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TH2105 THE AIR TRANSPORTATION INDUSTRY Introduction Air transportation has been essential in economic growth and is a vital element for the world’s transpo...

TH2105 THE AIR TRANSPORTATION INDUSTRY Introduction Air transportation has been essential in economic growth and is a vital element for the world’s transportation infrastructure. It is one of the fastest developing transportation sectors as the global economy continued to be more connected (Beers, 2020). Air transportation also plays a vital role in tourism, especially in developing countries. It provides 87.7 million jobs worldwide and generates employment opportunities within airline companies, air navigation services providers, and airport operators. Many suppliers support air travel, which is not known to many. It consists of an intricate network of airports, air traffic control centers, food services, maintenance departments, airport hotels, shuttle vans, industry associations, aircraft manufacturers, and security teams (Mancini, 2013). The Airline Industry Commercial, general, and military are the three (3) structured components of the airline industry. Flights used for personal, business, executive, and flight instruction are under general aviation. The government uses military airlines for both transport or warfare. Commercial airlines operate according to a schedule and fly with regular routes with pre-booked tickets (Vault, n.d.). Airlines are defined as air transport services providers for passengers or freight that may exist in different shapes and sizes worldwide. According to the article published by Zippia (a career data collector) on March 16, 2021, two (2) of the largest commercial airlines, in terms of revenue in 2019, were Delta Air Lines and American Airlines. There are about over 5,000 airlines worldwide based on the number of listed International Civil Aviation Organization (ICAO) or International Air Transport Association (IATA) airline codes. Still, only more than 700 commercial airlines operate globally. Classifications of Airlines Airlines can be divided into two (2) major classifications: Local/Domestic Carriers – These are airlines that only offer services within a country or travel within the national boundaries. Examples are PAL Express and Cebgo. International/Foreign Carriers – These airlines offer services among multiple countries or travel to local and international territories. Examples are American Airlines, Delta Airlines, All Nippon Airways, Cathay Pacific, and Philippine Airlines. Other countries have more classifications of airlines due to the presence of interstates, cities, and regions. These are the following: Major Airlines – These are large carriers that fly direct routes between major cities and long-haul and international routes. They generate more than 1 billion dollars in revenue annually and are considered the largest employers among airlines. National Airlines – These are airlines that cater to services within the national boundary. They generate between 100 million to 1 billion dollars as annual operating revenues. Regional Airlines – These airlines maintain schedules within the country only, operating long and short- haul routes. They are divided into three (3) subgroups: o Large Regionals – These airlines have annual revenue of 20 to 100 million dollars with more than 60 seats. o Medium Regionals – These airlines have operating revenue of under 20 million dollars and use small aircraft with an average of 40-60 seats. o Small Regionals – These airlines are usually referred to as “commuter airlines” and use small 01 Handout 1 *Property of STI  [email protected] Page 1 of 5  TH2105 aircraft with less than 40 seats. Airlines may also be classified based on their operations, as follows: Scheduled Airlines – These airlines operate based on a schedule and regular routes. Non-scheduled Airlines – These are also called charter airlines. These airlines do not fly based on schedule and usually operate during off-peak hours, and are flexible in terms of choice of airport, flight times, and load factors. Airline Routes and Flight Length An airline route refers to a designated route for aircraft flying from a specific airport to another at specified minimum altitudes. Flight length refers to the distance of a flight from the point of origin to the destination. Flight length can be divided into four (4) categories: Short-haul – It is a form of travel by air for less than three (3) to four (4) hours. Examples are Manila – Japan; Singapore – Maldives. Medium-haul – It is a form of travel by air for about four (4) to eight (8) hours. Examples are Manila – Dubai; Qatar – Morocco. Long-haul – It is a form of travel by air that takes up to 13 hours. Examples are Manila – San Francisco; Manila – Copenhagen; Singapore – Norway. Ultra-long-haul – It is a form of travel by air that is beyond 13 hours. Examples are Manila – New York/Toronto; Qatar – Sao Paulo; London – Sydney. Types of Flights The types of flights vary according to the number of stops between travel from one airport