Book reviews

debate. Poole challenges the common misconception in the USA that BAA’s privatization has resulted in unusually high charges to users. Indeed he cites evidence and other academic sources to the effect that charges at Heathrow are too low, rather than too high. In so doing the chapter also provides a useful biblio- graphy of other contributions to the debate about privatization and regula- tion. These include the interesting notion, ascribed to Gellman, that high prices for unregulated landside activi- ties might be used to limit demand in the regulator sector. If this means that raising the price of duty-free whisky may discourage passengers from travelling, it is a thought-provoking proposition.

The discussion of pricing also touches on the tendency of efficiently managed companies to adopt marginal cost pricing, and BAA’s use of peak pricing to shift operations from peak to off-peak periods. In this context Poole reveals none of the scepticism of peak pricing shown by the main authors in Chapter 1 of the book.

Poole also discusses the relative merits of RPI-X and rate-of-return regulation for airport charges. In this context his comments are particularly interesting, not so much in relation to BAA, which is already firmly subject to RPI-X, but in relation to US airports, where the regulatory debate is still in its infancy.

The description of concessionary agreements in Chapter 7 is very differ- ent, being more of a practitioner’s guide than a theoretical discourse. It goes so far as to set out a full example of the text of a duty-free concession. Similarly Chapter 8 gives a practical description of financial information systems. The description of life-cycle costing in Chapter 9 takes the same handbook-style approach to discounted cash flow analysis, includ- ing eight pages of compound interest factors. While this is very useful for making manual calculations, more guidance on the factors taken into account in determining the most appropriate discount rates would probably also be appreciated by those who use this book for costing studies.

Chapter 10 turns to performance

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indicators, concentrating on financial measures. The discussion draws on examples from a number of countries and sources, but makes the point that comparisons between airports are extremely difficult.

The last chapter addresses business planning. This is a critical area of the finance and strategy departments of well-run airports. The authors’ approach is to discuss the principles of business planning briefly, and then demonstrate their application through a case study.

So, all in all, this is a wide-ranging and comprehensive book. But who is it aimed at? Most of the content is essentially practical. Methods of dealing with the full spectrum of financial issues are set out. The approach is to collect the basics together, rather than to subject each area to the most intensive review. This is an eminently sensible approach, allowing the reader to use the citations, or appeal to the special- ist textbooks on corporate finance to find any more detail he or she wants. The book will therefore be especially useful to three classes of reader: the full-time student with no practical experience: the new or junior manager in a larger airport organiza- tion; and the more senior generalist manager at a smaller airport. Those with a deeper interest in theories and trends in airport ownership and finance may find it helpful to supple- ment this text with Rigas Doganis’ recent book The Airport Business (Routledge, 1992).

M R Toms BAA plc London

Effective Air Freight Marketing Stephen Shaw Pitman London (1993) 215 pp .%O ISBN 0 273 60299 3

This book has evolved from specialist courses in air freight marketing - as opposed to air passenger marketing - staffed by the author and his associ- ates. It was commissioned by the publishers to complement their other

publications in air transport. The target market is not specifically mentioned, though ‘many people reading this book will be air freight professionals . . . [with] understandable scepticism about the value of a book looking at the principles of marketing and the ways in which these principles can be applied to the air freight indus- try’. In addition, airline executives and aircraft manufacturers are hoped- for readers.

The approach is systematic and presumes no previous knowledge of the structures and concepts of market- ing as a discipline. The most simple framework of the subject is adopted. A basic (Chartered Institute of Marketing) definition leads to a distinction between marketing and selling, then mention of the 4 P’s (Product, Price, Place, Promotion) - a classic mnemonic - and the marketing environment to comprise Chapter 1, ‘The relevance of marketing to the modern air freight industry.’ From this we are into an ‘Air freight market analysis’ (Chapter 2); ‘A short course in logistics’ (Chapter 3); ‘Air freight business and marketing strategies’ (Chapter 4); ‘Designing the product’ (Chapter 5); and a chapter each on pricing, distributing and effective selling, culminating in a two-page conclusion, ‘The application of marketing principles to the air freight industry’ (Chapter 9).

The view one takes of all of this largely depends on background and the motivation that leads to the book’s perusal. Certainly the book is uncluttered and written in an easy style with no presumption of the reader’s background in marketing and expecting little specific knowledge of the industry either, as the more technical and practical aspects are introduced in discrete stages and well explained.

