Aviation Sector Value Chain and Key Players

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Questions and Answers

Which of the following best describes the role of airlines within the aviation value chain?

  • They manufacture the aircraft used in the industry.
  • They lease aircraft to other companies.
  • They act as integrators, delivering products from various parts of the supply chain to customers. (correct)
  • They regulate safety and security standards across the aviation system.

In the context of the aviation industry, what is the primary function of Aircraft Leasing Companies?

  • To regulate airline ticket pricing.
  • To manufacture aircraft and sell them to airlines.
  • To purchase aircraft and lease them to airlines. (correct)
  • To provide air traffic control services.

How do airports generate the majority of their revenue?

  • From passenger ticket sales and taxes.
  • From landing fees, concessions, parking, and leasing. (correct)
  • From government subsidies and grants.
  • From airline membership fees and cargo handling charges.

What role do Computer Reservation Systems (CRS) play in the aviation industry?

<p>They organize distribution within the industry. (A)</p> Signup and view all the answers

Which of the following is the MOST direct responsibility of Air Navigation Service Providers (ANSPs)?

<p>Managing air traffic safety and efficiency. (A)</p> Signup and view all the answers

Which of the following activities is typically performed by MRO (Maintenance, Repair, and Overhaul) providers in the aviation industry?

<p>Conducting routine and heavy maintenance on aircraft. (D)</p> Signup and view all the answers

In the aviation context, what is the role of regulatory authorities such as the FAA, EASA, and ICAO?

<p>To set safety, security, and environmental regulations. (D)</p> Signup and view all the answers

Which of the following best describes the function of Online Travel Agencies (OTAs) within the aviation ecosystem?

<p>Facilitating flight bookings and providing digital travel agency services. (D)</p> Signup and view all the answers

What is a significant role of industry associations like IATA and ACI in the aviation sector?

<p>Advocating for industry-wide policies and collaboration. (A)</p> Signup and view all the answers

Why is an integrated view of the aviation value chain important for countries that strategically develop aviation as a key element of their economy, such as Singapore or Dubai?

<p>To treat the aviation system as an integrated entity, aligning airport development with the needs of home carriers and other stakeholders. (C)</p> Signup and view all the answers

Flashcards

Aircraft Manufacturers (OEMs) & Aerospace Suppliers

Entities that design, develop, and manufacture aircraft for various uses, and supply related parts and subsystems.

Airlines (Passenger & Cargo Carriers)

Companies that provide air transportation services for passengers and cargo, both domestically and internationally.

Air Navigation Service Providers (ANSPs) & Air Traffic Control (ATC)

Entities that manage air traffic to ensure safety and efficiency, providing navigation and route planning services.

Airports & Terminal Services

Entities providing the physical locations and services necessary for aircraft takeoff, landing, and passenger handling.

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Aerospace & Defense Sector

A sector that develops military aircraft, defense systems and aerospace technology for national defense and security.

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Regulatory Authorities & Industry Associations

Organizations that set safety, security, and environmental regulations.

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Aircraft Leasing Companies

Companies that purchase aircraft and lease them to airlines. Examples AerCap, Air Lease Corporation, Avolon

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Ground Handling & MRO (Maintenance, Repair, Overhaul)

Providers offering baggage handling, aircraft servicing, and catering.

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Travel & Distribution (Global Distribution Systems & OTAs)

Facilitate flight bookings and ticket distribution digital service.

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Aviation Fuel Supply & Jet Fuel Distribution

Refine, distribute and supply jet fuel to airlines.

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Study Notes

  • The aviation sector's value chain consists of interconnected industries.
  • This chain includes manufacturers, lessors, ground services, airlines, computer reservation systems, travel agents, and freight forwarders.

