PREFACE |
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xxiii | |
CHAPTER 1 INTRODUCTION TO THE AIRLINE INDUSTRY |
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The Importance of Air Transport |
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The Size and Scope of Air Transportation |
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Lufthansa German Airlines |
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Internal and External Factors Influencing Management |
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CHAPTER 2 AIRLINE ECONOMICS |
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Airlines Inevitably Produce Excess Capacity |
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Airline Capacity has a Short Shelf Life |
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Excess Capacity is not Easily Reduced |
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Demand is Highly Cyclical and Highly Influenced By External Events |
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Many Consumers View Air Transportation as a Fungible Commodity |
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Demand is Highly Segmented |
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Other Factors Influencing Economic Performance |
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Theory of Perfect Competition |
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Theory of Economic Regulation |
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CHAPTER 3 FINACE |
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Contemporary Crisis Compared with Past Economic Downturns |
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133 | |
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Causes of Unsatisfactory Financial Performance |
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138 | |
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The Cost/Price Disconnect |
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138 | |
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The Demand/Capacity Disconnect |
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SEC and DOT Requirements and Company Financial Statements |
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143 | |
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Debt: On Balance Sheet, and Off |
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153 | |
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Industry Capital Requirements |
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163 | |
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168 | |
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169 | |
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Additional Investment from Existing Investors, Debt Holders or Equipment Manufacturers |
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169 | |
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170 | |
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171 | |
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Trading Labor Concessions for Equity |
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172 | |
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Governmental Economic Assistance |
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172 | |
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The Traditional Debt and Equity Markets |
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175 | |
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CHAPTER 4 ECONOMIC RATIONALITY |
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189 | |
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204 | |
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Asset Acquisitions and Horizontal Integration |
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214 | |
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CHAPTER 5 LAW AND REGULATION |
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225 | |
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226 | |
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Certificates of Public Convenience and Necessity |
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228 | |
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228 | |
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Foreign Ownership Restrictions |
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231 | |
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Carrier Selection for International Routes |
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232 | |
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Transfer of International Routes |
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233 | |
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Foreign-Flag Air Carrier Permits |
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233 | |
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235 | |
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235 | |
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Federal Preemption of State Regulation |
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236 | |
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Unfair and Deceptive Practices |
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238 | |
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False and Misleading Advertising |
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238 | |
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239 | |
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242 | |
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Consumer Credit Protection |
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242 | |
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Code Sharing and other Intercarrier Agreements |
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243 | |
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Computer Reservations Systems |
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245 | |
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246 | |
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248 | |
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248 | |
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Airline Reporting Requirements |
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249 | |
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249 | |
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250 | |
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251 | |
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256 | |
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260 | |
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262 | |
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269 | |
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Aircraft Ownership, Leasing and Finance |
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274 | |
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The Role of Lawyers in the Airline Business |
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276 | |
CHAPTER 6 PRODUCT DESIGN: ORGANIZING AND PLANNING |
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279 | |
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280 | |
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286 | |
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Route Structures: Hub-and-Spoke vs. Linear Route Systems |
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294 | |
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307 | |
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310 | |
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314 | |
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Regional Feeders and Franchisees |
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322 | |
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CHAPTER 7 MARKETING |
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325 | |
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Determining Consumer Preferences |
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Evolving Consumer Preferences |
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342 | |
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345 | |
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347 | |
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Developing Synergies from Economies of Scale and Scope |
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351 | |
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352 | |
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Conservative vs. Aggressive Growth Strategies |
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353 | |
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Performance Monitoring and Evaluation |
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359 | |
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362 | |
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364 | |
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368 | |
CHAPTER 8 PRODUCT DELIVERY: OPERATIONS |
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371 | |
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372 | |
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376 | |
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The Airline Business as a Service Industry: The Importance of Human Resources |
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381 | |
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395 | |
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Auxiliary In-Flight Services |
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401 | |
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Auxiliary Non-Flight Services |
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403 | |
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Who Has the Best Product? |
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406 | |
CHAPTER 9 REVENUE AND INVENTORY MANAGEMENT |
