Air Transportation

522 AIR TRANSPOR T A TION



airport distance. It is calculated by dividing the Aircra grounding a voluntary determination
airport-to-airport distance, in statute miles, by the by a carrier or an order from the Federal Aviation
number of actual airborne hours. O en called wheels- Administration to refrain from flying a particular
off, wheels-on speed. type of aircra , as a result of suspected or actual
malfunction of such aircra , until the cause can be
Air cargo the total volume of freight, mail, and determined and appropriate corrective action taken.
express traffic transported by air. It includes freight The term is also used to refer to occasional inability
commodities of all kinds, including small-package of an individual aircra to operate due to weather
counter services, express and priority reserved conditions or minor mechanical malfunction, or to a
freight and express services, and all classes of mail voluntary decision by a carrier to refrain from flying
transported for the U.S. Postal Service. certain aircra for reasons other than mechanical
malfunctions.
Air Cargo, Inc. a service organization owned by
the scheduled U.S. airlines to provide local air freight Aircra hour, airborne the airborne hours of an
pickup and delivery, air/truck and container pick-up aircra , computed from the moment it leaves the
and delivery, and loading and unloading. ground until it touches the ground at the next point
of landing. O en referred to as wheels-off, wheels-on
Air carriers the commercial system of air time.
transportation, consisting of domestic and
international certificated and charter carriers. Aircra hour, block-to-block the time elapsed
from the moment an aircra first moves under its
Air commerce the carriage by aircra of persons own power for purposes of flight until it comes to
or property for compensation or hire, the carriage rest at the next point of landing. Block time includes
of mail by aircra , or the operation or navigation of taxi time before takeoff and a er landing, takeoff and
aircra in the conduct or furtherance of a business landing time, and airborne time. Also referred to as
or vocation. ramp-to-ramp hours.

Aircra all airborne vehicles supported either by Aircra hour, revenue an aircra ’s airborne hours
buoyancy or by dynamic action. Used in this text in in revenue service, computed from the moment it
a restricted sense to mean an airplane—any winged leaves the ground until it touches the ground at the
aircra , including helicopters but excluding gliders next point of landing.
and guided missiles.
Aircra hour, revenue per aircra per day (carrier’s
Aircra and traffic servicing equipment) the average number of hours of
expenses compensation of ground personnel for productive use per day in revenue service of a reporting
their expenses incurred on the ground to protect carrier’s equipment. Determined by dividing aircra
and control the in-flight movement of aircra , to days assigned to the carrier’s equipment into revenue
schedule and prepare aircra operational crews aircra hours minus revenue hours on other carriers’
for flight assignment, to handle and service aircra interchange equipment plus total hours by other
while in line operation, and to service and handle carriers on the carrier’s interchange equipment. (See
traffic on the ground a er issuance of documents Utilization.)
establishing the air carrier’s responsibility to provide
air transportation, and for their in-flight expenses Aircra hour, revenue per aircra per day (carrier’s
of handling and protecting all nonpassenger traffic, routes) the average number of hours of productive
including passenger baggage. use per day in revenue service on a reporting
carrier’s routes. Determined by dividing aircra days
Aircra departure, scheduled a takeoff scheduled assigned to service the carrier’s routes into revenue
at an airport, as set forth in published schedules. aircra hours.
Aircra engine, turbine an engine incorporating Aircra industry the industry primarily engaged
as its chief element a turbine rotated by expanded in the manufacture of aircra , aircra engines and
gases. It consists essentially, in its most usual form, parts, aircra propellers and parts, and auxiliary
of a rotary air compressor with an air intake, one aircra parts and equipment. A sector of the
or more combustion chambers, a turbine, and an aerospace industry.
exhaust outlet. Aircra engines of this type have their
power applied mainly either as jet thrust (turbojet Aircra , large an aircra having a maximum
or turbofan) or as sha power to rotate a propeller passenger capacity of more than 66 seats or a
(turboprop). maximum payload capacity of more than 18,000

GL OSSAR Y 523



pounds. aircra . The turbofan engine has either an oversized
low-pressure compressor at the front with part of the
Aircra , leased (rental) aircra obtained from flow bypassing the rest of the engine (front fan) or a
(or furnished to) others under lease or rental separate fan driven by a turbine stage (a fan).
arrangements.
Aircra , turbojet an aircra powered by a gas
Aircra miles (plane miles) the miles computed turbine engine incorporating a turbine-driven
in airport-to-airport distances for each interairport compressor to take in and compress the air for the
hop actually completed, whether or not performed in combination of fuel, with the gases of combustion
accordance with the scheduled pa ern. (or heated air) used both to rotate the turbine and to
create a thrust-producing jet.
Aircra operation an aircra arrival at or departure
from an airport with FAA air traffic control service. Aircra , turbo-propeller (turboprop, prop jet) an
There are two types of operations—local and aircra powered by a gas turbine engine in which
itinerant. Local operations are performed by aircra output is taken as sha power to drive a propeller
that (1) operate in the local traffic pa ern or within via a reduction gear; it also has a small residual jet
sight of the tower, (2) are known to be departing for, thrust.
or arriving from, a location within a 20-mile radius of
the control tower, or (3) execute simulated instrument Aircra type a distinctive model, as designated by
approaches or low passes at the airport. Itinerant the manufacturer.
operations are all aircra arrivals and departures
other than local operations. Aircra , vertical/short takeoff and landing see V/
STOL.
Aircra Owners and Pilots Association (AOPA) the
principal representative of individual aircra owners Aircra , vertical takeoff and landing see VTOL.
and operators before Congress, the administration,
and its regulatory agencies, such as the Federal Aircra , wide-body a generic and commonly used
Aviation Administration; has over 200,000 members. term applied to jet aircra (turbofans) with a fuselage
diameter exceeding 200 inches whose per-engine
Aircra , passenger/cargo an aircra configured to thrust is greater than 30,000 pounds (for example,
accommodate passengers and cargo in the above- Boeing 747, McDonnell-Douglas DC-10, Lockheed
deck cabin. L-1011).
Aircra , regular body a generic and commonly Air express small packages that usually have a
used term applied to jet aircra , especially a turbofan higher priority of carriage than air freight.
with a fuselage diameter of less than 200 inches whose
propulsive power is supplied by turbine engines with Airframe the structural components of an airplane,
a per-engine thrust of less than 30,000 pounds (for including the fuselage, empennage, wings, landing
example, Boeing 707 and 727, McDonnell-Douglas gear, and engine mounts, and excluding such items
DC-8 and DC-9). as engines, accessories, electronics, and other parts
that may be replaced from time to time.
Aircra revenue hours see Aircra hour, revenue.
Air freight large packages and cargo that do not
Aircra , small an aircra having a maximum have as high a priority as air express.
passenger capacity of 66 seats or less or a maximum
payload capacity of 18,000 pounds. Air freight forwarder any indirect air carrier
that assembles and consolidates or provides for
Aircra , short takeoff and landing see STOL. assembling and consolidating property for shipment
by air. They are also responsible for the transportation
Aircra , supersonic transport (SST) a transport of property from the point of receipt to the point
aircra capable of a normal cruising speed greater of destination and utilize for the whole or any part
than the speed of sound (741 mph at sea level). of such transportation the services of a direct air
carrier.
Aircra , turbine an aircra with either turbojet,
turbofan, turboprop, or turbosha engines. Airline Clearing House a corporation, wholly
owned by the larger certificated airlines, through
Aircra , turbofan (fan jet) an aircra powered which the interline accounts of certificated and
by a turbojet engine whose thrust is that of a fan-jet commuter airlines are se led on a net basis each