to another. The following are the types of flights: Nonstop Flight – This is where a traveler goes from Point A to Point B on the same aircraft, having no stop in between. For example, an American Airlines flight taking off from LAX (Los Angeles International Airport, California) to JFK (John F. Kennedy International Airport, New York City) with no stop in between. Direct Flight – This is where a traveler goes from Point A to Point B on the same aircraft but will have to stop at another airport in between. The reasons for the stop may include unloading and picking up passengers and performing technical matters such as maintenance or refueling. For example, Manila- Taipei-Osaka, where a passenger has one (1) flight number all the way, but the aircraft has to stop in Taipei, Taiwan, to unload and pick up passengers going to Osaka, Japan. It is sometimes called a continuing or one-stop flight. Connecting Flight – This is where a traveler must change planes with different flight numbers once or more to get to his/her destination. For example, the Los Angeles-Dallas-New York flight. A flight of American Airlines goes from Los Angeles and stops in Dallas, Texas, where the passengers are transferred to another aircraft with a different flight number to bring them to New York City. Essential Characteristics of the Airline Industry As the airline industry continues to progress, several essential characteristics have become evident along the way. These characteristics are the following (Bilig & Cook, 2017): The demand for air travel is based on passengers’ wants and needs – Business and leisure travelers choose to fly to get to their destination fast and not enjoy the flight. The air travel demand is closely tied to the general economy, especially for businesses where travel follows the business cycle. 01 Handout 1 *Property of STI  [email protected] Page 2 of 5  TH2105 The domestic coach seat has become a commodity – This happens when travelers perceive seats from different airlines to be equal or the same. Leisure travelers choose among airlines based on the price with low brand loyalty and little product differentiation. Business travelers practice loyalty to the brand they are accustomed to. The critical element in airline success is harmonious labor relations – The industry is strongly united that employee groups can shut down an airline. There can be problems in the operation of the employees who are not satisfied with the airline management. The airline product is fully perishable – Once the airline product is produced, it is also consumed at a certain time. This is different from manufactured products that can be stored until purchased. The operation costs are fixed once the flight schedule is finalized – Regardless of whether the flight is full or not, the operation cost will still be the same. Unsold seats will still render the exact cost to operate a certain flight. Issues in the Airline Industry Major issues among airlines have direct significance to the passengers and the cabin crew members. The following are some of the problems in the airline industry:  Total Operating Cost o Fuel and labor costs affect airfare. 14-16% of an airline’s total operating cost is fuel, and about 40% is labor cost. Some airlines buy contracts with a fuel company to have a fixed expense if ever fuel price increases. Other airlines lay off and/or reduce the pay or benefits of workers to reduce labor costs. o 44% of the total operating cost is left to the airline management. This percentage covers other expenses such as maintenance, technology upgrades, airport fees, taxes, marketing and promotions, and prices to lease or buy physical aircraft.  Airport Capacity – With the demand for air travel set to increase by 50% by 2035, airport capacity is one of the most pressing issues for the industry. Studies show that building infrastructures are not enough to solve airport capacity issues; thus, maximizing new technologies will help resolve it coupled with proper airport management.  Health Safety and Security – Air travel is prone to possible acts of terrorism and a medium to transmit viral diseases such as MERS-Co Virus, Severe Acute Respiratory Syndrome (SARS), Ebola, and flu. In 2020, the COVID-19 pandemic happened and greatly affected the global economy, especially the air transportation industry. It is described as “the worst year in the history of air travel demand.” The international passenger demand has dropped to 75.6 percent, and the domestic passenger demand dropped to 48.8 percent, based on the International Air Transport Association (IATA). 01 Handout 1 *Property of STI  [email protected] Page 3 of 5  TH2105 Figure 1: Global Air Passenger Traffic (revenue passenger kilometers) as Percentage of 2019 Traffic Source: https://www.statista.com/chart/24107/global-air-passenger-traffic/ Figure 1 indicates the possible growth in air passenger traffic according to IATA. It predicts that it may reach a 51.3% passenger demand by 2021 in an optimistic scenario, or it can also be a 38.4% passenger demand if the COVID-19 pandemic continues. These were the issues caused by the COVID-19 pandemic to the airline industry:  The number of passengers rapidly declined at the same time as the closing of borders around the world. People were not allowed to leave and are asked to stay at home as part of the safety protocols, and many feared to travel.  