Describe with examples the different types of airline business models that exist today?


Read the material uploaded on BREO and answer the following questions


Question 1: In section 1.1 p.4 “The nature of the airline product”, the author states that “The demand for passenger air services is a derived demand”.


  • Using evidence in the section, explain what the author means by “derived demand”? More broadly, in what way has the “un-bundling” of the travel product changed the demand for air transport (200 words)
  • Explain with examples what factors would influence the number of passengers that travel by air in any given year? Please use other parts of the case study and knowledge acquired during the course to answer your question. (200 words)


Question 2: In section 1.2 p. 5, the author states that “not all airlines are the same”…”quite different business models have emerged”


2.1 Describe with examples the different types of airline business models that exist today? (200 words)

2.2 What competitive advantage do these different models enjoy, and why? (200 words)


Question 3: : In section 1.2 p. 6, the author explains that some airlines have come to develop hubs “where passengers could transfer from one flight to another to fly between two points”


  1. 1 Explain with examples the principle of an airport hub and how airlines operate flights to and from hubs? (200 words)

3.2 What specific resources would you find at an airport hub, and what are the advantages and disadvantages for an airport of operating as a hub? (200 words)


Question 4: In section 1.5, p. 10, the author displays in Figure 1.2 the profit and loss of the airline industry over the 2000 to 2017 period


4.1 Explain why the airline industry was struggling to make profits until 2009, but has been profitable since 2010? (200 words)

4.2 The graph shows that in 2008, the airline industry lost 30 billion Dollars. Explain why 2008 was such a challenging year for the airline industry? (200 words)


Question 5: In section 1.7, p. 15, the author states that “Boeing 787 and Airbus A350 aircraft offer seat-km costs that are almost comparable [to bigger aircraft] while offering the flexibility of being operated on thinner, longer routes or denser routes needing higher frequencies”


5.1 Explain what is specific about the design and manufacturing of the B787 and A350, in comparison with previous generation aircraft? (200 words)

5.2 Explain using examples why airlines would operate these aircraft? (200 words)

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