524 AIR TRANSPOR T A TION



month. the United States or the District of Columbia and a
place in any other state of the United States or the
Airlines see Air carriers. District of Columbia, or between places in the same
state of the United States through the airspace over
Airline Tariff Publishing Company (ATPCO) an any place outside thereof, or between places in the
electronic clearinghouse for fare information and same territory or possession of the United States or
changes; jointly owned and funded by 30 U.S. and the District of Columbia, whether such commerce
foreign carriers. moves wholly by aircra or partly by aircra and
partly by other forms of transportation.
Air mail the first of the air cargo services, and an
important factor in the formation of air transportation Air transportation, intrastate the carriage by
in the United States. aircra of persons or property as a common carrier
for compensation or hire wholly within the same
Air movement airport-to-airport movement. state of the United States.
Airport an area of land or water that is used or Air transportation, overseas the carriage by
intended to be used for the landing and takeoff of aircra of persons or property as a common carrier
aircra , including its buildings and facilities, if any. for compensation or hire or the carriage of mail by
aircra in commerce between a place in any state
Air shu le see Shu le service. of the United States or the District of Columbia and
any place in a territory or possession of the United
Air taxi any common carrier for hire that holds an States, or between a place in a territory or possession
air taxi operating certificate and primarily operates of the United States and a place in any other territory
small aircra without fixed routes. or possession of the United States, whether such
commerce moves wholly by aircra or partly by
Air Traffic Conference (ATC) a part of the Air aircra and partly by other forms of transportation.
Transport Association, which represents the U.S.
scheduled airline industry. The ATC is made up of Airworthiness certificate a certificate a esting
a number of commi ees and subcommi ees whose to the fact that each airplane conforms to the type
members are representatives from the member certificate and is safe to fly; the ability of an aircra to
carriers. Improved service, streamlined procedures, fly safely through a range of operations is determined
and reduced costs are all goals sought by the members by the Federal Aviation Administration.
of the ATC. One of the major functions performed by
the conference is the approval of travel agents who All-cargo airline a carrier that operates a variety of
do business with the airlines. cargo services.
Air traffic control a service operated by the American Society of Travel Agents see ASTA.
appropriate authority to promote the safe, orderly,
and expeditious flow of air traffic. AOPA see Aircra Owners and Pilots
Association.
Air Transport Association of America see ATA.
Appropriation (federal budget) an act of Congress
Air transportation, foreign the carriage by aircra authorizing an agency to incur obligations and make
of persons or property as a common carrier for payments out of funds held by the Department of the
compensation or hire or the carriage of mail by aircra Treasury.
in commerce between a place in the United States and
any place outside thereof, whether such commerce Arbitration the se lement of disputed questions,
moves wholly by aircra or partly by aircra and whether of law or fact, by one or more arbitrators by
partly by other forms of transportation. whose decision the parties agree to be bound.

Air transportation industry all civil flying ARINC (Aeronautical Radio, Inc.) organization
performed by the certificated air carriers and general that provides communications needs of all aircra
aviation. operators within the United States. Included in
ARINC services are weather wire service and air/
Air transportation, interstate the carriage by ground radio communications.
aircra of persons or property as a common carrier
for compensation or hire or the carriage of mail by ASMs see Available seat-miles.
aircra in commerce between a place in any state of

GL OSSAR Y 525



Asset property or property rights owned by a Available seats per aircra the average number
business that is valuable, either because it will be of seats available for sale to passengers, derived by
converted into cash or because it is expected to dividing the total available seat-miles by the total
benefit future operations, and that was acquired at aircra revenue miles in passenger service.
a measurable cost. A current asset is an asset that is
either currently in the form of cash or is expected to be Available ton-miles the aggregate of the products
converted into cash within a short period, usually one of the aircra miles flown on each flight stage
year. A fixed asset is a tangible property of relatively multiplied by the available aircra capacity tons for
long life that generally is used in the production of that flight stage, representing the traffic-carrying
goods and services. capacity offered.
Assets the items on the balance sheet of a business Aviation Distributors and Manufacturers
showing the book value of its resources. Association see ADMA.

ASTA (American Society of Travel Agents) a trade Aviation gasoline a high-grade (high-octane)
association of the travel agency industry. gasoline used as a fuel by all piston-engine aircra ,
in contrast to the jet fuel (generally kerosene) used
Astronautics the art and science of designing, in turbine-powered aircra . This piston-engine fuel is
building, and operating manned or unmanned space also referred to as avgas. (See also jet fuel.)
objects.
Backlog the sales value of orders accepted
ATA (Air Transport Association of America) a (supported by legal documents) that have not yet
trade association of the U.S. certificated-route air passed through the sales account.
carriers.
Balance sheet a statement of assets, liabilities,
ATC air traffic control. See also Air Traffic and stockholder equity (or equivalent interest of
Conference. individual proprietors or partners) as of a particular
date.
ATPCO see Airline Tariff Publishing Company.
Bankruptcy a procedure by which a company
Authority the power to make decisions, command, unable to pay debts may be declared bankrupt, a er
and delegate responsibility to others. which all assets in excess of the exemption claims
are surrendered to the court for administration and
Automatic market entry under the Airline distribution to creditors and the debtor is given a
Deregulation Act of 1978, the right of an air carrier to discharge that releases it from the unpaid balance on
apply to the CAB for permission to engage in nonstop most debts.
service between any one pair of points in interstate
or overseas air transportation a er the first business Barnstormers pilots who toured the country a er
day of each of the calendar years 1979, 1980, and World War I pu ing on air shows and giving rides
1981. However, no air carrier could apply if any other to local people.
air carrier had filed wri en notice to the board to
preclude any other carrier from obtaining that same Barriers to entry term used in reference to
authority. An air carrier could protect only one pair of oligopolistic industries to denote the difficulty
points by precluding all other carriers from obtaining firms have in entering the industry. The barriers can
authority between them. be in the form of capital requirements, regulatory
requirements, technical personnel required, and so
Available seat-miles (ASMs) the total of the forth.
products of aircra miles and number of available
seats on each flight stage, representing the total Big Four the four largest major carriers (American,
passenger-carrying capacity offered. See also Seat Eastern, TWA, and United). These carriers were first
miles, available. officially termed the Big Four in the 1949 Annual
Report of the Civil Aeronautics Board.
Available seats the number of seats installed in an
aircra (including seats in lounges), exclusive of any Bilateral agreement an agreement or treaty between
seats not offered for sale to the public by the carrier, two nations contracting for reciprocal international
and inclusive of any seat sold. air service, such service to be operated by designated
carriers of each nation. The agreement may include
provisions for the type of aircra used, intermediate

526 AIR TRANSPOR T A TION



stops en route, aircra airworthiness, taxation- Cabotage a foreign operator carrying passengers
free fuel, and arbitration procedures. It is usually a between two domestic points of another country.
standardized agreement used in negotiations for air
transport between one nation and many others and CAM routes contract air mail routes. Early air mail
allowing for the inclusion of different points and routes were designated by the Post Office Department
routes. as CAM routes.
Blockspeed range diagram a diagram that shows Capital money, goods, land, or equipment used
the relationship of the average speed in statute miles to produce other goods or services. Capital goods
per hour of an aircra , between the time the aircra are the tools or other productive agents by which
first moves under its own power for purposes of flight resources are transformed into usable products.
until it comes to rest at the next point of landing, and
the distance the aircra can fly. Capital budgeting long-term planning for
proposed capital outlays and their financing.
Boarding pass a document issued to a customer
that contains his or her flight number, date, class Capital gains or losses (operating property) gains
of service, seat number, and special-services or losses on retirements of operating property and
information. It is sometimes issued in exchange for equipment, flight equipment expendable parts, or
a li ed flight coupon and used as the passenger’s miscellaneous materials and supplies when sold
actual authority to board a flight. or otherwise retired in connection with a general
retirement program and not as incidental sales
Board of directors a group elected by stockholders performed as a service to others.
to provide general guidance for a corporation.
Capital lease see Financial (capital) lease.
Bond a promissory note under seal. In common
use, a long-term debt obligation, particularly one Capital stock the declared money value of the
issued to the general public. outstanding stock of a corporation.
Book value the dollar value of a company’s assets Capital, total owners’ equities plus creditors’
minus its liabilities. Book value per share is the equities.
company’s book value divided by the number of its
common stock shares outstanding. Cargo aircra an aircra expressly designed or
converted to carry freight, express, and so forth,
Break-even point that level of operations at which rather than passengers.
total expenses equal total revenue.
Cargo revenue ton-miles all traffic, other than
Budget a plan of action expressed in figures. A passengers, times the miles transported in revenue
financial plan indicating expected revenues and service. Includes freight, express, mail, and excess
anticipated expenses for a specified period, such baggage.
as a year, that can be used as a means of exercising
financial control. Cash general and working funds available on
demand that are not formally restricted or earmarked
Business aircra use in reference to general for specific objectives.
aviation aircra , any use of an aircra not for
compensation or hire by an individual for the purpose Cash budget a schedule of expected cash receipts
of transportation required by a business in which the and disbursements.
individual is engaged (personally flown).
Cash flow the amount of cash flowing in and out of
Business-class service transport service aimed a business in a given period.
primarily at the international business traveler, to
overcome the regulatory restraints on increasing CATO (combined airline ticket office) a ticket
normal economy (coach) fares on long-haul office staffed by the personnel from two or more air
international markets; provides fewer amenities carriers.
than first-class service but more than economy;
also provides more comfortable and less congested Causal (model) forecasts the most sophisticated
seating than economy class. of the forecasting methods; these forecasts express
the relevant causal relationships between variables
CAB Civil Aeronautics Board. mathematically. Examples include regression analysis,
econometric models, and computer models.

