airline+route+planning
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Airline Route PlanningPlanning a journey that could
optimize airline profit while
bearing the costsBalancing the demands and
capacities
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Introduction
This is where airlines deal with the application
of forecasting method in determining the
costs of a route of one flight from one
destination to another either Domestic or
International
In terms of
Flight personnel
Fuel consumption
Facilities and Airport cost
Passenger Movement and Air Cargo
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Its significance
Determine the feasibility and possibility to fly
Determine what is required and what can be
offered
Determining the kind of costs and expenses
Determine ways to gain profit
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Determine the FEASIBILITY
The 9 freedoms of the air in airline business:
The Freedoms of the air are a set of
commercial aviation rights granting a
country's airline(s) the privilege to enter and
land in another country's airspace
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Freedom 1
It was also known as technical freedom. The
right to overfly a country without landing. It
grants the privilege to fly over the territory of
a treaty country without landing.
Member states of the International Air
Services Transit Agreement are granting this
freedom (as well as the Second Freedom) toother member states,subject to the transiting
aircraft using designated air routes
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Freedom 2
It was also a technical freedom. The right to
stop in a country for refueling or maintenance
on the way to another, without transferring
passengers or cargo.
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Freedom 3
It was the First Commercial Freedom. The
right to carry passengers or cargo from one's
own country to another.
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Freedom 4
The right to carry passengers or cargo from
another country to one's own.
Third and fourth freedom rights are almost
always granted simultaneously in bilateral
agreements between countries.
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Freedom 5
It is also called a connecting flight. The right to carry
passengers from one's own country to a second country, and
from that country to a third country. An example of this could
be Emirates Airlines flights originating in Dubai, then going on
to Bangkok, and then from Bangkok to Sydney, where ticketscan be sold on any or all sectors.
Two sub-categories exist. Beyond Fifth Freedom allows the
right to carry passengers from the second country to the third
country. Intermediate Fifth Freedom allows the right to carrypassengers from the third to the second country.
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The Silk Road extending from Southern Europe through Arabia, Somalia, Egypt,
Persia, Pakistan, India, Bangladesh, Java and Vietnam until it reaches China.
Land routes are red, water routes blue
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Freedom 6
The right to carry passengers or cargo from a second country
to a third country by stopping in one's own country.
Cathay Pacific Airways, Thai Airways, Malaysia Airlines,
Singapore Airlines and other airlines in Asia use sixth-freedom
rights extensively to fly passengers between Europe and
Australasia. Likewise, American Airlines connects passengers
from Europe and Asia to other countries in the Americas via
U.S. ports, and British Airways commonly tickets passengers
from America to Asia via London. Icelandair sells ticketsbetween Europe and North America via Iceland, Finnair sells
tickets from North America to Asia via Helsinki.
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The Kangaroo Route traditionally refers to air routes flown by Qantas between the
countries of Australia and the United Kingdom, via the Eastern Hemisphere.
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Freedom 8
The right to carry passengers or cargo
between two or more points in one foreign
country.
The eighth freedom is also known as
cabotage, and is extremely rare outside of
Europe.
The main real life example of eighth-freedom
rights is the European Union, which has
granted such rights between all of its member
states.
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Freedoms of the air
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Determine the DEMANDS
Passenger Demand:
How many?
How many seats available?
The kind of aircraft to be used?
The kind of facilities needed? (i.e., catering,
baggage handling, airport facilities)
Fuel:
How much is the consumption?
How far is the journey?
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Determine YOUR CAPACITY
Cabin Crews
Facilities-Airport services
Ground Handling-MRO
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Determine the COSTS
Remember the categories of costs in airline
business?
Two major costs
Direct, indirect and non-operating costs
Major and unpredictable costs
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DIRECT COSTS
Expenses associated with and dependent on
the type of aircraft being operated, including
all flying expenses such as
Flying operations costs
Flight crew expenses
Fuel and oil
Airport and en route charges Aircraft insurance costs
Other flight-operations expenses
MRO costs
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INDIRECT COSTS
Those costs that will remain unaffected by a
change of aircraft type because they are not
directly dependent on aircraft operations such
as
Station and ground expenses
Reservations, sales and promotional costs
General and administrative costs
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Non-operating costs
Those expenses and revenues not directly
related to the operation of an airlines own
air transportation services like
Gains or losses raising from the retirement of
property or equipment
Interest paid on loans, banks or deposits
Gains or losses raising from an airlinesaffiliated companies
Direct gov. subsidies and payments
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Costs for Cargo Airline
Commodities
Containers (if any)
MRO (Overnight)
Fuel
Crew Expenses (Pilot and Co-Pilot)- Lesser
than passenger airline
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PROFITS GAIN
Service charge
Ticket Pricing
Destination
Fuel
Seat
Catering
Insurance
Airport Tax
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Example of CalculationsCOSTS PROFITS
DIRECT COSTS
Fuel Fuel Charge
Labor
MRO MRO Charge
Ground Handling Baggage HandlingAirport Charges Airport Tax
Insurances Passenger Insurance
INDIRECT COSTS
General and administrative costs Service Charge
Flight planning and weather Service Charge
Reservations, sales and promotional costs Service Charge
TOTAL =A TOTAL =B
TOTAL PROFITS: B A= C
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Exercises (Quiz 5)
Airline Route Planning deal with theapplication of forecasting method in
determining the feasibility of a route of one
flight from one destination to another.
Discuss in your own words the Freedomsof the air and provide a route example at
each freedoms.
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