AIRTECOMMAN - QUIZ 3 Reviewer

Oligopoly

is a market dominated by a few firms producing similar or differentiated products.

High Barriers to Entry

- Challenges include terminal space at hub airports, financial risks, and competition with established carriers.

- Major carriers benefit from extensive networks, making it hard for new entrants to compete.

Substantial Economies of Scale

- Larger operations result in lower long-term average costs.

Growth Through Merger

- Mergers increase market share, economies of scale, and resource efficiency.

Mutual Dependence

- Actions by one firm significantly affect others, resembling strategic games like chess.

Price Rigidity and Nonprice Competition

- Firms avoid frequent price changes, relying on advertising, customer service, and loyalty programs.

Airline Passenger Load Factor

measures the relationship between available seat-miles and revenue passenger miles.

Top Management

- Sets objectives, recommends goals to the board, and includes roles like President and Senior Vice Presidents.

- President often handles external relations, while executives focus on operations.

Middle Management

- Develops operational plans and oversees departmental activities.

- Includes vice presidents and directors heading departments and divisions.

Operating Management

- Executes plans and ensures day-to-day operations.

- Includes managers, supervisors, and section chiefs.

Low-Cost Carriers

- Employ lean organizational structures for efficiency.

- Middle management often eliminated to reduce costs.

President/CEO

Oversees overall operations and external relations.

Vice President/General Manager

Manages daily operations.

Planning

Sets global, departmental, and individual goals.

Includes policy and procedure creation.

Organizing

- Groups activities, assigns authority, and ensures efficient workflows.

- Establishes efficient lines of responsibility and authority.

Staffing

- Defines workforce needs, recruits, and trains employees.

- Involves compensating and developing employees.

Directing

- Assigns tasks and communicates objectives clearly.

- Tailors instructions based on employee experience.

Controlling

Monitors performance, compares against standards, and corrects deviations.

Steps- Set standards, compare performance, take corrective action.

Unity of Objective

Align all departments with company goals.

Span of Control

Limit the number of subordinates per manager.

Departmentalization

Group tasks and functions for specialization.

Delegation of Authority

Empower lower management to make minor decisions.

Levels of Management

Minimize layers for effective communication.

Defined Duties

Clearly outline job responsibilities to avoid overlap.

Flexibility

Adapt to changing conditions, both internal and external.

Communication

Ensure uninterrupted two-way information flow.

Organizational Chart

- Depicts authority relationships and communication channels.

- Boosts morale and clarifies roles.

Line Personnel

Directly involved in producing and selling air transportation (e.g., pilots, flight attendants).

Staff Personnel

Provide specialized support and advice (e.g., finance, legal, HR).

Finance

Manages revenue, accounting, and procurement.

Information Services

Maintains data systems and supports operational efficiency.

Personnel

Handles employee relations and training.

Medical

Provides health services and sets hiring health criteria.

Legal

Addresses claims, regulatory issues, and compliance.

Corporate Communications

Manages public relations and legislative lobbying.

Economic Planning

Oversees long-term forecasts and financial control.

Flight Operations

Ensures safe and efficient aircraft operation.

Engineering and Maintenance

Maintains equipment to safety standards.

Marketing and Services

Includes advertising, market research, and in-flight services.