GL OSSAR Y 527



Certificated air carrier one of a class of air carriers City-pair the origin and destination cities of an air
holding certificates of public convenience and trip.
necessity issued by the former CAB or the DOT
authorizing the performance of scheduled air City ticket office see CTO.
transportation over specified routes and a limited
amount of nonscheduled operations. This general Classes of stations a term used in reference to the
carrier grouping includes the all-purpose carriers level of maintenance service provided at various
(the so-called passenger/cargo carriers) and the all- stations throughout a carrier’s route system. In
cargo carriers and comprises all of the certificated descending order of capability, they include the
airlines. Certificated air carriers are o en referred carrier’s maintenance base, major stations, service
to as scheduled airlines, although they also perform stations, and other stations.
nonscheduled service.
Class of service the type of accommodations or
Certificate of public convenience and necessity a fares offered on an airplane. Referred to as reservation
certificate issued to an air carrier under Section 401 booking codes.
of the Federal Aviation Act of 1958 by the former
CAB or the DOT authorizing the carrier to engage Coach passenger revenue revenue from the air
in air transportation. The certificate may specify transportation of passengers at fares and quality of
certain designated routes and certain designated service below first-class service.
points or geographic areas to be served and any
limitations and restrictions imposed on such Coach service transport service established for the
service. carriage of passengers at fares and quality of service
below that of first-class service.
Chain of command a hierarchy of managers and
subordinates. Code sharing marketing partnerships between
regional carriers and major carriers that create an
Chain reaction effect the interrelationship among integrated service linking small communities and
gate congestion, maintenance routing, and other the national air transportation system. Both carriers
factors that are affected by a single schedule change. in such a partnership share the same identification
In other words, one schedule change causes a chain codes on airline schedules.
reaction requiring many other schedule changes.
Collision avoidance systems electronic devices that
Charter (inclusive tour) the charter of the entire warn pilots directly of potential conflicts with other
capacity of an aircra or at least 40 seats (providing aircra and show them how to avoid them. One system
the remain-ing capacity of the aircra is chartered by presently being developed by the FAA is the discrete
a person or persons authorized to charter aircra ) by address beacon system (DABS), which is an improved
a tour operator. The inclusive-tour charter is required transponder and which will provide a data link for use
to be a round trip with a minimum of three stops with a ground-based anticollision system.
other than the point of origin and to be a minimum of
seven days in duration, and its cost must include all Columbia route the first major transcontinental
accommodations and surface transportation. air mail route between San Francisco and New York.
Boeing Air Transport, the successful bidder on the
Charter air carrier an air carrier holding a certificate western portion of the Columbia route, began service
of public convenience and necessity authorizing it to on July 1, 1927, between San Francisco and Chicago.
engage in charter air transportation. National Air Transport, the successful bidder on the
eastern portion, commenced operation on September 1,
Charter revenues revenues from nonscheduled air 1927.
transport services in which the party receiving the
transportation obtains exclusive use of an aircra and Combination carrier an air carrier that provides
the remuneration paid by such party accrues directly passenger and cargo services.
to, and the responsibility for providing transportation
is that of, the accounting air carrier. Passenger charter Combined airline ticket office see CATO.
revenues are those from charter flights carrying
only passengers and their personal baggage. Freight Commercial aviation in reference to general
charter revenues are those from charter flights aviation flying, commercial use includes air taxi/
carrying either freight only or passengers and freight commuter use, rental use, aerial application, aerial
simultaneously. observation, and other work.

528 AIR TRANSPOR T A TION



Commission the payment by airlines to a travel Controlling the evaluation of performance and, if
agent of specified amounts of money in return for the necessary, correction of what is being done to ensure
agent’s sales of air transportation. It is expressed and a ainment of results according to plan.
paid by each carrier as a percentage of the value of
the air transportation sold on that air carrier. Corporate aircra use any use of an aircra by a
corporation, company, or other organization for the
Commi ee system a group of individuals purpose of transporting its employers or property not
representing various administrations, departments, for compensation or hire and employing professional
or regions who are officially delegated to perform pilots for the operation of the aircra .
a function, such as investigating, considering,
reporting, or acting on a ma er. Corporate objectives major objectives established by
the board of directors and senior management. Such
Common air carrier an air transportation firm that objectives might include expected return on investment
holds out its services for public hire. (ROI), profits a er taxes, stockholder dividends, or
targeted market share on a major route segment.
Common fares an unusual application of normal
fares: a specific fare applied to points other than Correlation a statistical total that measures the
those between which the fare is determined. For degree of dependency between two or more variables
example, a passenger flying between Sea le and and the average amount of change in one variable
Milwaukee might pay the same fare as a passenger associated with a unit increase in another. In simple
flying between Sea le and Chicago. correlation, the dependent variable is related to only
one independent variable. In multiple correlation,
Common stock the ownership of the corporation the dependent variable is related to two or more
divided into a specified number of shares, each independent variables.
representing equal participation in the affairs of the
company. Cra union a labor union composed of workers
in a particular trade, such as pilots, mechanics,
Commuter air carrier a class of noncertificated air flight a endants, or dispatchers. An “exclusively”
carriers (air taxi operators) that operate small aircra organized union.
(fewer than 66 seats) and perform at least five round
trips per week between two or more points; publish Cross-utilization the use of personnel in work
flight schedules specifying times, days of the week, outside of their normal job description—for example,
and places between which such flights are performed; mechanics used to sort baggage or flight a endants
or transport mail by air pursuant to a current contract serving as reservation or ticket agents.
with the U.S. Postal Service.
CRS see Computerized reservation system.
Competitive market any city-pair or pair of
geographic areas served by more than one air CTO (city ticket office) an airline ticket office
carrier. generally located in the major business district of a
large city.
Computerized reservation system (CRS) a system
that displays airline schedules and prices for use by Current assets cash and other resources expected to
agents in making reservations. be realized in cash, sold, or consumed within one year.
Includes cash, marketable securities, receivables, and
Constrained operating plan the system constraints inventories.
(runway length and capacity, gate capacity, ground
access, and so forth) that are placed on the carrier in Current liabilities obligations the liquidation of
the fleet-planning process. which is expected to require the use, within one
year, of current assets in the creation of other current
Consumer-oriented period the airline marketing liabilities. Includes accounts payable, unpaid taxes,
period starting in the early 1970s in which the carriers and other debts within one year.
a empted to determine through marketing research
techniques exactly what air travelers really wanted Current notes payable the face value of notes,
and then designed products and services to meet dra s, acceptances, or other similar evidences of
those wants. indebtedness payable on demand or within one year
to other than associated companies, including the
Container rates special cargo rates for shippers portion of long-term debt due within one year of the
using containers. balance sheet date.

