1. AB: Network Management

network

 key strategic factor of airlines, as it is the main driver for generating revenue and costs as well as a source of competitive strength or weakness.

network strategy

network design

alliances

network planning

4 steps of process of network management

Network strategy

This is the highest level of network decision with two to three years’ horizontal time ahead, including fleet development, financial targets and alliances for passage, cargo and maintenance production lines – forecast 

Network design

this is the translation of the network strategy into network configuration (HS or PP), connectivity, and hub developments. It includes long and medium term fleet planning and supply issues such as frequency, aircraft rotation and hub waves design 

Alliances

the network can be broadened by incorporating the departures of alliance partners in order to increase the offer to customers. No airline has– or it is likely to develop– a truly global network 

Network planning

refers to short-term adjustments of scheduled and production planning on a day-to-day basis which takes place every semester. Those include action to optimize connection time at the hub, ad-hoc changes of the aircraft size, crew planning, punctuality and baggage irregularity. This process follows the short-term demand fluctuation and competitor moves. – short term, problems that just occurred, ad hoc adjustments

Network strategy

Airline B management is deciding whether to purchase two more B737 Max to boost their new flight routes in Asia-Pacific, to increase airline reach target.  This type of decision falls under which network process

Network design

The management of Airline B , after acquiring two additional B737s, decided to increase point-to-point flights from Singapore to Kota Kinabalu, and use the new equipment (aircrafts)  to increase frequency of Airline B flights in this route  . This type of network management decision falls under which network management process?

Network planning

Airline B , due to unexpected slump of market demand, needs to downsize equipment (aircrafts) from A380 to B737 flying from MNL to HKG. This decision is an ad-hoc change in response to the present market. Under which  network management process will this management decision fall? 

Hub and Spoke 

• network structures allow airlines to serve many O-D markets with fewer flight departures, requiring fewer aircraft that generate fewer ASKs at lower total operating costs than in a complete point-to-point route network.

• Enables flights from various spokes to be routed through the central hub, where passengers are combined to a common destination 

• Enables passengers to stay on the same airline or travel on-line all the way through their final destination

• used by full service airlines 

connecting bank

• refers to a scheduled operation in which many aircraft arrive at the hub airport, passengers and baggage removed between connecting flights, and the aircraft then depart with the connecting passengers and baggage on board.

Point-to-Point or Direct route 

• Direct service from one airport to another without stopping at a third point. 

• Used when: distance between two cities is small, demand between two cities is high, total number of cities served by the airline is small. 

economies of scale

centralizing operations at the hub leads to

longer

Since at least two trips are required to reach destinations other than the hub, distance travelled may be______ than direct trip between departure and destination points.

a. shorter

b. longer

long range capability of aircraft

high speed or long range

secondary airport

low cost carriers