AVMG 4200 Exam 2 Short Answer

SA1. Compare and contrast the roles and priorities of government regulators, private firms, and support organizations/associations.

Federal Agencies

•Protect the public

•Promote efficiency/commerce

Private Industry

•Move passengers & freight for profit

•Not injure customers/public

Support organizations

• ARINC (Aeronautical Radio Incorporated): provide private jet owners and operators with;

•advanced flight planning and weather, flight following, contract fuel, international trip support,

• data link or satellite communications

SA2. List and describe the 6 primary functions of the Federal Aviation Administration.

Operate and Maintain NAS

•Airspace

•Navaids

•Airports

•ATC

Certification of

•Airmen & Mechanics

• Aircraft & Manufacturers

• Air Carriers

• Flight & Ground Schools

Expand and Improve Airports & Airways

• ADAP/AIP can cover between 75-95% of airport development costs

•"Block Grant" vs. "Regional" Funding

Environmental Protection

• Noise Abatement

• 100LL Replacement

Civil Aviation Security Program

•Airport screening

• Anti-Hijacking Act 1974

Engineering & Development Research

• Support safety, security, and environmental responsibilities

• DABS "Mode S"

• NextGen

• ADS-B

SA3. Describe and discuss the roles of the ICAO/FAA, and IATA/ATA.

ICAO (International Civil Aviation Organization): Promotes planning and development of international air transport. It sets international standards.

FAA (Federal Aviation Administration): primary focus is ensuring safe and orderly growth of civil aviation

IATA (International Air Transport Association): Provides a forum for member states to coordinates tariffs, fares, rates and charges.

ATA (Air Transport Association): achieves the interests and goals of the airlines as an industry through a system of councils and committees

SA1. List and describe the "Traditional Value Density" factors of air cargo eligibility; describe how the modern supply chain perspective has greatly expanded the "value proposition" of air transportation.

Traditional Value Density Factors

•Expensive stuff moves in small batches

•Expensive stuff needs high security/TAV

•Expensive stuff captures capital

•Relationship between inventory and trans speed

Air offers

•Speed

•Reliability

•Visibility

•Security

•AND "door-door" (in/outsourced first/last mile)

SA2. Describe how the demand-supply relationship for air cargo presents unique challenges for the management of profitability for providers of air freight services.

Demand drives need for capacity

•Changes RAPIDLY up/down

Capacity has a long lead time

•Changes SLOWLY up/down

(We always have either "Too Much" OR "Not Enough")

Capacity captures a lot of capital

•Borrow money at high interest

Margins (ROA) are slim

•We can only offer slim returns

(We can never "cover the vig" of our cost of capital)

Impossible Yield/Revenue Mgmt (We can never set a price that covers the cost of supplying the demand we capture)

SA3. Discuss how air freight competes with other modal choices in terms of distance; describe the particular "coopetition" relationship between air freight and motor freight.

3.2 Competition

Radius of Ambivalence

•d