GL OSSAR Y 529



Current ratio a measure of liquidity obtained by Delay a lack of timely movement that results in
dividing current assets by current liabilities. The monetary loss to the shipper. It includes, but is not
higher the number, the more cash is on hand for limited to, consequential or special damages and
short-term needs. physical deterioration or damage to the goods that
results from delay.
Current resources the quantity and quality of
human and capital resources available, including Delegation of authority the assignment of authority
present fleet, maintenance facilities, flight crews, and duties to others at a lower organizational level.
mechanics, and so forth.
Demand a schedule that shows the various amounts
Customer any person to whom air transportation of a product or service that consumers are willing and
and related services are to be provided. Technically, able to purchase at various prices over a particular
a customer becomes a passenger only when he or she time period.
boards an airplane for a flight.
Denied-boarding compensation compensation
Debenture a type of bond that is generally not paid to a passenger holding confirmed reserved space
secured by any specific pledge of property as who arrives for carriage at the appropriate time and
collateral. Convertible debentures give the holder place but is denied seating. The passenger must have
the privilege of exchanging the holdings for securities complied fully with the carrier’s requirements as to
of a different type, usually common stock. ticketing, check-in, and reconfirmation procedures
and be acceptable for transportation under the
Debt current and noncurrent liabilities; equities of carrier’s tariff.
creditors.
Department a grouping of activities. Departments
Debt financing current and noncurrent liabilities generally fall under administrations (for example, the
(equities of creditors) incurred from borrowing funds advertising department falls under the marketing ad-
from commercial banks, insurance companies, and ministration).
other sources.
Departmentalization the practice of subdividing both
Decentralization an extension of delegation people and functions into groups within an organization
generally from the home office to branch offices; the in order to gain the advantages of specialization.
delegation of responsibility and authority away from
a centralized unit. Department of Transportation (DOT) an executive
department of the U.S. government established by
Decision making the process of choosing between the Department of Transportation Act of 1966 for
alternative courses of action. the purpose of developing national transportation
policies and programs conducive to the provision
Deferred charge debit balances in general clearing of fast, safe, efficient, and convenient transportation
accounts, including prepayments chargeable against at the lowest possible cost. The department consists
operations over a period of years, capitalized of the secretary, the undersecretary, and the heads
expenditures of an organizational or developmental of the operating agencies, which include the Coast
character, and property acquisition adjustments. Guard, the Federal Aviation Administration, the
Federal Railroad Administration, and several other
Deferred credits credit balances in general clearing administrative units.
accounts, including premiums on long-term debt
securities. Departure an aircra takeoff from an airport.

Deferred taxes certain taxes that companies are Depreciation the general conversion of the
required to collect for various taxing authorities depreciable cost of a fixed asset into an expense,
including federal excise and state sales taxes and spread over its remaining life. There are a number
payroll withholding of employee income taxes. of methods of depreciation, all based on a periodic
charge to an expense account and a corresponding
Deflators (constant dollars) multipliers used to credit to a reserve account.
reduce a price level to that comparable with the price
level at a given time, offse ing the effect of inflation. Depreciation of flight equipment charges to
The gross national product, in constant dollars, is expense for depreciation of airframes, aircra
arrived at by dividing components of the current engines, airframe and engine parts, and other flight
dollar figures by appropriate price deflators. equipment.

530 AIR TRANSPOR T A TION



Design characteristics an aircra ’s dimensions; Domestic operation in general, operations within
weight profile, including such items as maximum or between the 50 states of the United States and the
zero-fuel weight and operator’s empty weight; fuel District of Columbia.
capacity; type of power plants; systems (electrical,
hydraulic, and environmental); seating configuration; DOT see Department of Transportation.
containers and pallets; bulk volume; and total
volume. Earnings per share net earnings divided by the
number of shares outstanding.
Determinants of demand those factors that affect
demand. Price is generally considered the most Earnings, retained the cumulative increase
important determinant of demand; however, other in stockholders’ equity as a result of company
nonprice determinants include (1) the preferences operations.
of passengers, (2) the number of passengers in
a particular market, (3) the financial status and Economies (diseconomies) of scale the
income levels of the passengers, (4) the prices decreases (increases) in a firm’s long-run average
of competitors and related travel expenses, and costs as the size of its operations increases.
(5) passenger expectations with respect to future The factors that give rise to economies of scale
prices. are (1) greater specialization of resources,
(2) more efficient utilization of equipment, (3)
Determinants of elasticity those factors that reduced unit costs of inputs, (4) opportunities for
change a consumer’s responsiveness to price changes, economic utilization of by-products, and (5) growth
including competition, distance flown, business of auxiliary facilities. Diseconomies of scale may
versus pleasure travel, and time involved. eventually set in, however, due to (1) limitations
of (or “diminishing returns” to) management in its
Developmental and preoperating cost costs decision-making function and (2) competition among
accumulated and deferred in connection with firms in bidding up costs of limited inputs.
alterations in operational characteristics, such as the
development and preparation for operation of new Economies of scope economies related to the
routes and the integration of new types of aircra or number of points served by a carrier, as distinguished
services. from economies of scale, which are achieved as a
function of size.
Directing the process of assigning tasks and
ordering, telling, and instructing subordinates what Economy service in domestic operations, transport
to do and perhaps how to do it. service established for the carriage of passengers at
fares and quality of service below coach service.
Directionality the preponderance of air cargo
traffic flowing between city-pairs. Efficient use of capital the utilization of the latest
technology available, which brings about economies
Direct operating cost all expenses that are of scale.
associated with and dependent on the type of aircra
being operated, including all flying expenses (such Elastic demand the demand if a given percentage
as flight crew salaries, fuel and oil, all maintenance change in price results in a larger percentage change
and overhaul costs, and all aircra depreciation in passengers carried (consumers are responsive).
expenses). The coefficient of elasticity of demand is greater
than 1. When demand is elastic, a price increase will
Diseconomies of scale see Economies of scale. reduce total revenue and a price decrease will raise
total revenue.
Dividends dividends payable, in cash or in stock,
to preferred and common stockholders declared but Elasticity of demand the percentage change in
not necessarily paid during the accounting period. quantity demanded resulting from a 1 percent
The current liability is created by the declaration, the change in price. Mathematically, the ratio of the
amount ordinarily being charged to retained earnings. percentage change in quantity demanded to the
percentage change in price. In general, elasticity
Division a specialized unit or grouping of activities may be thought of as the responsiveness of changes
within a department (for example, cost accounting in one variable to changes in another, where
might be a division of the general accounting responsiveness is measured in terms of percentage
department, which falls under the finance and changes.
property administration).

GL OSSAR Y 531



Emergency board a special commi ee set up by Extra section an additional passenger-carrying
the president upon recommendation of the National flight, usually set up for one day only, to accommodate
Mediation Board when in their opinion a strike by heavy customer demand.
employees of one or more carriers might lead to a
national emergency. The emergency board has 30 FAA see Federal Aviation Administration.
days to investigate the dispute and report its findings
to the president. Facility constraints operating limitations caused
by inadequate runway length, gate positions, ticket
Employee productivity output (in terms of some counter space, and so forth.
volume, such as flying hours or departures) versus
input (number of employees). Generally, the average Fare the amount per passenger or group of persons
total number of employees divided into the indicated stated in the applicable tariff for the transportation
traffic and/or financial measures for the year. thereof, including baggage unless the context
otherwise requires.
Enplanements, passenger see Passenger enplane-
ments. Fare, coach (tourist) the tariff applicable to the
transportation of a passenger or passengers at a
Equipment trust financing a loan by a bank or quality of service below that of first-class service but
group of banks to an air carrier for the purchase of higher than or superior to that of economy service.
equipment in which title remains with the banks,
which are trustees of a series of certificates issued with Fare, discount a reduced fare designed to stimulate
the equipment as security. A number of certificates traffic volume. Discount fares are subject to one or
are paid off annually by the carrier. more travel restrictions, such as minimum length of
stay or applicability only on certain days of the week
Equipment turnaround time the length of or only during a particular season, and are typically
time between an aircra ’s arrival and departure. calculated as a percentage reduction from the normal
Generally, the time needed to prepare an aircra for full fare.
departure, including aircra cleaning, fueling, en
route maintenance check, baggage loading, and food Fare, economy a charge for domestic air
service. transportation at a level of service below that of coach
service. The significant difference between coach and
Equity financing the sale of stocks and bonds in the economy service is that the coach passenger receives
capital market to the public. a complimentary meal while the economy passenger
has an option of purchasing a meal. Seating density
Essential air service the threshold number of in the economy area may be higher than in the coach
departures linking a community to the nationwide air area. In international air transportation, economy fare
transport network. Two round trips per day, five days applies to second-class service or service just below
a week, or the level of service provided on the basis of that of first-class. It is synonymous with the term
calendar year 1977 air carrier schedule, whichever is coach fare within the United States.
less, is the statutory minimum service.
Fare, excursion a type of discount fare.
Exception rate a rate higher than the usual air
freight rate that applies to certain types of shipments Fare, first-class the fare applicable to the
that require special handling (animals, for example). transportation of a passenger or passengers for whom
premium-quality services are provided.
Excess baggage passenger baggage in excess of free
allowance. This excess is subject to a charge, which is FBO see Fixed-base operator.
called excess baggage revenue.
Federal Aviation Administration (FAA) an
Express property transported by air under independent agency of the U.S. government charged
published air express tariffs filed with the Civil with controlling the use of U.S. airspace (by civil and
Aeronautics Board. Originally, express referred to the military operators) to obtain the maximum efficiency
priority movement of parcel shipments moving on and safety. Formerly the Federal Aviation Agency, it
aircra in conjunction with an agreement between became part of the Department of Transportation in
the various air carriers and REA Express, Inc. Since 1967 as a result of the Department of Transportation
the cessation of operations by REA Express in 1976, Act. The FAA is charged with regulating air commerce
this term refers to the replacement services offered by to promote its safety and development; achieving the
the various air carriers. efficient use of the navigable airspace of the United

