AVE 3103 AVIATION ECONOMICS

Page 1 of 6

Question Bank Aviation Economics. Introduction to aviation economic Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. 1) a) Describe what do you understand about the general characteristics of oligopolies and prove that aviation industry is oligopolistic. (4 marks) b) Name three other possible oligopolistic industries. State your reason. (3 marks)

c) From your opinion why competition in aviation industry has been has been substantially increasing in Malaysian market? (3 marks) The aviation industry faced one of the biggest developments in the new era, riding on the wave of the new economy and a greater demand for travel. 2. a) Explain in your own word the airlines special economic characteristics. (4 marks) b) Discuss the concept of price rigidity and non-price competition in aviation industry. Provide example to support your answer. (3 marks) c) From your observation, why food and education industries are not badly impact as aviation industry to economic downturn. (3 marks) Airlines can independently make profits in each areas of aviation economic activities which deals with profitmaking and lowering costs in aviation activities. 3. a) Explain in your own word the airlines profitable economic activities. (4 marks)

b) What are the two major operating expenses in airline industry and why are they so high? (3 marks) c) In your own words, which aviation economic activities could obtain the highest gross profit and state your reasons. (3 marks) The demand of airlines service

In the aviation industry various factors such as authorities, airports, airlines and passengers combine to determine the affect the airline strategy and business organization. 4. a) Explain in your own word the reason for the small number of certificated airliners. (5 marks) b) Define economies of scale, and discuss how they relate to the airline industry.

AVE 3103 AVIATION ECONOMICS

Page 2 of 6

(5 marks) Traffic is the part of demand for air transport services that has been satisfied by carrying passenger and cargo. 5. a) Describe what do you understand about the demand characteristics of airline service. (4 marks) b) Discuss in your own words the definition and purpose of forecasting. In airline industry, plan of the future cannot be made without forecasting demand 6. a) Brief in your own words the three type of forecasting and provide examples to support your answer. (6 marks) b) Briefly explain in your own words the causal method for forecasting and provide a simple example aviation industry to support your answer. (4 marks) In airline industry, plan of the future cannot be made without forecasting demand 7. a) Briefly explain in your own words the forecasting methods in aviation industry . From your opinion, which is the best method and state your reasons? (6 marks) b) State the 2 demands in airline industry and discuss what type of forecasting suit to quantify those demands. (4 marks) 8. a) Brief in your own words the three type of forecasting and provide examples to support your answer. (6 marks) b) Briefly explain in your own words the causal method for forecasting and provide a simple example aviation industry to support your answer. (4 marks) Passenger movement The challenging global economy is undermining business activity, business confident and the sentiment to travel. 9. a) Describe in your own words the significance of passenger load factors. (6 marks) b) Discuss in your own words the reason load factor has a critical impact on the cost and quality of air transportation. (4 marks) Airline has to make sure that capacity to carry passenger is sufficient during traffic peaks and valleys. 10. a) Describe in your own words the significance of positioning flight. (5 marks) (6marks)

b) Discuss in your own words how to optimize profit during travel peak and valley. (5 marks)

AVE 3103 AVIATION ECONOMICS

Page 3 of 6

During economic recession, low demand from the customer will makes the airline lost profit. 11. a)Describe in your own words the significance of load factor in relation to airline pricing. (5 marks) b) Describe your understanding on how airlines set their prices in the first place. (5 marks) Passenger marketing 12. a)Briefly explain in your own words the concept of airline marketing approach. (6 marks) b) Discuss the difference between shotgun approach and riffle approach. State examples for each approaches. (4 marks) 13. a) Describe how can you strategies your techniques in aviation industry using the controllable marketing mix factors. (4 marks) b) Discuss in your own words the uncontrollable factors in airline marketing mix and provide example to support your answer. (4 marks) c) From your opinion, what are the essential information you required from your passenger for effective marketing? (2 marks) 14. a) Describe your understanding on airline market segmentation. b) Discuss in your own words the airline market penetrating strategies. (4 marks) (6 marks)

15.

a)Guide AMC airline the essential steps in intensive growth marketing strategies. (6marks) b) Briefly explain what do you understand about the consumer oriented marketing concept and how AMC airline could practice new strategies to utilize the concept. (2 marks)

c) From your opinion, what is the best sustainable marketing strategies AMC airline could implement for continuous improvement and customer satisfaction. (2 marks) Airline pricing Cost is a major determinant in pricing the airline product, in other words, cost is the financial value spent by a company to produce a product. 16. a) Explain in your own words the trend in passenger airfares from 1929 and what was the primary reason for the changes in average air passengers fares. (6 marks) b) From the passenger airfares since 1929, how can you summarize the price trend and the determinants of the demand that you have already described. (2 marks)

