Transportation and Airline Industry: Modes, Networks, Economics & Metrics

What is intermodal transportation?

Using two or more forms of transportation during one trip.

What are the three broad categories of transportation?

Air, surface, and water transportation.

What are the four primary transportation modes?

Rail, automobile, bus, and air.

What is surface transportation?

Transportation that takes place over land or water.

What is Amtrak?

The National Railroad Passenger Corporation in the United States.

What is VIA Rail?

Canada's national passenger rail network.

What is high-speed rail?

Passenger rail designed to travel at much higher speeds than conventional trains.

What is Maglev transportation?

Train transportation that uses magnetic forces to travel above the track.

What is an advantage of automobile transportation?

Flexibility, convenience, and independence when traveling.

What is fly-drive tourism?

Flying to a destination and renting a car after arriving.

What does fleet utilization mean for rental car companies?

How effectively rental vehicles are being used rather than sitting unused.

What are the four types of bus transportation?

Local, charter/tour, airport, and commuter/rapid transit.

What is charter bus transportation?

A bus hired for a specific group, trip, tour, or event.

What is airport bus transportation?

Bus service connecting airports with hotels, cities, or other transportation points.

What is a hub-and-spoke system?

An airline network where smaller airports connect through a central airport.

What is a hub airport?

The central airport where passengers connect between flights.

What is a spoke?

A route connecting a smaller airport to a central hub.

What is a feeder market?

A smaller market that supplies passengers to a larger destination through an airline network.

What happened during airline deregulation in 1978?

Airlines gained greater freedom to set prices and enter or leave markets, increasing competition.

What is code-sharing?

When multiple airlines market the same flight using different airline codes or flight numbers.

What is a nonstop flight?

A flight that travels from origin to destination without stopping.

What is a direct flight?

A flight that keeps the same flight number but may make intermediate stops.

What is the difference between nonstop and direct flights?

Nonstop flights make no stops; direct flights may stop along the way.

Why do airlines use hub-and-spoke systems?

To connect more destinations and combine passengers through central airports.

How does deregulation affect airline competition?

It allows more pricing freedom and market competition among airlines.

What are three major airline innovations?

Hub-and-spoke systems, frequent-flier programs, and sophisticated reservation systems.

What is a frequent-flier program?

A rewards program where passengers earn points or miles for traveling.

What are the three major global airline alliances?

Star Alliance, Oneworld, and SkyTeam.

What is an interline agreement?

An agreement allowing airlines to sell or coordinate services across each other's networks.

What is a codeshare agreement?

An agreement where airlines market another airline's flight under their own flight code.

What is a joint venture between airlines?

An arrangement where airlines cooperate and share revenue on agreed operations.

What is an airline alliance?

A larger partnership where airlines cooperate to expand their networks and services.

What is the difference between an alliance and a codeshare?

An alliance is a broader partnership; codesharing involves marketing the same flight under different codes.

What is an oligopoly?

A market structure dominated by a small number of major companies.

Why is the airline industry considered an oligopoly?

A relatively small number of major airlines dominate much of the market.

What are barriers to entry?

Obstacles that make it difficult for new companies to enter an industry.

What are three airline barriers to entry?

High startup costs, limited airport gates, and established competitors.

What are economies of scale?

Cost advantages businesses gain as production or operations increase.

How can airlines benefit from economies of scale?

Larger operations can spread costs over more passengers and flights.

Why do airlines merge?

To increase market share, buying power, market power, and financial stability.

What are two major airline operating expenses?

Labor and fuel.

Approximately what percentage of airline operating expenses do labor and fuel represent in the slides?

Approximately 60%.

What does ASM stand for?

Available Seat Miles.

What does RPM stand for?

Revenue Passenger Miles.

What does yield mean in the airline industry?

The revenue earned per passenger mile.

What is airline load factor?

The percentage of available seat miles occupied by paying passengers.

What is the load factor formula?

Load Factor = (RPM ÷ ASM) × 100.

An airline has 800,000 RPM and 1,000,000 ASM. What is its load factor?

80%.

An airline has 600,000 RPM and 1,000,000 ASM. What is its load factor?