532 AIR TRANSPOR T A TION



States; promoting, encouraging, and developing Fixed-base operator (FBO) a free-enterprise
civil aviation; developing and operating a common business that carries on general aviation sales,
system of air traffic control and air navigation for service, and support operations.
both civilian and military aircra ; and promoting the
development of a national system of airports. Fixed costs those direct operating costs that in total
do not vary with changes in available seat-miles
Feeder routes routes designed to “feed” traffic into (ASMs) that an airline produces.
the major trunk routes. A er World War II, a number
of smaller air carriers were established that became Fixed-wing aircra an aircra whose wings are
known as local-service carriers or feeder lines. fixed to the airplane fuselage and outspread in flight
(nonrotating wings).
Field ticket office see FTO.
Fleet planning the aircra selection process.
Final report the final accident report issued by the
NTSB that cites the probable cause of the accident. Flight airborne movement of an aircra . Commonly
used to mean scheduled flight.
Financial (capital) lease a long-term lease
(generally 12 to 15 years) that, because of (1) Flight dispatch the overall planning of flight
restrictions on termination, (2) its long term, and (3) operations. Flight dispatch personnel work closely
the contractual commitment to pay the total value of with the flight crew in preparing all details pertaining
the lease payments, is considered a form of capital to the proposed flight, including such factors as the
financing. nature and duration of the flight, weather conditions
at various flight altitudes, airway routing to be used,
First-class passenger revenues revenues from the and fuel requirements.
air transportation of passengers at standard fares,
premium fares, or reduced fares, such as family plan Flight equipment airframes, aircra engines,
and first-class excursion, for whom standard- or aircra propellers, aircra communications and
premium-quality services are provided. navigational equipment, miscellaneous equipment
used in the operation of the aircra , and improvements
First-class service transport service established for to leased flight equipment.
the carriage of passengers at standard fares, premium
fares, or reduced fares, such as family plan and first- Flight-equipment cost the total cost to the air carrier
class excursion, for whom standard- or premium- of the complete airframe; fully assembled engines;
quality services are provided. installed aircra propellers, rotary wing aircra
rotors, and similar assemblies; installed airborne
Fitness an applicant carrier’s size, financial communications and electronic navigational
resources, flight equipment, strategy for conducting equipment and other similar assemblies; complete
proposed operations, and past performance in units of miscellaneous airborne flight equipment;
conforming to various legal requirements. and costs of modification, conversion, or other
improvements to leased flight equipment.
Five Freedoms Agreement the International
Air Transport Agreement that arose out of the Flight-equipment expendable parts flight-equipment
Chicago Conference of 1944 proposing two basic replacement parts of a type recurrently expended and
freedoms (see Two Freedoms Agreement) plus three replaced rather than repaired or revised.
additional freedoms: (1) the privilege of pu ing
down passengers, mail, and cargo taken on in the Flight-equipment spare parts and assemblies parts
territory of the state whose nationality the aircra and assemblies of material value that are generally
possesses; (2) the privilege of picking up passengers, reserviced or repaired and used repeatedly and
mail, and cargo destined for the territory of the state that possess a service life approximating that of the
whose nationality the aircra possesses; and (3) the property type to which they relate.
privilege of picking up passengers, mail, and cargo
destined for the territory of any other contracting Flight, scheduled any aircra itinerary periodically
state and the privilege of pu ing down passengers, operated between terminal points that is separately
mail, and cargo coming from any such territory. designated, by flight number or otherwise, in the
published schedules of an air carrier.
Fixed assets the land, plant and equipment, and
other physical productive assets of a firm that are Flight service station (FSS) an FAA-operated air/
expected to have a useful life in excess of one year. ground voice communications station that relays

GL OSSAR Y 533



clearances, requests for clearances, and position that allows frequent fliers to earn free tickets a er
reports between en route aircra and the air route accumulating a certain number of miles flown on
traffic control center. In addition, the FSS provides the carrier. First introduced by American Airlines,
preflight briefing for flights operating under either which recognized that roughly 5 to 6 percent of their
visual or instrument flight rules, gives in-flight fliers account for about 40 percent of all trips taken
assistance, broadcasts weather once each hour, annually. It was a marketing program originally
monitors radio navigational facilities, accepts flight aimed at creating flier loyalty in response to price
plans for aircra operating under visual flight rules competition in the early 1980s.
and provides notification of arrival, and broadcasts
notices to airmen (NOTAMS) concerning local Fringe benefits insurance plans, pensions,
navigational aids, airfields, and other flight data. vacations, and similar benefits for employees.
Flight stage the operation of an aircra from takeoff FSS see Flight service station.
to landing. (See also Overall flight stage length.)
FTO (field ticket office) a ticket office located on
Flying operations expenses expenses incurred airport property.
directly in the in-flight operation of aircra and
expenses a ached to the holding of aircra and aircra Fuel tax an excise tax paid by an airline on the
operational personnel in readiness for assignment to aviation gasoline and jet fuel it purchases.
in-flight status.
Functions of management the process of achieving
Forecasting the a empt to quantify demand in a an organization’s goals through the coordinated
future time period. Quantification can be in terms of performance of five specific functions: planning,
dollars, such as revenue, or some physical volume, organizing, staffing, directing, and controlling.
such as revenue passenger miles or passenger
enplanements. GAMA (General Aviation Manufacturers
Association) a trade organization of the
Foreign air carrier permit a permit issued by manufacturers of light aircra and component parts.
the former CAB or the DOT to a foreign air carrier
authorizing it to conduct air transport operations General and administrative expenses expenses of
between foreign countries and cities in the United a general corporate nature and expenses incurred
States, either in accordance with the terms of a in performing activities that contribute to more
bilateral air transport agreement or nonscheduled air than a single operating function, such as general
service agreement or under conditions of comity and financial accounting activities, purchasing activities,
reciprocity. representation at law, and other general operational
administration not directly applicable to a particular
Foreign-flag carrier an air carrier other than a function.
U.S.-flag air carrier engaged in international air
transportation. Foreign air carrier, a more inclusive General aviation aviation other than military and
term than foreign-flag air carrier, presumably includes commercial common carriage, including business
those non-U.S. air carriers operating solely within flying, instructional flying, personal flying, and
their own domestic boundaries, but in practice the commercial flying such as agricultural spraying and
two terms are used interchangeably. aerial photography.
401 carrier an air carrier certificated under Section General Aviation Manufacturers Association see
401 of the Federal Aviation Act of 1958 by the former GAMA.
CAB or the DOT authorizing the carrier to engage in
air transportation. General commodity rate the basic or normal price
applicable to all commodities in all markets. General
Freight property other than express and passenger commodity shipments are rated by weight. As the
baggage transported by air. weight of a shipment increases, the per pound rate
decreases.
Freight revenues revenues from the transportation
by air of property other than express or passenger General-use airport an airport serving as a regular,
baggage, predominantly from individually waybilled alternative, or provisional stop for scheduled and
shipments carried in scheduled service. nonscheduled air carriers and non–air carriers and
offering minimum services, such as fuel and regular
Frequent-flier program an air carrier program a endants during normal working hours; also,

