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AVS 120 Intro to Aviation

AVS 120 Intro to Aviation. Airports. Airports. Types: Private Military Especially during WW2 250 airports were developed for national defense Municipal Governments Federal funding was disallowed by the Air Commerce Act of 1926 . Federal Airport Act of 1946.

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AVS 120 Intro to Aviation

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  1. AVS 120 Intro to Aviation Airports

  2. Airports • Types: • Private • Military • Especially during WW2 • 250 airports were developed for national defense • Municipal Governments • Federal funding was disallowed by the Air Commerce Act of 1926

  3. Federal Airport Act of 1946 • Authorized funding for capital improvements • Grants and matching funds to Municipalities • Most of the 250 WW2 airports were declared surplus • returned to Municipalities

  4. Airport/Airway Development Act (1970) • Jet aircraft with large payloads required improved airport and terminal facilities • Users were charged a Levy • Held in trust to provide Federal grants and matching funds • National Plan of Integrated Airport Systems • Developed by the FAA • Identified 3,000 eligible airports for funding • “Adequate” airport: must be located within 20 SM of 97% of U.S. population

  5. Airport Composition Vast majority are closed to the public

  6. There are now  3,500 NPIAS Airports

  7. NPIAS • Recognizes 3 General Classes of Airports • Commercial Service Airports: 2,500 PAX Enplanements Per Year • Reliever Airports: General Aviation Airports within the Metro Area • General Aviation Airports: General Aviation Airports Outside the Metro Area

  8. NPIAS • Commercial Service • 546 • 422 are primary: > 10,000 enplanements pa • Reliever • 260 • Average of 28 GA based there (27% of total GA) • GA • Considered by NPIAS if 10 based GA and > 20 SM from other NPIAS

  9. NPIAS • FAA Hub Classification: • Different to airline • City + Standard Metropolitan Statistical Area: • Large: at least 1% of total enplanements • Medium: at least 0.25% of total enplanements • Small: at least 0.05% of total emplanements • Nonhub

  10. NPIAS  70% of emplanements take place at the 31 Large Hubs!

  11. Airport Components • 3 • Airside • Terminal Operation • Landside

  12. Airside • Runways • Taxiways • Aprons • Influence land area and design: • Type of users (aircraft): size/weight/pax • Location of terminal/maintenance facilities • Available land area • Movement of ground service vehicles

  13. Terminal Operation • Provides the link between landside and airside • 3 main areas: • Curb-side • Central processing area • Links to the airside

  14. Terminal Operation • Must meet the needs of all users: • Primary users: Pax, Mail & Cargo • Secondary users: • Airport/airline/gov’t employees • Meeters-greeters • Well-wishers, etc.

  15. Landside • Development has generally lagged: • FAA does not usually provide funds • Enter - Exit Roads • Parking • Taxi • Hotel • Rental Cars

  16. Operational Considerations • Runway Layout • Local Terrain • Local Weather • Other Local Airport Operations • ATC Requirements

  17. Social Considerations • Local Pax Demand • Ground Access • Noise • Local Environmental Impact/Land Use • Wildlife Habitats

  18. Population affected by Enplanements Although enplanements have increased, the population affected by this has decreased, as airports have been sited away from population centers

  19. AVS 120 - Intro to Aviation Deregulation

  20. The Civil Aeronautics Board • CAB (1938-1985): • Acted as a public utility • Granted authority to regulate: • Entrants • Routes/service areas • Fares • Profit margins • Types of aircraft used • Even seating configurations!!

  21. 1960’s - 1970’s • Economists critical of economic regulation: • Pricing and entry restrictions caused excess service and insufficient pricing competition, inflated airline costs, unsatisfactory profits • Jets introduced in 60’s (wide-bodied in 70’s): • Aircraft faster, more efficient, more comfortable, more reliable, therefore: • Increased passenger demand • Existing airlines unable to meet demand • New entrants not allowed in the club; therefore: • Public disgruntlement

  22. Deregulation 1 • Air Cargo Deregulation Act (1977): • Operate on any domestic route • Charge whatever market would bear • CAB must approve: • Not “public interest” • But “fit, willing, and able” • Growth of express package carriers: • Absorbed local incumbents  • Hub & Spoke networks

  23. Deregulation 2 • Passenger carriers given more freedom in setting routes • Initially prospered/growing public support; therefore: • Airline Deregulation Act (Oct, 1978): • 1981: no authority over routes • 1983: no authority over fares • 1985: no CAB: • Antitrust/essential air service to FAA • International regs (BASA/BAA) to Dept of State • overwhelming bi-partisan support • opposed by “in the club” airlines

  24. Deregulation 3 • Goals of deregulation: • time to increase competition • improved service with reduced fares • stimulate economy • introduce innovative service offerings • enhance productivity and efficiency • Rapid impact: • Airlines reshaped networks • New entrants

  25. Deregulation Effects • Profits skyrocketed • for a very short time period • By early 1980’s • economic recessions hit • airline profits fell, service fell, mergers grew • worst losses in history

  26. Airline Reaction • Airlines were forced to refocus on: • Cost savings: • more efficient aircraft • personnel reductions • wage and benefit reductions • route changes • Many went under