Airline employee counts were reduced due to the decline of travel demand. Most airline employees, if not all, have lost their jobs because of the pandemic. Airline companies considered having fewer operation costs to sustain the business.  Adapting to the new normal has been a challenge for most airlines since protocols continue to change overnight. There have been flights that are lenient with wearing masks once on board, while other flights request passengers to keep their masks on for the whole duration of the flight.  Cargo missions that usually carry medical supplies and vaccines had replaced most passenger flights. This helped airline companies to utilize their idle passenger planes in support of the global pandemic. With these challenges, the air transportation industry faces ongoing efforts in technology, training, and sustainability give hope for a bright future. The industry has now fully embraced the digitization of services and facilities to recover. References Beers, B. (2020, October 7). Which major expenses affect airline companies? Retrieved May 27, 2021, from Investopedia: https://www.investopedia.com/ask/answers/040715/what-are-major-expenses-affect- companies-airline-industry.asp Bilig, B., & Cook, G. (2017). Airline operations and management. Routledge. 01 Handout 1 *Property of STI  [email protected] Page 4 of 5  TH2105 Bonsor, K. (n.d.). How airlines work. Retrieved May 21, 2021, from HowStuffWorks: https://science.howstuffworks.com/transport /flight/modern/airline1.htm Dileep, M. (2019). Tourism, transport, and travel management. Routledge. Kolmar, C. (2021, March 16). 15 Largest airlines in the world. Retrieved June 2, 2021, from Zippia: https://www.zippia.com/advice/largest-airlines/ Mancini, M. (2013). Access: Introduction to travel and tourism (2nd ed.). Cengage Learning. Mazareanu, E. (2021, January 11). Air transportation - statistics & facts. Retrieved May 21, 2021, from statista: https:// www.statista.com/topics/1707/air-transportation/#dossierSummary Page, S. (2016). Transport and tourism: Global perspectives. Pearson. Ritcher, F. (2021, February 5). Pandemic causes historic decline in air passenger traffic. Retrieved May 21, 2021, from statista: https://www.statista.com/chart/24107/global-air-passenger-traffic/ Rodrigue, J. (2020). The geography of transport systems (5th ed.). Routledge. Schreiber, E. (2021, February 9). Aviation industry trends for 2021. Retrieved May 21, 2021, from ARGS: Airline Routes & Ground Services: https://airlinergs.com/aviation-industry-trends-for-2021/ Segan, S. (n.d.). 10 Great small airlines. Retrieved July 19, 2021, from https://www.frommers.com/slideshows/820525-10-great-small-airlines Vault. (n.d.). Airlines. Retrieved June 28, 2021, from https://www.vault.com/industries- professions/industries/airlines 01 Handout 1 *Property of STI  [email protected] Page 5 of 5  TH2105 AIRLINE MANAGEMENT AND OPERATIONS Introduction The term management refers to the people working together to achieve the desired organization's goals and objectives. The functions of management include planning, organizing, staffing, leading or directing, and controlling (Nerkar & Chopde, 2011). Different management styles and management processes have changed over time. Still, the main objective is to lead the employees to attain the goals and uphold the standards and policies of an organization. Both formal and informal approaches in management are being applied due to the dynamic evolvement of the management field. Importance of Management Management plays a vital role in ensuring the success of any business organization. Good management can lead to increased organizational efficiency and effectiveness. The following are what makes management important to every business organization (Juneja, n.d.): It helps in achieving group goals. It utilizes all the physical and human resources productively. It plans to get maximum results through minimum input that leads to reducing costs. It fills up various positions with the right persons, having the right skills, training, and qualifications, establishing a sound organizational structure. It keeps in touch with the changing environment; and It increases the organization's economic production that helps improve the welfare of people. Airline Management Like other businesses, management is also vital in airline operations. According to Chase (2018), commercial airlines serve nearly 1,670 airports and transport close to two (2) billion passengers annually. Airline employees are also estimated to be around 2.1 million. As the number of commercial airlines increases worldwide, there is also an increased pressure on airline management to seek profits, reduce costs, and increase revenues continually. Thus, airline management practices have evolved and