534 AIR TRANSPOR T A TION



airports operating seasonally that qualify under the Hub-and-spoke system a system that feeds air
above definition. traffic from small communities through larger
communities to the traveler’s destination via
Glider a heavier-than-air aircra whose flight does connections at the larger community.
not depend principally on a power-generating unit.
IATA (International Air Transport Association) a
Go-team the NTSB accident investigators who are voluntary organization open to any scheduled
on 24-hour alert to respond to any major accident. air carrier whose home country is a member (or
The team is generally made up of experts trained eligible to be a member) of the International Civil
in witness interrogation, air traffic control, aircra Aviation Organization (ICAO). The IATA’s main
operations, and aircra maintenance records. function is the economic regulation of international
air transportation—in particular, international rates
Gross profit profit earned on sales a er deducting and fares that are set by one of seven regional or
the cost of the goods sold but before deducting other joint traffic conferences and subject to unanimous
business expenses. resolutions of the carriers, provided that the countries
do not object.
Grounding see Aircra grounding.
ICAO (International Civil Aviation Organization) a
Ground movement pickup and delivery and/or specialized agency of the United Nations composed
connecting or joint motor carrier service pursuant to of contracting states whose purpose is to develop
interline air/ground agreements. the principles and techniques of international
air navigation and to foster the planning and
Ground property and equipment property and development of international air transport.
equipment other than flight equipment, land, and
construction work in progress. IFR see Instrument flight rules.

Ground transportation surface transportation Incidental revenues, net revenues less related
between an airport and city or between two or more expenses from services incidental to air transportation,
airports. It is provided by private or government such as sales of service, supplies, and parts, and
operated limousine, bus, cab, or rail, and may include rental of operating property and equipment.
baggage transfer service.
Income before taxes net sales minus the cost of
Guaranteed loan see Loan, guaranteed. goods or services sold, minus operating expenses,
minus nonoperating expenses.
Helicopter a type of aircra that derives li from
the revolving of “wings” (engine-driven blades) Income, net (a er income taxes) net income (before
about an approximately vertical axis. A helicopter income taxes) less federal income taxes.
does not have conventional fixed wings, nor in
any but some earlier models is it provided with a Income, net (before income taxes) net operating
conventional propeller, forward thrust and li being income plus or minus other income and expenses.
furnished by the rotor. The powered rotor blades also
enable the machine to hover and to land and take off Income, net operating total net sales less total
vertically. operating costs.
Hub, air traffic a city or standard metropolitan Income statement a statement of revenues and
statistical area requiring aviation services. expenses and resulting net income or loss covering a
Communities fall into four classes, as determined by stated period of time, usually one year.
their percentage of the total enplaned passengers in
scheduled and nonscheduled service of the domestic Income taxes for the period provisions for federal,
certificated route airlines in the 50 states, the District state, local, and foreign taxes that are based on net
of Columbia, and other U.S. areas designated by the income.
Federal Aviation Administration. A large hub is a
community that enplanes 1 percent or more of total Indirect operating cost all costs that will remain
enplaned passengers for all air services in the United unaffected by a change of aircra type because they
States; a medium hub, from 0.25 to 0.99 percent; a are not directly dependent on aircra operations
small hub, from 0.05 to 0.24 percent; and a nonhub, (for example, passenger service costs, costs of
less than 0.05 percent. ticketing and sales, station and ground costs, and
administrative costs).

GL OSSAR Y 535



Industrial/special use any use of an aircra for territories, and between foreign points. Includes both
specialized work allied with industrial activity, the combination passenger/cargo carriers and the all-
excluding transportation and aerial application cargo carriers engaged in international operations.
(pipeline patrol, survey, advertising, photography,
helicopter hoist, and so forth). Interstate see Air transportation, interstate.

Industrywide bargaining agreement between Intrastate see Air transportation, intrastate.
unions and managements of major firms of an industry
to bargain collectively to reach contract terms that will Inventory management the strategy of selling
apply to all the firms and their employees, wherever as many seats as possible at the highest possible
they are located. One purpose is to take wages out of fares. This usually means making available an
competition. adequate number of lower-fare seats far in advance
of the departure date in order to accommodate price-
Inelastic demand demand situation that occurs sensitive business passengers.
when a given percentage change in price is
accompanied by a relatively smaller change in Investment bank a bank that serves as an
passengers carried (consumers are unresponsive). intermediary between investment sources
The coefficient of elasticity of demand is less than and those who need funds. Investment
1. When demand is inelastic, a price increase will bankers serve as consultants and advisers
increase total revenue and a price decrease will lower regarding private debt placement and public equity
total revenue. offerings.

Instructional flying any use of an aircra for Investments and special funds long-term
the purposes of formal instruction with the flight investments in securities of others exclusive of U.S.
instructor aboard or with the maneuvers on the government securities; funds set aside for specific
particular flights specified by the flight instructor. purposes; and other securities, receivable equipment
purchase deposits, and applicable capitalized interest
Instrument flight rules (IFR) rules specified by or funds not available for current operations.
qualified authority (FAA) for flight under weather
conditions such that visual reference cannot be made JAMTO (joint airline/military ticket office) a ticket
to the ground and the pilot must rely on instruments office located at a military base and generally staffed
to fly and navigate. by personnel from several air carriers.
Integrated carriers carriers that operate door-to- Jet fuel the kerosene used to fuel turbine-powered
door freight transportation networks that include aircra , as opposed to aviation gasoline used in
all-cargo aircra , delivery vehicles, sorting hubs, and piston-engine aircra .
advanced information systems. Also called express
carriers. Jetway a trade name, used to describe all makes
and models of passenger loading bridges. A passenger
Intensive growth strategies a empts to more loading bridge is an enclosed, movable walkway that
intensively penetrate existing target markets, increase connects the cabin of an airplane with the terminal.
product development, and develop new target
markets. Job description a statement of the objectives,
authority, responsibility, and relationships with others
Interest expense interest on all classes of debt, required by a person occupying a specific position.
including premium, capitalized interest, and
expenses on short-term obligations and amortization Job evaluation a formalized system for determining
of premium discounts and expenses on short-term the worth, in monetary terms, of all jobs within an
and long-term obligations. organization.

International Air Transport Association see IATA. Joint airline/military ticket office see JAMTO.
International Civil Aviation Organization see Joint fare a single fare that applies to transportation
ICAO. over the joint lines or routes of two or more carriers
and that is made and published by an agreement
International operations those operations between between the carriers.
the 50 states of the United States and foreign points,
between the 50 states and U.S. possessions or Joint rate an air freight rate for domestic shipments

536 AIR TRANSPOR T A TION



transported on two or more airlines between origin Line of credit the amount and the terms upon
and destination. which a bank will advance funds as required. The
amount may vary from several thousand dollars to
Judgmental forecasts forecasts based on intuition millions, depending on the size of the airline and its
and subjective evaluation of the future. Normally, credit condition.
they are derived from expert opinion, sales force
estimates, and various customer research polls. Line personnel those employees whose orders and
authority flow in a straight line from the chief execu-
Land the initial cost and the cost of improving land tive down to lower levels in the organization. Line
owned or held in perpetuity by an air carrier. personnel are directly involved in producing or
selling air transportation. Commonly referred to as
Landing area any locality, either of land or water, volume-related people because their numbers are
including airports and intermediate landing fields, generally determined by some volume such as flying
that is used, or intended to be used, for the landing hours or departures.
and takeoff of aircra , whether or not facilities are
provided for the shelter, servicing, or repair of aircra Liquidity ability to meet current obligations. The
or for receiving or discharging passengers or cargo. ease with which an asset can be converted to cash.