The general tactic adopted is a mixture of descriptive introduction, opinion and anecdotal account (generally devoid of a numerical dimension) and there are no refer- ences, attributions to other authorities or sources to follow up. There are interesting cameos of selected aspects of the industry and one gets a feel, as the author intends, for the dynamic nature of marketing as participants

Journal of Air Transpon Management 1994 Volume I Number 2

attempt strategic initiatives that are in turn usurped by competitive responses. This is illustrated at many points in the book, but the examples of the role of air freight in passenger aircraft against the dedicated freight aircraft, and the way specialization in a wider dimension of service has evolved, are recurring themes. Thus the integrated operators emerge to satisfy customers’ needs in novel ways - the history of Federal Express is particularly interesting - and threaten the freight-forwarding distributors, but in turn new entrants, such as DHL, compete profits down to unsus- tainable levels, to restart the cycle.

Various market segments defined in terms of, for instance, speed of delivery, security, size and/or weight, vary in their appeal depending on geographic location, economic condi- tions, generation of aircraft and a host of other factors. The overall feel for the nature of the problem is well conveyed. The complexity that would naturally govern decision-making in this area, however, is largely bypassed, and these issues are hinted at rather than anaiysed or critically discussed.

If the intention of the word ‘effec- tive’ in the book’s title is to commu- nicate the overall relevance of marketing insights to the explication of complex business phenomena, and one feels that this is the author’s primary intention, then in a book of this length an efficient and interesting communication achievement can be noted.

In line with some of the author’s other books, a secondary objective is to encourage readers to participate in courses andfor consultancy contracts for further development in matching principles to specific practices. If this can be presumed in the current case the work does serve as an eye-opener and taste stimulant and (given the author’s experience in writing books around these various marketing themes) perhaps this is appropriate for current industry professionals and aspirants.

On the other hand, those who turn to Effective Air Freight Management with more sophisticated requirements, having already gained some under- standing of both marketing and the

specifics of the industry, will find little more in this book than a synthesis and overview.

The author is undoubtedly correct in seeing one of the main facilitators of effective marketing as the adoption of a marketing orientation throughout the enterprise, and especially at the top; though he is fully aware of the importance of junior staff as they interface with customers and have the power of decision over choice of carrier, for example. He is also supportive of the role of teamwork. More immediate objectives are also intended to be met; thus in his closing paragraph he hopes that readers will have had ‘messages which can be taken away and applied immediately to the job they have to do’. This is more ambitious.

Effective marketing requires a whole range of skills and compe- tences, all set in an appropriate conceptual framework. Almost certainly the translation of principles depends on a richer conceptualization than is even hinted at in this book. The subspecialities of marketing all have a contribution to make. This would include marketing research, market research, consumer behaviour, industrial buying behaviour, service marketing, marketing management and internal marketing amongst others. Considerable enrichment is possible in dealing with each of the 4 Ps. The simple approach is the one adopted and there is little or no insight given to alternatives that may be available. This could be illustrated in connection with almost every topic addressed but the point may be made with two indications. Thus the communication model AIDA (Attention, Interest, Desire, Action) is uncritically advanced and there is a defensive tone [‘sorry - more jargon!‘, p 341 that impedes the expression of any necessary qualification to the descriptive presentation of analytical concepts. This has the benefit of ensuring that virtually every section is quite short. There is copious use of subheadings, which facilitates ease of reading, so that the treatment accorded to any particular topic can be quickly accessed.

If the judgement of the market is correct, this would prove a widely

Journal of Air Transport Management 1994 Volume f Number 2

Book reviews

referred-to account, with the potential to springboard readers into further action. As an outline map of a hitherto underdevelo~d area of research, a useful job has been started.

John Driver School of Business

~nive~it~ of Birmi~gham~ UK

European Air Law: New Skies for Europe Franky de Coninck Z~ti~t du ~ra~~orf Aerien (1992) 336 pp 27OFF

In December 1987, the air transport industry in the European community operated almost as though the Community, and the Treaty of Rome, did not exist. Despite the confirma- tion by the European Court of Justice some 18 months previously that the Treaty’s competition rules applied to air transport, government-backed anti-competitive arrangements concerning air services still existed, national monopolies were prevalent and there was little sign in the air transport field of the ‘ever closer union’ among the peoples of Europe that was one of the basic objectives of the Treaty. However, by January 1993, only five years later, this situa- tion had radically changed, and it could truly be said that the legal framework for an internal air trans- port market, without national barri- ers, was then largely in place (although major changes in practice are likely to take longer to come about).

This book tells the story of that process, and gives a clear chronologi- cal outline of the Commission’s attempts to realize Community princi- ples in the air transport sector from the beginning, together with the reactions of Member States and the airlines, a description of the legal framework now in place, and a look at further measures likely to be taken in the future.

The liberalization of air transport in the Community has been achieved in two broad, complementary ways. In

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