contributed to recent advances in computation and communication technologies to efficiently perform in a competitive environment and optimize decision-making processes. The functions or airline management can be identified in the following examples: Airlines need to conduct planning. This is primarily manifested in flight preparations, flight schedules, and the flight reservation process. These tasks must be well-planned to avoid inconvenience and the waste of resources in the future. Organizing is evident in dividing tasks among flight attendants on board, determining how many passengers will be catered to in each flight and how their flight needs will be met. Staffing is necessary for airline operations since the management hires pilots, training captains, cabin crew, cargo operators, and other employees. For instance, airlines need to be particular in selecting, recruiting, and training flight attendants because of the job's complexity. Directing is essential in managing an airline. A senior flight attendant can be seen directing and monitoring new and junior flight attendants to ensure passengers' safety and security onboard. Controlling is manifested in how the management ensures that established plans and objectives are carried out and address uncontrollable circumstances—for instance, addressing canceled and delayed flights caused by various factors like harsh weather conditions. 02 Handout 1 *Property of STI  [email protected] Page 1 of 6  TH2105 Part of the daily plan of airlines, flight attendants, pilots, and aircraft maintenance engineers, is to monitor the weather, check mechanical concerns, deploy, and load "fair" flights to cabin crew members (not to exceed four (4) flights or four (4) legs per day) and to provide memorable flight experience to their passengers. In other words, the nature of employees working for airlines, both serving on the ground and in-flight operations, consists of various airline staff and passenger interactions. Everybody must perform their task to achieve a successful and safe flight. Challenges of Airline Management Impact of Other Players in the Industry Airline management does not work independently of other players in the air transportation industry. Airline management decisions are affected by other entities that it interacts with: the government, airports, customers, alliances, suppliers, unions, and competitors. How these players interact with airline management are detailed as follows (Chase, 2018): First, airline management must comply with the regulations of its home country. It must also consider and abide by the rules of the governments of the countries where the airlines fly to and from and whose airspace they cross. Governments typically watch the competition between airlines and control their strategic decisions, such as merging, acquisition between carriers, market entry or exit, pricing, environmental regulations, security regulations, maintenance, and safety requirements. Second, airline management should carefully consider the terms of their agreements with the different airports they serve. Several factors influence these agreements, including available infrastructure (gates, runways, baggage handling, and so on), anticipated traffic, airport charges and incentives, competition from neighboring airports, available landing slots, congestion, and operational curfews. Third, an airline should consider the needs and preferences of its prospective customers, the travelers. For example, the airline should consider establishing convenient schedules, competitive rates, onboard services, on-time services, and effective customer service. Failure to meet customer needs and preferences can lead to losing them to other competing carriers or other modes of transportation. Fourth, in many cases, an airline is involved in one or more alliances to expand its network coverage or share resources with other airlines. Various forms of partnership reflect the degree of cooperation between the participating airlines. An airline must decide what alliance to participate in and share resources effectively with each alliance member to promote profitability. Typically, the airline has to maintain some operating standards to serve as part of a global alliance. Fifth, suppliers play a crucial role in maintaining the company's operations. Airlines rely on suppliers to provide essential items like aircraft, fuel, spare parts, meals, and employee uniforms. In many cases, airlines contract out specific jobs and services to suppliers, such as aircraft maintenance, aircraft cleaning, ground handling, and sales. Therefore, an airline must maintain healthy relationships with its suppliers to remain successful. Another part of the airline industry that an airline has to deal with are unions. Different groups of workers form associations to obtain greater bargaining power with the airline's management regarding wages, benefits, and work rules. Maintaining good relations with the workforce to ensure the proper functioning of the business is one of the main objectives of airline management. Disputes with