Law of demand the inverse relationship between Load factor, revenue passenger the proportion
price and quantity. As price falls, the corresponding of aircra seating capacity that is actually sold
quantity demanded rises; alternately, as price and utilized. Revenue passenger miles divided by
increases, the corresponding quantity demanded available seat-miles.
falls.
Loan, guaranteed an aircra purchase loan
Law of diminishing returns law stating that as guaranteed by the federal government and
resources (labor, capital equipment) are added to administered by the Department of Transportation
a fixed capacity (number of aircra , gate positions, to assist certain carriers in obtaining suitable flight
hangars), output (ASMs) might well increase equipment.
at an increasing rate while existing capacity is
underutilized. However, beyond some point, ASMs Local-service air carriers a class of air carriers that
will increase at a decreasing rate, until the ultimate originally provided service to small and medium
capacity in the short run is reached. communities on low-density routes to large hubs
and that were eligible for CAB subsidies to cover
Levels of management the levels of authority and operating losses from such service. These carriers
responsibility within an organization. Top management have since evolved from their feeder airline origins
is the highest level and includes the company’s chief into medium to large airlines.
policymakers, including senior officers responsible
for major administrations. Middle management is Long-term debt the face value or principal amount
responsible for developing operational plans and of debt securities issued or assumed by the air carrier
procedures and includes heads of departments and held by other than associated companies or
and divisions. Operating management is the lowest nontransport divisions, which has not been retired
level and includes managers and supervisors who or canceled and is not payable within 12 months of
are primarily concerned with pu ing into action the balance sheet date.
operational plans devised by middle management.
Long-term debt/equity ratio the percentage of the
Liability the equity of a creditor. business that is financed by creditors in relation to
that financed by owners. It is computed by dividing
Liability, current an obligation that becomes due long-term debt plus capitalized leases by net
within a short time, usually one year. stockholder equity. The higher the number, the less
able a company is to borrow money.
Limited-use airport an airport available to the
public but not equipped to offer minimum services. Long-term loan a loan negotiated for long-term
capital projects and aircra purchases.
Line departments those areas in an airline that
are directly involved in producing or selling air Long-term prepayments prepayments of obli-
transportation. They fall under the following gations, applicable to periods extending beyond one
administrations: flight operations, engineering and year.
maintenance, and marketing.

GL OSSAR Y 537



MAC see Military Airli Command. meaningful consumer groups or market segments in
order to identify a target market.
Maintenance, direct the cost of labor, materials,
and outside services consumed directly in periodic Market strategy approach used in the fleet-planning
maintenance operations and the maintenance, repair, process when integrating new aircra into the fleet.
or upkeep of airframes, aircra engines, other flight Included are such considerations as the proposed
equipment, and ground property and equipment. level of service between key city-pairs, emphasis
on long-haul or short-haul routes, and fare and rate
Maintenance efficiency goals four primary structures in various passenger and cargo markets.
productivity goals: (1) minimize aircra out-
of-service time, (2) use up time allowable Merger the acquisition of one firm by another,
on aircra and parts between overhaul, either through purchase of stock or direct purchase
(3) seek optimum utilization of personnel and even of assets, and the merging of operations.
workload, and (4) maximize utilization of facilities.
Mile a statute mile (5,280 feet).
Maintenance, indirect overhead or general
expenses of activities involved in the repair and Military activities under charter or other contract
upkeep of property and equipment, including with the Department of Defense.
inspections of equipment in accordance with
prescribed operational standards. Includes expenses Military Airli Command (MAC) a major
related to the administration of maintenance stocks command organization of the United States Air Force
and stores, the keeping of maintenance operations that provides air transportation for personnel and
records, and the scheduling, controlling, planning, cargo for all military services on a worldwide basis.
and supervising of maintenance operations. MAC is the contractor for the U.S. Air Force’s Logair
and the U.S. Navy’s Quicktrans.
Maintenance needs maintenance considerations in
the acquisition of a new aircra . Included are such Misconnection a passenger who, due to late arrival
factors as spare parts availability, aircra compatibility or cancellation of his or her originating flight, arrives
with the rest of the fleet, product support, technical at a connecting point too late to board the connecting
record keeping, and training support in terms of flight.
visual and audio aids.
Missile a term sometimes applied to space launch
Major air carriers a class of certificated air carriers vehicles but that more properly denotes automatic
whose annual gross revenues are over $1 billion. weapons of warfare (weapons that have an integrated
system of guidance, as opposed to unguided
Management the process of combining and guiding rockets).
the factors of production to achieve the desired goals
of the firm. Mixed-class service transport service for the
carriage in any combination of first-class, coach
Management by objectives a process in which (tourist), and/or economy (thri ) passengers on the
employees at all levels are given tangible, usually same aircra . The aircra could also carry freight,
numerical, goals and held accountable for achieving express, and/or mail. Excludes all-first-class, all-
them. coach, and all-economy services.
MAP see Mutual aid pact. Model the general characterization of a process,
object, or concept in terms of mathematics. A model
Marketing the broad area of business activity that enables a relatively simple manipulation of variables
directs the flow of services provided by the firm to the to be accomplished in order to determine how the
consumer in order to satisfy customers and to achieve process, object, or concept would behave in different
company objectives. situations.

Marketing mix the types and amounts of Mortgage a pledge of real estate as security for a
controllable marketing decision variables that a loan.
company uses over a particular time period: product,
price, promotion, and place. Multilateral agreement an agreement or treaty
between three or more nations contracting for reciprocal
Market segmentation the process of dividing international air service between the various nations,
potential customers for a product or service into such service to be operated by designated carriers of

538 AIR TRANSPOR T A TION



each nation. The agreement may include provisions aviation before Congress, the administration, and
for the type of aircra used, intermediate stops en its regulatory agencies, such as the Federal Aviation
route, aircra airworthiness, taxation-free fuel, and Administration.
arbitration procedures. It is usually a standardized
agreement used in negotiations for air transport National Mediation Board three individuals
between one nation and many others, allowing for appointed by the president whose primary
the inclusion of different points and routes. responsibility is to mediate major labor disputes
under the Railway Labor Act. The board has
Mutual aid pact (MAP) an agreement between the jurisdiction over disputes involving rates of pay or
major carriers during the 20-year period from 1958 to changes in rules and working conditions in those
1978 that provided for mutual assistance in the event instances in which the parties to an agreement have
that any carrier’s flight operations were shut down been unable to reach a se lement.
by a strike. If one or more members of the agreement
were struck, the other members of the pact paid the National Transportation Safety Board (NTSB) an
struck carriers windfall revenues they realized from autonomous agency established in 1975 by the
the strike less the added expense of carrying the Independent Safety Board Act. The board seeks
additional traffic. to ensure that all types of transportation in the
United States are conducted safely. The board
Mutual dependence a characteristic of oligopolistic investigates accidents and makes recommendations
industries: the necessity of each seller to consider to government agencies, the transportation industry,
the reactions of competitors when se ing prices or and others on safety measures and practices.
implementing other competitive strategies.
Navigable airspace the airspace above the minimum
NASA (National Aeronautics and Space altitudes of flight prescribed by regulations issued
Administration) a U.S. government organization under the FAA Act, which includes airspace needed
established by the National Aeronautics and Space to ensure safety in takeoff and landing of aircra .
Act of 1958 with the principal statutory functions to
(1) conduct research for the solution of problems of NBAA see National Business Aircra Association.
flight within and outside the earth’s atmosphere and
develop, construct, test, and operate aeronautical and Net earnings (profit or loss) revenues minus
space vehicles; (2) conduct activities required for the expenses, taxes, interest paid, and depreciation. The
exploration of space with manned and unmanned earnings of a company a er allowing for all legitimate
vehicles; and (3) arrange for the most effective business expenses, including taxes.
utilization of the scientific and engineering resources
of the United States with other nations engaged Net income before income taxes operating profit
in aeronautical and space activities for peaceful or loss plus or minus nonoperating income and
purposes. Many of NASA’s research programs have expenses.
led to findings and developments that are applicable
to today’s commercial air transportation. Net operating property and equipment, as a
percentage of cost the cost of operating property
NASAO (National Association of State Aviation Offi- and equipment less related depreciation and
cials) based in Washington, D.C., an organization overhaul reserves as a percentage of the total cost of
representing the interests of 47 state aviation agencies operating property and equipment before deducting
and Puerto Rico in promoting and developing air such reserves.
transportation at the local, state, and federal levels.
Net worth the difference between assets and
National Aeronautics and Space Adminis- liabilities for a person, family, or business. If the dollar
tration see NASA. value of assets is greater than that of liabilities, there
is a positive net worth. In a business, net worth might
National air carriers a class of certificated air also be known as partnership share or owner’s equity.
carriers whose annual gross revenues are between
$100 million and $1 billion. Noncurrent liabilities obligations whose
liquidation is not expected to require the use, within
National Association of State Aviation Officials see one year, of current assets or the creation of current
NASAO. liabilities.