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411 | |
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Yield (Revenue) Management |
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423 | |
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437 | |
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438 | |
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Types of Fare Restrictions |
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440 | |
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443 | |
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Liquidating Unsold Inventory |
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444 | |
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Consumer Savings Under Deregulation: The Ten Billion Dollar Myth |
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446 | |
CHAPTER 10 PROMOTION AND DISTRIBUTION |
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453 | |
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The Evolution of Airline Reservations Systems |
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455 | |
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The Airline Tariff Publishing Company |
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460 | |
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The Big Four Global Distribution Systems |
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460 | |
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460 | |
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461 | |
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462 | |
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Other Computer Reservation Systems |
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463 | |
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463 | |
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467 | |
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469 | |
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The Airline Reporting Corporation |
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474 | |
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476 | |
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476 | |
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479 | |
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Corporate Travel Departments |
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483 | |
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484 | |
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485 | |
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487 | |
CHAPTER 11 COST CONTAINMENT |
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The Impact of the Low-Cost Carriers |
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494 | |
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Overview of Operating Costs |
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503 | |
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Operational and Equipment Costs |
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507 | |
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520 | |
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522 | |
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Marketing and Distribution Costs |
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540 | |
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547 | |
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550 | |
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552 | |
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552 | |
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554 | |
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554 | |
CHAPTER 12 LABOR-MANAGEMENT RELATIONS |
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557 | |
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559 | |
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563 | |
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570 | |
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571 | |
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574 | |
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Labor Protective Provisions |
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575 | |
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Employment Discrimination |
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577 | |
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580 | |
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595 | |
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596 | |
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601 | |
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602 | |
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609 | |
CHAPTER 13 ALLIANCES |
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619 | |
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International Marketing Alliances |
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622 | |
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Intercarrier Relationships: Taxonomy |
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622 | |
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Major Costs and Benefits of Airline Alliances |
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624 | |
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Computer Reservations Systems Bias |
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628 | |
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Computer Reservations Systems Alliances |
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642 | |
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Frequent Flyer Program Alliances |
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643 | |
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International Equity Alliances |
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646 | |
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646 | |
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647 | |
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650 | |
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650 | |
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654 | |
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655 | |
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656 | |
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657 | |
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The Antitrust Dimensions of International Alliances |
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657 | |
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Northwest/KLM—The Hole in the Dyke |
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657 | |
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Antitrust Immunity Since NW/KLM—The Dyke Bursts |
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659 | |
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The Sherman and Clayton Acts |
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660 | |
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Collusion to Restrain Trade |
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661 | |
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662 | |
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664 | |
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Emergence of the Global Mega-Carriers |
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669 | |
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Public Policy and International Aviation |
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675 | |
CHAPTER 14 COMPETITION AND ANTITRUST LAW |
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Legal Analysis of Predation |
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681 | |
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The Spirit of Free Enterprise |
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681 | |
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686 | |
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Monopolization Under the Antitrust Laws |
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693 | |
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Expansion of Output or Capacity, |
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696 | |
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698 | |
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704 | |
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705 | |
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Refusal to Deal with a Competitor |
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709 | |
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Refusal to Share an Essential Facility |
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710 | |
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717 | |
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Exclusive Dealing Arrangements |
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724 | |
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725 | |
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Application of the Competition Laws to Commercial Aviation |
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725 | |
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726 | |
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Entry Barriers at Slot-Constrained Airports |
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729 | |
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734 | |
CHAPTER 15 PREDATION |
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743 | |
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Empirical Evidence of Predation |
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747 | |
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747 | |
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756 | |
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Examples of Predatory Pricing by Major Airlines |
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757 | |