trade unions can generally lead to negative actions by trade unions, such as slowdown of work or strikes, which significantly hinder airline operations. Finally, in most markets, competition exists between several airlines. Airlines continuously monitor their competitors' decisions regarding capacity, rate levels, rate restrictions, and departure times. In most 02 Handout 1 *Property of STI  [email protected] Page 2 of 6  TH2105 situations, the findings of the competing airlines lead to a leader-follower pattern, where one airline takes action, and the other competing airlines try to find the best way to respond to this action. Decision Levels of Airline Management (Chase, 2018) Like many other businesses, airline management deals with three (3) levels of interacting decisions. These levels include strategic, planning, and operations decisions. Strategic decisions generally require a long time to be implemented and require a considerable monetary investment. They should also have a significant impact on the company's shape in the long run. Examples of strategic decisions include growth and expansion, fleet sizing (aircraft controls), hub locations, mergers with other airlines, alliance participation, and location of service/maintenance facilities. Planning decisions are made within a few months and can be defined as the process of making effective use of an airline's resources to maximize revenues. The resources available to an airline include the facilities and the personnel that operate the business, including aircraft in different fleets, pilots with other qualifications, flight attendants, maintenance facilities, mechanics, gates, customer service agents, and ramp agents. o Planning decisions include forecasting the demand between every origin-destination (OD), flight schedule development, assignment of flights to the different aircraft fleet (if the airline has more than one fleet type), aircraft routing across the other airports with its maintenance consideration, planning the line of flight for pilots and cabin crew, crew accommodations, flight-gate assignment, and catering. o Other planning decisions include the number of employees needed to operate flights at various airports, including customer service, ramp attendants, and baggage handlers. They also include decisions on rate levels in each OD market, rate restrictions, and control of the inventory of seats for each flight. These planning decisions are very dependent on one another, making the planning process complex. Operations decisions for airlines are those decisions needed to be verified or updated on an hourly or daily basis. They include the responses to unexpected incidents such as adverse weather conditions, flight delays and cancellations, aircraft breakdown, and absence of crew or staff due to illness. Operations decisions also include watching revenues, bookings, and anticipated demand levels in the different markets, matching prices withcompetitors, and managing seat inventory on each flight daily. Strategic decisions are anticipated to impact planning decisions, which affect the operations decisions. In addition, there is a reverse reaction from the operations phase to the planning phase, which may provide feedback to the strategic decisions phase. For example, the observation of a frequent delay of a particular flight waiting for its inbound aircraft might alert schedule planning to change the schedule of this flight to give enough connection time for its inbound aircraft. Also, strong market demand might call for a change in the strategic plan regarding expansion and fleet size increase. Airline Planning and Operations Planning usually starts by identifying the expected airline demand and supply (available resources). This stage involves the following processes: Network Structure. A scheduled airline usually has a predetermined network structure. Selecting a network structure is considered a major strategic decision of the airline. The most common network structures include the hub-and-spoke, point-to-point, and combination of both. These network structures are differentiated as follows: 02 Handout 1 *Property of STI  [email protected] Page 3 of 6  TH2105 o Hub-and-spoke – This network structure is where the airline considers one or more stations in the network to be its hub. The hub station is characterized by having numerous departures and arrivals every day for the airline, while the spoke has only a few departures and arrivals each day. o Point-to-point – This network structure is where airlines operate direct flights between cities, as the name implies. The focus of point-to-point airlines is to serve local traffic between two (2) cities, and less attention is given to the connecting traffic beyond their immediate destinations. These airlines do not depend on any connecting traffic to fill their flights, and they can adjust arrivals and departures at one (1) or more of their stations. Demand Forecasting. Demand forecasting is the process of estimating the expected number of travelers on each flight in the schedule, given the flight