60%.

An airline has 900,000 RPM and 1,000,000 ASM. What is its load factor?

90%.

If an airline's RPM increases while ASM stays the same, what happens to load factor?

Load factor increases because more available seat miles are occupied by paying passengers.

What does the cruise industry combine?

Transportation, lodging, food, entertainment, and recreation.

What was water transportation primarily used for before the 1830s?

Immigration, trade, and warfare.

What company became an early pioneer of cruising around 1844?

P&O.

What was the Quaker City?

The first American cruise ship, which sailed in 1867.

When did cruising become popular among wealthy travelers?

The early 1900s.

What happened to cruising during the 1950s?

Air-cruise packages helped make cruising more accessible.

What are the three major cruise companies discussed in the slides?

Carnival, Royal Caribbean, and Norwegian.

Which cruise company is associated with freestyle cruising?

Norwegian.

What is freestyle cruising?

A cruise experience emphasizing flexibility for passengers.

Which cruise company is identified in the slides as the most financially successful?

Carnival.

Which cruise company is identified as the second largest?

Royal Caribbean.

What are the three cruise market classifications?

Mass, middle, and luxury.

What characterizes the mass cruise market?

Approximately $30,000-$60,000 annual income and $100-$300 daily expenditure.

What characterizes the middle cruise market?

Approximately $60,000-$80,000 annual income and $250-$500 daily expenditure.

What characterizes the luxury cruise market?

Over $150,000 annual income and $500+ daily expenditure.

What is a regional cruise?

A cruise traveling within a particular region, such as the Caribbean or Mediterranean.

What is a coastal cruise?

A smaller-ship cruise that travels near coastlines.

What is a river cruise?

A cruise that travels along rivers using smaller ships.

What is a barge cruise?

A small cruise traveling along inland waterways.

What is a steam boating cruise?

An American river cruise traditionally associated with the Mississippi River.

What is an expedition or natural cruise?

A cruise focused on exploring remote destinations and natural environments.

What is an adventure cruise?

A cruise emphasizing active exploration and adventurous activities.

What is a deluxe cruise?

A larger, resort-style cruise offering extensive amenities and services.

What is the captain responsible for?

The overall operation and responsibility of the ship.

What is the difference between a hotel manager and a cruise director?

The hotel manager oversees onboard hotel operations; the cruise director manages entertainment and activities.

What does the chief purser manage?

Financial, administrative, and human resource operations.

What does the chief steward oversee?

Housekeeping and passenger cabin services.

Who manages food and beverage operations on a cruise ship?

The Food and Beverage Manager.

Who is responsible for overall ship operations?

The Captain.

Who organizes onboard entertainment and activities?

The Cruise Director.

What are the five historical eras of tourism?

Empire Era, Middle Ages and Renaissance Era, Grand Tour Era, Mobility Era, and Modern Era.

What happened in 776 B.C. that relates to tourism history?

The early Olympic Games took place in Greece.

What increased during the 13th century?

Religious travel.

What transportation became more common during the 17th century?

Horse and carriage travel.

What contributed to tourism growth during the 19th century?

Rail transportation and cruising.

What contributed to tourism growth during the 20th century?

Automobile and air transportation.

How does the UNWTO define tourism?

Activities involving travel outside one's usual environment for no more than one consecutive year for leisure, business, or other purposes.

What are the five tourism classifications?

Inbound, outbound, domestic, internal, and national.

What is inbound tourism?

Nonresidents traveling into a particular country.

What is outbound tourism?

Residents traveling from their country to another country.

What is domestic tourism?

Residents traveling within their own country.

What is internal tourism?

The combination of inbound and domestic tourism.

What is national tourism?

The combination of domestic and outbound tourism.

A Japanese tourist visits Hawaii. What classification is this for the United States?

Inbound tourism.

A Hawaii resident travels to California. What classification is this?

Domestic tourism.

An American travels to Japan. What classification is this for the United States?

Outbound tourism.

What is the formula for internal tourism?

Inbound + Domestic.

What is the formula for national tourism?

Domestic + Outbound.

What are three economic benefits of tourism?

Economic growth, employment, and tax revenue.