Airline Passenger Marketing and Airport Operations Management

Comprehensive vocabulary flashcards covering airline marketing strategies, economic principles of demand, pricing tactics, and airport operations management based on 14 CFR Part 139.

Marketing Mix

The types and amounts of controllable marketing-decision variables (Product, Price, Promotion, and Place) that a company uses over a particular time period.

Product

In airline marketing, the entire travel experience and service provided to passengers, including safety, on-time performance, and cabin services.

Promotion

The method an airline uses to communicate with customers to inform, persuade, and remind them about its services, such as through advertising and loyalty programs.

Place

The marketing mix variable referring to how and where customers can access and purchase an airline's services, such as online booking platforms and travel agencies.

Uncontrollable Variables

Factors the marketer must contend with that are outside of company control, including cultural differences, the political environment, and the economic climate.

Scheduled Airline

An air carrier that flies to different destinations using a published time schedule and operates under a specific government-issued flight certificate.

Market Segmentation

The process of dividing potential customers for a product or service into meaningful consumer groups to identify a target market.

Mercantile Travel

A market segment accounting for air travel by retailers, wholesalers, and manufacturers flying to conferences, trade shows, and special previews.

Intensive Growth Strategies

Concerted efforts to penetrate existing target markets, increase product development, and develop new target markets.

Market Penetration

An airline strategy used to attract more customers within its existing market by using promotional fares and customer loyalty programs.

Market Development

The strategy of selling an airline's existing services to new customer groups or target markets identified through demographic and psychographic factors.

Demand

The various amounts of a product or service that consumers are willing and able to purchase at various prices over a particular time period.

Elasticity of Demand

A measure used by forecasters and price analysts to determine how responsive or sensitive passengers are to a change in the ticket price.

Elastic Demand

Occurs when passengers are highly responsive to price changes; a small price decrease results in a larger percentage increase in travelers, causing price and total revenue to move in opposite directions.

Inelastic Demand

Occurs when passengers are relatively unresponsive to price changes; a change in price results in a smaller percentage change in passengers, causing price and total revenue to move in the same direction.

Unit Elasticity

The borderline case where the percentage change in price and the percentage change in number of passengers are equal, resulting in an elasticity coefficient of exactly $1$.

Normal Fares

Also called standard or basic fares, these are the backbone of the fare structure and apply to all passengers at all times without restriction.

Joint Fares

Single fares that apply to transportation over the joint lines or routes of two or more carriers determined by an agreement between them.

Promotional Fares

Discounted fares offered with restrictions such as minimum length of stay or day of the week to supplement the normal fare structure.

ATPCO

The Airline Tariff Publishing Company; the industry's centralized system for managing and distributing airfare information.

Dilution

The loss of revenue resulting from passengers purchasing a lower fare who would have traveled anyway at the prior higher fare.

Spill

Traffic that is picked up by a carrier because a competitor cannot accommodate the potential demand due to excessively high load factors.

Inventory Management

The process of deciding how many seats should be sold at each fare class to maximize the revenue of every flight.

Direct Operating Costs

Expenses associated with and dependent on the type of aircraft operated, including fuel, flight crew salaries, maintenance, and depreciation.

Indirect Operating Costs

Expenses that remain unaffected by aircraft type because they are passenger-related or general administrative costs, such as ticketing and station expenses.

Fixed Costs

Expenses that remain the same regardless of how much an airline flies in the short term, such as aircraft lease payments and administrative salaries.

Variable Costs

Expenses that change depending on the volume of operations (Available Seat-Miles produced), such as fuel and landing fees.

Available Seat-Miles (ASMs)

The measure of capacity or output for an airline, representing the number of seats available multiplied by the number of miles flown.

Revenue Passenger Miles (RPMs)

The measure of passenger traffic, representing the number of paying passengers multiplied by the number of miles they fly.

Passenger Load Factor (PLF)

The percentage of available seating capacity that is actually used, calculated by dividing $RPMs$ by $ASMs$.

Class I Airport

An airport classified under 14 CFR Part 139 that serves scheduled large air carrier operations (at least 31 seats) and small air carrier operations.

Airport Certification Manual (ACM)

A comprehensive list of operational procedures compiled by an airport to comply with 14 CFR Part 139 requirements.

Flexible Pavement

Asphalt-based runway surface common at smaller airports with a lower initial construction cost and a typical lifespan of $15-20$ years.

Rigid Pavement

Concrete-based runway surface common at large commercial airports that is better suited for heavy aircraft and has a typical lifespan of $20-40$ years.

Spalling

Fracturing along concrete joints caused by trapped materials (sand, debris) creating pressure during expansion.

75-25 Rule

A concept stating that pavement deteriorates slowly for the first three-fourths of its service life but accelerates rapidly in the final quarter.

Dynamic Hydroplaning

A condition where aircraft tires ride on a layer of water, losing contact with the runway surface.

ARFF Index

A classification assigned by the FAA based on the length of the largest air carrier aircraft using the airport and its average daily departures.

Safety Management System (SMS)

A formal, top-down business-like approach to managing safety risk, composed of safety policy, safety promotion, safety risk management, and safety assurance.

Safety Risk Management (SRM)

The operational foundation of SMS consisting of five phases: system description, hazard identification, risk determination, risk assessment, and risk mitigation.