positioning Systems (GPS) .......................................................... 241
8.3 Air Safety Issues ....................................................................................................................... 244
8.3.1 Natural Hasards and Weather Conditions ................................................................. 244
8.3.1.1 Bird Strike ................................................................................................. 244
8.3.1.2 Lightning ................................................................................................... 245
8.3.1.3 Ice and Snow............................................................................................ 245
8.3.1.4 Sand and Dust.......................................................................................... 245
8.3.1.5 Volcanic Dust Particles ............................................................................ 246
8.3.2 Component and System Failures ............................................................................... 246
8.3.3 Human Factors as Causes......................................................................................... 248
8.4 Accident and Incident Investigation .......................................................................................... 252
8.4.1 Why Study Accidents? ............................................................................................... 252
8.4.2 Procedures ................................................................................................................. 253
8.4.3 Investigative tools ....................................................................................................... 254
8.4.3.1 The Flight Data Recorder (FDR) .............................................................. 255
8.4.3.2 The Cockpit Voice Recorder (CVR) ......................................................... 256
8.4.3.3 The Role of the FDR and CVR in Accident
or Incident Investigation ........................................................................... 256
8.5 Security ..................................................................................................................................... 258
8.5.1 What Do We Mean by Aviation Security? .................................................................. 258
8.5.2 Response of ICAO ..................................................................................................... 259
Module Summary ...................................................................................................................................... 262

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Module 9 Future of the Industry
9.0 Future of the Industry ................................................................................................................ 267
9.1 Predicted Growth of the Industry .............................................................................................. 268
9.1.1 Industry Overview ...................................................................................................... 268
9.1.1.1 The Leisure Market .................................................................................. 269
9.1.1.2 The Business Market ............................................................................... 269
9.1.1.3 Market Growth .......................................................................................... 269
9.1.1.4 Decade of Disastrous Growth .................................................................. 270
9.1.2 Changes in the Industry ............................................................................................. 270
9.1.2.1 The Drive towards Efficiency.................................................................... 270
9.1.2.2 Deregulation Intensified ........................................................................... 271
9.1.2.3 Airline Alliances ........................................................................................ 271
9.1.2.4 New Services ........................................................................................... 271
9.1.2.5 Arrival of the Low Cost Carriers (LCCs) ................................................... 272
9.1.2.6 Projected Growth of Low Cost Carriers ................................................... 273
9.1.2.7 Future Growth .......................................................................................... 274
9.2 Threats to the Airline Industry ................................................................................................... 277
9.2.1 State of the Industry ................................................................................................... 277
9.2.2 Fuel Prices ................................................................................................................. 277
9.2.3 Fares .......................................................................................................................... 277
9.2.4 Impact of Low Cost Carriers....................................................................................... 268
9.2.5 Capacity Management ............................................................................................... 279
9.2.6 Taxes and Surcharges ............................................................................................... 279
9.2.7 Health Issues ............................................................................................................. 280
9.2.8 Freight Shipments ...................................................................................................... 281
9.2.9 Consolidation of Freight Forwarders .......................................................................... 281
9.3 IATAs Industry Priorities .......................................................................................................... 284
9.3.1 IATAsRole ................................................................................................................. 285
9.3.2 Simplifying the Business ............................................................................................ 285
9.3.2.1 E-Freight................................................................................................... 286
9.3.2.2 Baggage Improvement Programme ......................................................... 286
9.3.2.3 Fast Travel ............................................................................................... 287
9.3.2.4 IATA E-Services - EMD Implementation .................................................. 288
9.3.3 IATAs Additional Industry Priorities ........................................................................... 289
9.3.3.1 Security .................................................................................................... 289
9.3.3.2 Financial ................................................................................................... 290
9.3.3.3 Environment ............................................................................................. 290
9.3.3.4 Regulatory ................................................................................................ 290
9.3.3.5 Costs to Member Airlines ......................................................................... 290
Module Summary ...................................................................................................................................... 293
Glossary .................................................................................................................................................... 297

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 Aviation Training Program

INTRODUCTION TO THE AIRLINE INDUSTRY

Welcome to the exciting world of the airline industry! Whether you
are interested in an airline career or already work in the industry,
this course has been designed with you in mind. It will provide you
with an overall understanding of the airline industry and a wealth of
information you will need to apply your new skills and knowledge.

You will learn about the scope and structure of the aviation industry
including the impact of deregulation. We will take you on a tour of
airports and their services, and learn how airplanes fly. You will
discover how airlines adapt to the ever-changing socio-economic,
environmental, industrial and technical changes that impact the
airline industry as a whole. Being a highly competitive business,
airlines must prioritise the importance of providing employees with
the best training programmes to ensure they acquire the proper
skills and knowledge of the business.

We trust you will enjoy and successfully complete this course.

To help you do so, we have structured the course to include
9 modules. Each module contains the following learning aids
and organizers:

Module Overview, Lessons, Lesson Overview, Units, Progress

Checks, Lesson Summary, Module Summary, Apply your Learning,
Key Learning points, Did you Know and the Glossary.

We wish you the best of luck!

Introduction 1
 Aviation Training Program

COURSE STRUCTURE

To help you successfully complete and enjoy the course, we have

structured the content into nine modules. Each module contains the
following parts:

Module Overview

Each module begins with an overview of the modules content and

a list of learning objectives.

Lessons

Each module is made up of three lessons, and each lesson includes

the following:

Lesson Overview

Each lesson begins with an overview of the topics to be covered and

a list of learning objectives.

Units
Each lesson includes from one to five units.

Progress Checks

Each lesson ends with a short exercise made up of multiple choice

questions, similar to those of the final exam. The questions are
designed to provide you with the opportunity to test your
understanding of the material. An Answer Key is provided at the end
of each module so that you can check your responses. Should you
encounter errors in your responses, please repeat the respective
lessons to ensure you have learned the content.

Lesson Summary

Each lesson ends with a summary of the lessons main points.

Module Summary

Each module ends with a summary drawing together the main points
of the modules lessons.

Key Learning Points

Key Learning Points are highlighted throughout the text and are
designed to emphasise particularly important issues and
conclusions.

2 Introduction to the Airline Industry

 Aviation Training Program

Did You Know?

Did You Know? Points are highlighted throughout the text and are
designed to offer interesting or fun facts related to the topic area.

Apply Your Learning

This section follows the Module Summary and provides you with the
opportunity to apply what you have learned within your own context.
You will get the most from this course if you make the effort to
complete these exercises.

References and Other Reading Material

This section is included at the end of each module (where

applicable). It provides references to reading materials for those who
wish to research the topic area in greater depth.

Glossary

All terms in italics can be found at the end of this course textbook
along with their definition and meaning.

Introduction 3