AVE 3103 AVIATION ECONOMICS

Page 4 of 6

c) From your opinion, how is the price trend in 10 years time and elaborate your forecasting reasons. (2 marks) Fixed-base operation 17. a) Briefly explain in your own words the definition of airline Fixed Base Operation. (3 marks) b) Discuss in your own words all the major services provided by FBOs. (4 marks)

c) If you plan to start an airline FBO company, which kind of FBO services would you prefer and state your reason why? (3 marks) 18. a) Briefly explain in your own words the concept of ground handling in FBO services. (6 marks) b) Discuss your understanding on Avionics and what type of FBO services available. (2 marks) c) Why do you think FBO ground handling services require fast and efficient actions strictly monitored by the authorities? (2 marks) 19. a) Briefly explain in your own understanding on ramp services. (3 marks)

b) Describe the 6 services available in ramp services and 3 services offered in passenger services. (4 marks) c) State which FBO services is subcontract to foreign company in Malaysia and discuss your reasons. (3 marks) 20. a) Briefly explain 8 others Other Operations of FBO excluding the major services. (6 marks)

b) Discuss in your own words four activities in ground handling FBO services. (4 marks) Maintenance, repair and overhaul Sepang Aircraft Engineering, Airod, and MAS are examples of MRO company in Malaysia. 21. a) Briefly explain in your own words the concept of maintenance, repair and overhaul (MRO). (3 marks) b) Describe in your own words the responsibility of the airline MRO operator? (4 marks) c) From your opinion, which is the most challenging task for an MRO operator and state your reason why. (3 marks) To generate revenue the aircraft must fly. To fly, the aircraft must be airworthy. To keep aircraft airworthy, they must be maintained. (MCAR 30, AN12).

AVE 3103 AVIATION ECONOMICS

Page 5 of 6

22.

a) Discuss in details the four categories of Maintenance, Repair and Overhaul (MRO). (4 marks) b) Discuss in your own words significance of MRO engine maintenance. (3 marks) c) From your opinion, what is the key success indicator for an MRO service provider? (3 marks)

A large airplane costs more than USD 100 Million. Shareholders expect the value of these assets to be protected or preserved. Maintenance preserves the asset value of the aircraft. 23. a) Briefly explain the difference in refurbishments and modifications in MRO. State some examples to support your answer. (4 marks) b) Discuss in your own words the standard expectations from an MRO Provider. (3 marks) c) From your opinion, which MRO provider would you prefer to service your aircraft? State your reasons. (3 marks) To generate revenue the aircraft must fly. To fly, the aircraft must be airworthy. To keep aircraft airworthy, they must be maintained. (MCAR 30, AN12). 24. a) Briefly discuss all the challenges that the MRO provider faces. (4marks)

b) Guide MAS that has more than 1 year old aircraft with 3000 flight hours completed in the MRO routine scheduled maintenance. Which types of checks-in grades is suitable for this aircraft. (3 marks) c) From your opinion, would you opt to use contracted maintenance for your airline company. State your reasons. (3 marks) Airline route planning

25.

a) Briefly explain in your own words the concept of airline route planning and its implication to airliners. (5 marks) b) Discuss the three types of route available for airline routing management. (3 marks) c) From your opinion, which is the most difficult freedom of air feasibility permission to be obtained by airliners? State your reasons. (2 marks)

Freedoms of the air apply to commercial aviation (carrying paying passengers, transporting cargo or mail). 26. a) Discuss in your own words the significance in Freedoms of the air in air route feasibility. (5 marks)

AVE 3103 AVIATION ECONOMICS

Page 6 of 6

b) Provide a route example for each freedom of air.

(3 marks)

c) From your opinion, why it is so importance for airline route planning management and state your reasons. (2 marks) 27. a) Describe your understanding on the implication of airline route planning to airliners. (5 marks) b) Discuss in your own words the similarities and differences of the fifth and sixth freedom of air. (3marks) c) From your opinion, why does weather forecast is an important factor in airline route planning? State your reasons. (2 marks) 28. a) What is the three most importance factors need to be considered before planning your airline routing. (6 marks) b) Which freedom of air is known as stand alone cabotage? Briefly explain it. (2 marks) c)From your opinion, what are your creative strategies to improve the airline routing that could attract more passengers? (2 marks) 29. a) Explain in your own words the common factors need to be considered during route feasibility analysis. (4 marks) b) If MAS is planning to carry passengers from Kuala Lumpur and Singapore to Melbourne, Australia, which freedom of air should MAS comply? State your reasons. (3 marks) c) From your opinion, which routing type would you opt to use for your airline company. State your reasons. (3 marks) 30. a) Explain the following cost: i) Non-operating cost ii) Direct cost ii) Indirect cost b) Explain the following freedom: i) Freedom 1 ii) Freedom 2 iii) Freedom 3

(4marks)

(6marks)