schedules of all competitors in the different travel markets. It must predict the number of passengers and the changes in demand due to changes in schedule, pricing, and competition. Current airline resources. These are the available airline resources such as aircraft, pilots, cabin crews, gates, maintenance, and airport operations. After identifying the expected airline demand and supply, then a set of the interrelated planning processes is considered, including schedule planning, time banking, fleet assignment, aircraft routing, crew scheduling, airport facility planning, airport staff scheduling, seat inventory control, and sales and marketing initiatives. These processes are usually completed by a month to a few months before the implementation of the schedule and are repeated regularly. These are further explained as follows: Fleet Assignment. The fleet assignment process is necessary for airlines that have more than one type of aircraft. It is done by assigning the different flights in the schedule to the different fleet types. The process matches the characteristics of the aircraft and the flight to minimize the total cost of the flight to the airline. For example, the aircraft travel range must be consistent with the distance between the flight's origin and destination. Aircraft Routing. It means determining the route for each aircraft. The route of an aircraft consists of a sequence of flights and maintenance activities that extend over a few days (5-7 days). The flights are selected to ensure there is enough time for an aircraft turn or a maintenance activity. An aircraft turn is the time difference between the arrival time of a flight and the departure time of the next flight. It should be long enough for deplaning passengers of the inbound flight, unloading cargo and baggage, cleaning the aircraft, boarding passengers of the outbound flight, loading cargo and baggage, fueling, catering, and exchanging crew. While the maintenance activity is performed either after a few departures, certain flying, or operational hours. Crew Planning. The crew (pilots and flight attendants) must know their traveling schedule ahead of time. The crew's work plan is usually extended over one (1) month. During the month, the crew members will be classified as either line crew or reserve crew. A line crew will be assigned a sequence of predefined trippairs over the month. A trippair represents a sequence of flights (segment), which originates from the crew's home city (domicile) to the last flight, which ends at the domicile. It typically extends over two (2) to seven (7) days, and the layovers will serve as his/her rest day. On the other hand, reserve crew members are not given a line of flight but will serve as a backup in case of system irregularity. The efficiency of crew planning can make considerable savings in airline costs. Airport Facility and Staff Planning. During the planning phase, the scheduler must consider the facilities at the different airports, including gates and baggage-handling facilities. The facilities at the airports should be planned efficiently to accommodate the planned flight schedule with the least cost. The scheduling of airport facilities should take into consideration schedule disruptions that typically result from adverse weather conditions. Airport staff includes customer service agents, gate agents, 02 Handout 1 *Property of STI  [email protected] Page 4 of 6  TH2105 baggage handlers, and ground agents. The staff should be adequate to manage unplanned schedule disruptions at the airport due to weather and other unforeseen factors. Sales and Distribution. Airlines spend significant effort on sales and distribution initiatives to improve their market share and profitability. These initiatives include relations with travel agents, global distribution systems, online ticket distribution channels, travelers' mileage plans, sales agreements with major businesses and promotions, and alliances and code sharing. These initiatives must be proper evaluated to understand their impact on airline profitability. Operations Phase The operations phase concentrates on implementing the planned airline schedule and considering how to recover from unexpected events such as weather conditions, aircraft malfunction, and crew absence. This phase is where decisions are made to recover the airline schedule from flight delays and cancellations, compensate for missing or delayed aircraft and crew, and re-accommodate stranded passengers. It also monitors seat bookings in different markets and updates seat inventory control and pricing decisions. The processes involved in this phase are elaborated as follows: Revenue Management (RM). Airlines apply advanced RM techniques to maximize flight revenue in different markets. RM can be defined as selling the right seat to the right customer at the right price and time. The idea behind RM is to ensure proper allocation of seats to travelers who have different characteristics and primarily have additional requirements for their travel. Business travelers are traveling for work-related trips