For AERO-B Air Transportation materials - PowerPoint PPT Presentation

airline economics l.
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  1. Airline economics

  2. Passenger Ticket • The record of agreement for the carrier(s) to provide transportation and related services under certain terms and conditions to the passenger named on the ticket and in accordance with applicable governing tariffs and regulations.

  3. Passenger Air Tariff • Passenger Air Tariff (PAT) provides easy access to general rules, fare construction application, ticketing, taxes, baggage and other rules and fares information in support of passenger travel.

  4. Airline Fares • The amount charged by the carrier for the carriage of a passenger and his/her allowable free baggage and is the current fare that a carrier publishes to the public, or to appropriate segment of the public as being applicable to the class of service.

  5. Surcharges • The surcharge provisions of each fare shall apply to the appropriate sector over which the fare is assessed. • Fuel surcharges

  6. Types of Passenger Fares • Normal Fares • Common Fares • Joint Fares • Promotional Fares

  7. Normal Fares • Standard Fares or Basic Fares • Fares that apply to all passengers at all times • Varies according to the class of travel • Backbone of the fare structure

  8. Common Fares • Unusual application of normal fares • Subjected on certain routes • Ex: Chicago-San Francisco = $200 Chicago-San Francisco-Fresno = $200

  9. Joint Fares • Single fare that applies to transportation over routes by two or more carriers. • Usually determined by an agreement between the airlines. • Popular between major carriers and regional carriers.

  10. Promotional Fares • Discounted fares that supplement normal fares • Offered with some kind of restriction • Restrictions help to minimise the risk of diverting full-fare traffic • Ex: Excursion fares, Group fares

  11. Elasticity of Demand • It can be defined as the percentage change in passenger demand to the percentage change in price. Ed = (Percentage change in passenger demand) / (Percentage change in Price) • Elastic demand • Inelastic demand • Unit elasticity