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Major Network Airline Competitive Response to Entry by Another Major Network Airline |
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768 | |
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Denver-Philadelphia: United vs. USAIR |
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769 | |
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Minneapolis/St. Paul-Cleveland: Northwest vs. Continental |
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770 | |
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Major Network Airline competitive Response to Entry by Southwest Airlines |
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771 | |
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St. Louis-Cleveland: TWA vs. Southwest |
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772 | |
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St. Louis-Detroit: Northwest vs. Southwest |
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773 | |
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Major Network Airline Predatory Response to New Entrant Airlines |
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774 | |
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Atlanta-Newark: Continental vs. Kiwi |
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775 | |
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Dallas/Ft. Worth-Wichita: American vs. Vanguard |
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776 | |
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Dallas/Ft. Worth-Colorado Springs: Delta and American vs. Western Pacific |
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779 | |
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United Airlines' Response to Markair's Entry at Denver |
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781 | |
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Denver-Seattle: United vs. Markair |
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781 | |
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Denver-San Francisco: United vs. Markair |
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782 | |
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Denver-Atlanta: United vs. Markair |
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783 | |
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United Airlines' Response to Frontier Airlines' Entry at Denver |
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784 | |
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Denver-Tucson: United vs. Frontier |
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784 | |
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Denver-Phoenix: United vs. Frontier |
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786 | |
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Denver-Las Vegas: United vs. Frontier |
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787 | |
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United Airlines' Response to Reno Air's Entry at Denver |
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789 | |
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Denver-Reno: United vs. Reno |
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789 | |
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790 | |
CHAPTER 16 MONOPOLY POWER |
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795 | |
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Minneapolis/St. Paul Fares are Among the Nation's Highest |
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800 | |
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Minneapolis/St. Paul Air Travel Suppressed by High Air Fares |
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801 | |
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Airline Shares of Minneapolis/St. Paul Traffic |
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803 | |
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Northwest Acquires Republic Airlines |
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811 | |
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Northwest Falls to a Leveraged Buy-Out |
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815 | |
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The Corporate Raiders Circle |
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816 | |
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Northwest Struggles with the Debt Burden |
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817 | |
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Northwest's Fleet Age Ascends |
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818 | |
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Labor Bails Out Northwest |
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819 | |
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The State of Minnesota Bails out Northwest |
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820 | |
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Northwest Accuses American Airlines of Predatory Pricing |
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821 | |
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821 | |
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822 | |
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Northwest's Predatory Pricing Lawsuit Against American Airlines |
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822 | |
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Northwest's Response to New Entrant Airlines |
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824 | |
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827 | |
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Northwest vs. Spirit Airlines |
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830 | |
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833 | |
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Northwest vs. Western Pacific Airlines |
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834 | |
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Northwest vs. Kiwi International |
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835 | |
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835 | |
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Northwest vs. Valujet/Airtran |
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836 | |
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Northwest vs. Vanguard Airlines |
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838 | |
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Northwest vs. Sun Country Airlines |
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840 | |
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Sun Country Airlines Begins Scheduled Service at Minneapolis/St. Paul |
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840 | |
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Northwest Drops Fares Sharply |
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843 | |
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Northwest Expands Capacity |
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850 | |
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Northwest Capacity Growth has been Directed Toward its Lowest Margin Routes |
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854 | |
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Northwest vs. Frontier Airlines |
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854 | |
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DOT Policy on Unfair Exclusionary Practices |
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856 | |
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Northwest's Defense to Allegations that it Engages in Predatory Conduct |
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861 | |
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865 | |
CHAPTER 17 STRATEGIC PLANNING |
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875 | |
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878 | |
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883 | |
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886 | |
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888 | |
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891 | |
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Linear Route, Point-to-Point Carriers |
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897 | |
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899 | |
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900 | |
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Small Aircraft Transportation System |
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904 | |
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905 | |
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917 | |
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921 | |
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924 | |
CHAPTER 18 STRATEGIES |
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927 | |
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927 | |
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Evolving Categories Under Deregulation |
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931 | |
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932 | |
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939 | |
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939 | |
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943 | |
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945 | |
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946 | |
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950 | |
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953 | |
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961 | |
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Conclusion |
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