or business meetings, and they are less sensitive to the ticket price. Leisure travelers travel for recreational purposes or visit family/friends, and they are sensitive to ticket prices. Given that business travelers are more profitable to airlines, the objective of RM is to ensure that enough seats are always available for these travelers, while the remaining seats are for leisure travelers. Irregular Operations Management. Managing irregular operations is done because an airline schedule is rarely implemented as planned. Airline schedules are subject to disruptions due to adverse weather conditions, aircraft breakdowns, crew delays, and security breaches. The airline needs to alleviate the impact of schedule disruption and recover the schedule to return to normal operations. Several objectives are considered by the airline when recovering the schedule. For example, by minimizing flight delays, cancellations, and crew swapping, the airline can reduce the deviation from the planned schedule. Flight Schedule Development and Control The flight schedule is said to be the core product of an airline, designed to meet the traveler's need to travel to a certain destination at a specified time. It lists the destinations or routes operated, the frequency of flight, and the type of aircraft assigned to each flight (Bilig & Cook, 2017). In developing the flight schedule, the planner will attempt to balance four (4) conflicting objectives of flight scheduling, making it a complex task. The following are the conflicting objectives: Revenue – The flight schedule must match flights and capacity with passenger demand to maximize the network revenues. For example, airlines will have to schedule frequent morning and evening flights as needed by the business markets, but they will still have to include off-peak flights to accommodate other passengers. Unit Cost and Utilization – The schedule planner will lower the unit cost by ensuring high utilization of aircraft, crew, and other assets (e.g., gates and ground support equipment), which will also increase revenue. For example, planners will have to schedule an aircraft to have as many flights as possible to maximize its utilization lowering unit costs and increases revenue potential as revenue is only generated when an aircraft is flying. 02 Handout 1 *Property of STI  [email protected] Page 5 of 6  TH2105 Reliability – Airlines must have backup resources in the event of disruptions, such as weather and aircraft mechanical problems, that may cause delays in the flight schedule. Aircraft substitutions and crew reserves will ensure that the airline will be able to provide on-time service. For example, the airline may pull out a reserve crew if one crew member becomes ill before the following flight schedule. Constraints – Planners must consider the limitations, such as airport capacity and crew members' regulations, to have a feasible flight schedule. For example, some airports have takeoff weight restrictions that airlines must consider in planning flight schedules for their aircraft. There are some cases where airlines will need to add a second fleet type to operate a certain flight that has range limits in terms of the altitude and temperature during aircraft takeoff. Crew members are also subject to maximum flight time and rest requirements arising from regulation and contractual provisions. Optimization The schedule draft will be circulated to the operating departments to gather suggestions and approval. Other departments may point out limitations that were not considered during the drafting of the schedule. An iterative process is done to develop the schedule. The inputs from other operating departments will be included in the revisions before the schedule is inputted into the passenger service system. The Passenger Service System (PSS) The PSS is a central information technology containing flight schedules, passenger reservations, frequent flier awards, flight information system, and check-in system customized for each airline. Airline management uses the PSS to generate data needed to check each takeoff's aircraft weight and balance. The PSS also contains interfaces between the PSS and other internal IT systems for daily airline management. For example, the airline's revenue management system allocates the seat inventory to price classes. Airlines extract data from check-in or departure control systems to compute each takeoff's aircraft weight and balance. References: Bilig, B., & Cook, G. (2017). Airline operations and management. Routledge. Chase, S. (2018, June 26). Introduction to airline management. Retrieved June 1, 2021, from https://silo.tips/download/introduction-to-airline-management Juneja, P. (n.d.). Importance of management. Management Study Guide. Retrieved May 31, 2021, from https://www.managementstudyguide.com/management_importance.htm Nerkar, K., & Chopde, V. (2011). Principles and practices of management. Wiley India Pvt. Shaw, S. (2012). Airline marketing and management (7th ed.). Ashgate Publishing. 02 Handout 1 *Property of STI  [email protected] Page 6 of 6