Key Players and Their Turnover

  • Aircraft manufacturers account for approximately 7% of the turnover.
  • Leasing companies make up about 30%.
  • Airports contribute around 26%.
  • Ground services account for roughly 6%.
  • Computer reservation systems also represent about 6%.
  • Airlines hold a significant portion with 15%.
  • Online travel agencies make up around 3%

The Airline Industry

  • Airlines are crucial as they integrate various products and services within the aviation supply chain.
  • Airlines deliver these integrated products to customers.

Strategic Development and Integration

  • Countries like Singapore and Dubai strategically develop aviation as a key economic element.
  • These countries treat the entire aviation system as an integrated entity.
  • Local airports are often developed to meet the specific needs of the home carrier.

Aircraft Manufacturers and Aerospace Suppliers

  • These entities design, develop, and manufacture aircraft for various purposes, including commercial, cargo, business, and military use.
  • They supply essential parts and subsystems like engines, avionics, and landing gear.
  • Notable commercial aircraft manufacturers include Boeing, Airbus, Embraer, and Bombardier.
  • Key engine manufacturers are Rolls-Royce, GE Pratt & Whitney, and Safran.
  • Avionics and systems are provided by companies like Honeywell, Thales and Rockwell Collins.

Airlines (Passenger & Cargo Carriers)

  • Airlines offer air transportation for both passengers and cargo.
  • They operate flights on domestic, regional, and international routes.
  • Full-Service Carriers (FSCs) include Delta, American, Lufthansa, and Singapore Airlines.
  • Low-Cost Carriers (LCCs) consist of Ryanair, Southwest, AirAsia, and Wizz Air.
  • Cargo airlines are represented by FedEx, UPS, Qatar Airways Cargo, and Emirates SkyCargo.

Airports & Terminal Services

  • These provide essential infrastructure for takeoff, landing, and passenger services.
  • Revenue is generated through landing fees, concessions, parking, and leasing.
  • Prominent airport operators include Heathrow Airport Holdings, Fraport, and Dubai Airports.
  • Retail and duty-free services are offered by entities like Dubai Duty Free and WHSmith.

Air Navigation Service Providers (ANSPs) & Air Traffic Control (ATC)

  • These entities manage air traffic to ensure safety and efficiency.
  • ANSPs provide navigation and route planning services.
  • Government-run ANSPs include the FAA (USA), EUROCONTROL (Europe), and NATS (UK).
  • A private ANSP is NAV CANADA.

Ground Handling & MRO

  • They handle activities such as baggage handling, catering, aircraft servicing, and fueling.
  • These organizations conduct routine and heavy maintenance, as well as component repairs.
  • Ground handling services are provided by Swissport and DNATA.
  • MRO providers include Lufthansa Technik, ST Engineering, and AAR Corp.

Regulatory Authorities & Industry Associations

  • Responsible for establishing safety, security, and environmental regulations within the aviation industry.
  • These authorities advocate for industry-wide policies and collaboration.
  • Notable regulators include the FAA (USA), EASA (Europe), and ICAO (global).
  • Key industry associations are IATA (airlines) and ACI (airports).

Aviation Fuel Supply & Jet Fuel Distribution

  • Refine, distribute, and supply jet fuel to airlines.
  • They also manage airport fueling infrastructure.
  • Major oil companies include Shell Aviation, Air BP, and ExxonMobil Aviation.
  • Fueling services are offered by companies like World Fuel Services and Air BP.

Aerospace & Defense Sector

  • Develop military aircraft, defense systems, and aerospace technology.
  • Key players in this sector include Lockheed Martin, Northrop Grumman, Raytheon, and BAE Systems.

Travel & Distribution

  • Facilitate flight bookings and ticket distribution.
  • These companies also offer digital travel agency services.
  • Global Distribution Systems (GDS) include Amadeus, Sabre, and Travelport.
  • Online Travel Agencies (OTAs) are Expedia, Skyscanner, and Kayak.

Aircraft Leasing Companies

  • Purchase aircraft and lease them to airlines.
  • Major players in this market are AerCap, Air Lease Corporation, and Avolon.

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