  27. AVS 120 - Intro to Aviation Air Carriers and Commercial Operators

  28. Air Carrier & Commercial Operators • Certification under Part 119: • Part 121: Flag/domestic/supplemental operations in larger aircraft • Part 125: Corporate aviation in larger aircraft (smaller aircraft operate under Part 91) • Part 135: On-demand/commuter operations in smaller aircraft

  29. Types of Operation (#119) • Commuter (#135): • 5 scheduled round-trip flights per week • Airplane: • Non turbojet • Passenger seats: 9 or less • Max. payload: 7,500lb or less • Normal/utility/acrobatic/commuter category

  30. Air Carrier • A person who undertakes directly by lease, or other arrangement, to engage in air transportation (#1). • An air carrier certificated in accordance with Part 121 to conduct scheduled services on specified routes. • Certificated as Flag or Domestic • May also provide nonscheduled/charter services as a secondary operation.

  31. Types of Operation (#119) • Domestic/Flag (#121): • Domestic: • Within lower 48 • Wholly within Hawaii/Alaska • Flag: • Everything else including international • Airplane • Turbojet • Passenger seats: > 9 • Max. payload: > 7,500lb • Commuter/transport category

  32. Air Carriers • Four carrier groupings for FAA stats. are: • Major Carrier: Annual Gross Over $1B • National Carrier: Annual Gross $100M • Large Regional:Annual Gross $20M • Medium Regional: Annual Gross < $20 M

  33. Definitions for Economics • Average Passenger Yield • Revenue for Carrying One Passenger One Mile • Available Seat Miles • One seat transported one mile • Revenue Passenger Miles • What an air carrier sells • One revenue passenger transported one mile in revenue service.

  34. More Definitions for Econ. • Load Factor • The Ratio of Seats Occupied (Revenue Passenger Miles) To Seats Available (Available Seat Miles) • Divide seats occupied by seats available • Gives percentage of seating or freight capacity utilized • 2001 - Average Major US Airline Load Factor was 71.1%

  35. FAA Aviation Forecasts Fiscal Years 2002-2013

  36. Current Situation • Industry • Capacity reductions • 20% at most major carriers except WN • Government • Airline Stabilization bill: • $5B in direct aid, $10B in loan guarantees • Aviation Security bill: • Federalization of screeners, more air marshalls • War risk insurance • Tax deferrals • Traffic is recovering • Yields are improving slowly

  37. Economic Outlook • U.S. • 2 qtr recession ending 1Q02 then strong recovery • Long run growth > 3% • Oil prices fall sharply then rise modestly • Inflation remains modest • World • Slowdown in 02 coinciding with U.S. recession • Long run growth averages 3.3% • Highest growth in Asia and Latin America!

  38. 2004-13: Resumption of Long Run Trend 2002: Decline 2003: Recovery The FAA Forecast:Three Phases Capacity and traffic falls, then recovers in 2003; BUT real yield continues to fall!!

  39. Percent Growth 03-13 Regional Carriers’ RPMs Expected to Increase 7.1% a Year • Slight slowdown in 2002, recovery then gradual slowing • Route Transfers=> Longer trip length • Move to Jet Aircraft

  40. Risks to Forecast • Security issues • Return of the business traveler? • Financial woes => consolidation • Management/labor issues

  41. Why Do Regional Airlines Fail? • Management Lack of Knowledge & Experience in Marketing • Under capitalization • Competition

  42. Why Do Major Airlines Fail? • Greedy Corporate Raiders? • Market Adaptability?

  43. Fares • CAB Set Fares Based on Cost of Operation • Currently Fares Are Based on Market & Competition • Particular Market Segments Drive the Fare Rates-Not Distance Traveled • Big Margins, Make Money-Route A, Break Even-Route B, Lose Money Route C • High Demand Periods-Higher Fares • Low Competition-Higher Fares

  44. AVS 120 - Intro to Aviation International Organizations & Documentation

  45. (Chicago) Convention on International Civil Aviation • 1944 • Goals: 2 • Establish international technical standards • Establish the principles and procedures for economic regulation of international routes, fares, etc.

  46. Warsaw Convention • Scope: • International carriage: • Documentation: • Passengers • Luggage • Cargo • Carrier’s liability

  47. Rome Convention • Damage caused by foreign aircraft to third parties on the surface: • Aircraft or person/object falling from • Liability limited: • Based on aircraft MTOW • Death or injury: 500,000 Francs per person • Franc equates to gold standard • Aircraft must be insured to cover

  48. Tokyo Convention • State of Registration has jurisdiction • Other States not interfere, except: • Territory affected • Offence against national/PR of State • Offence against State security • Breach of ROTA • In accordance with a multilateral agreement

  49. The Hague Convention • Expansion of Tokyo • Includes: • Unlawful seizure is extraditable offence • Report ASAP to ICAO Council: • Offence • Action taken to restore control to legal owner/PIC • Action taken against offender (extradition, etc.)

  50. World Trade Organization (WTO) • Formed by 1994 (Uruguay) round of trade talks • Rules of trade through agreements (GATT) • Objectives: • Free trade flow • Liberalization of markets • Dispute settlement

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