National Business Aircra Association Nonoperating costs and revenues income and loss
(NBAA) the principal representative of business of commercial ventures not part of the common-

GL OSSAR Y 539



carrier air transport services of the accounting entity; Oligopoly a market in which a few firms sell either
other revenues and expenses a ributable to financing a similar or differentiated product or service, into
or other activities that are extraneous to and not an which entry is difficult, in which the firm’s control
integral part of air transportation or its incidental over the price at which it sells its product or service is
services. limited by mutual dependence, and in which there is
typically extensive nonprice competition.
Nonrevenue flights flights and flight stages
involving training, testing, positioning for scheduled Open-sky agreement an agreement that permits
flights, ferrying, company business, publicity, carriers of different countries to fly any route they
and forced returns for which no remuneration is wish between the countries and to continue those
received. flights into third countries, although cabotage is still
not permi ed.
Nonroutine maintenance generally the result of an
unforeseen event, an accident or random occurrence, Operating economics an aircra ’s contribution to
or a response to an airworthiness directive (AD). the company’s profitability, including its revenue
Examples would include corrosion control, cabin potential and direct operating costs in terms of
upgrading, installation of a hushkit, and repairing airplane miles and seat-miles.
damage from a bird strike or a dent from a catering
truck. Operating expenses expenses incurred in the
performance of air transportation, including direct
Nonscheduled freight property carried in charter aircra operating expenses and ground and indirect
operations. operating expenses.
Nonscheduled service revenue flights not operated Operating income (profit or loss) the profit or loss
in regular scheduled service—principally contract from performance of air transportation before income
and charter operations. taxes, based on overall operating revenues and overall
operating expenses. Does not include nonoperating
Nonstop service between two points on a single income and expenses or special items.
flight with no scheduled stops between the points.
Authority granted to a carrier, in a certificate of public Operating leases short-term leases (generally not
convenience and necessity, to service two points more than five years) that have varying degrees of
without additional stops. flexibility for cancellation by the airlines. They gen-
erally convey no residual value in the aircra and,
Non-volume-related workers see Staff personnel. from an accounting standpoint, are considered
strictly an operating cost.
Normal (standard or basic) fare a fare that applies
to all passengers at all times without restriction and is Operating profit and equipment land and units
the basis for all other fares. Separate normal fares are of tangible property and equipment used in air
provided for each class of service: first class, coach, transportation services and incidental services.
and economy.
Operating revenues revenues from the performance
No-show a person who books a reservation of air transportation and related incidental services,
or purchases a ticket for a flight and fails including (1) transport revenues from the carriage of
to use the reservation or ticket or to notify all classes of traffic in scheduled and nonscheduled
the carrier of that intent before the flight’s services, including the performance of aircra
departure. charters, and (2) nontransport revenues, consisting
of federal subsidies (where applicable) and the net
NTSB see National Transportation Safety Board. amount of revenues less related expenses from
services incidental to air transportation.
Official Airline Guide a bimonthly publication
of the airlines’ scheduled operations and services Operational factors factors that must be taken
showing service and fares to one city from all other into consideration in the schedule-planning process.
cities where direct or simple connecting service is Included are airport runway lengths, aircra fuel
available. capacity, habitual adverse weather, air traffic control
and routings, crew time limits, and employee
Off-peak pricing a promotional fare designed to agreements.
a ract passengers during an otherwise slack period.

540 AIR TRANSPOR T A TION



Operations, domestic see Domestic operations. Other deferred credits an unamortized premium on
debt and credits not provided for elsewhere, the final
Operations, international see International disposition of which must await receipt of additional
operations. information.

Organization the official relationships or the Other investments and receivables notes and
positions generally shown on an organizational accounts receivable not due within one year and
chart and stated in job descriptions. A plan for investments in securities issued by others except
bringing together resources (capital and labor) into associated companies.
the position of greatest effectiveness, or productivity.
The plan consists of the grouping of operations Other noncurrent liabilities liabilities under
(labor and equipment) to achieve the advantages of company-administered employee pension plans and
specialization and a chain of command. for installments received from company personnel
under company stock purchase plans, advances from
Organizational chart a diagram showing positions associated companies, and noncurrent liabilities.
and their relationships to one another in an
organization. Other nonoperating income and expenses
net capital gains or losses or retirement of
Organizing the grouping of component activities nonoperating property and equipment and
that assigns each grouping to a manager and investments in securities of others, interest and
establishes authority relationships among the dividend income, and other nonoperating items
groupings. except capital gains or losses on operating property
and interest expense.
Origin and Destination Survey a domestic (also
international) origin–destination survey of airline Other paid-in capital premiums and discounts
passenger traffic, a 10-percent sample of passengers’ on capital stock, gains or losses arising from the
origins and destinations in air transportation based reacquisition and the resale or retirement of capital
on an analysis of selected flight coupons. stock, and other paid-in capital.

Other accrued taxes accruals for taxes, exclusive of Other temporary cash investment securities and
federal income taxes, constituting a charge borne by other collectible obligations acquired for the purpose
the air carrier. of temporarily investing cash, other than those issued
by the U.S. government or associated companies.
Other aerospace products and services all
conversions, modifications, site activation, other Other transport revenues miscellaneous revenues
aerospace products (including drones) and services, associated with the air transportation performed by
basic and applied research in the sciences and the air carrier, such as airline employees, officers and
in engineering, and design and development of directors, or other persons, except ministers of religion
prototype products and processes. who travel under reduced-rate transportation;
reservation cancellation fees; and other items not
Other current and accrued liabilities accruals specified in other transport revenue accounts.
for liabilities against the air carrier for personnel
vacations, dividends declared but unpaid on capital Overall aircra revenue hours, scheduled
stock, and other miscellaneous current and accrued service the airborne hours computed from the
liabilities. moment an aircra leaves the ground until it touches
the ground at the end of the flight.
Other current assets prepayments of rent,
insurance, taxes, and so forth, which if not paid in Overall capacity per aircra the average overall
advance would require the expenditure of working carrying capacity (tons) offered for sale per aircra
capital within one year, and other current assets not in revenue services, derived by dividing the overall
provided for in specific objective accounts. available ton-miles by the overall aircra miles flown
in revenue services.
Other deferred charges unamortized discounts
and expenses on debt; unamortized capital stock Overall flight stage length the average distance
expenses; and debits not provided for elsewhere, covered per aircra hop in revenue service, from
the final disposition of which must await receipt of takeoff to landing, including both passenger/cargo
additional information. and all-cargo aircra . Obtained by dividing the
overall aircra miles flown in revenue services by

GL OSSAR Y 541



the number of overall aircra revenue departures Passenger service expenses costs of activities
performed. contributing to the comfort, safety, and convenience
of passengers while in flight and when flights are
Overbooking the sale of (or the acceptance of interrupted. Includes salaries and expenses of cabin
reservations for) more space (passenger seats) than is a endants and passenger food service.
actually available on a flight. A practice that is used
sometimes by the air carriers as an allowance for the Pa ern bargaining bargaining that takes place
historical percentage of passengers who fail to utilize when each airline negotiates its own agreement with
the space they have reserved. In those cases in which a labor union. Each union seeks to be er the most
the actual number of passengers with purchased recent agreements signed by other airlines, thus
tickets exceeds the available space, the carrier is liable establishing a pa ern.
for denied boarding compensation to those passengers
not accommodated on the flight or on comparable air Payload the actual or potential revenue-producing
transportation. portion of an aircra ’s takeoff weight in passengers,
free baggage, excess baggage, freight, express, and
Overflight a scheduled flight that does not stop at mail.
an intermediate point in its scheduled route because
(1) the point is certified as a flag stop, and there is no Payload-range diagram a diagram that shows the
traffic to be deplaned or enplaned; (2) the carrier has relationship between payload (number of passengers
received authority to suspend service to that point and cargo) and the distance the aircra can fly.
temporarily; (3) weather conditions or other safety
and technical reasons do not permit landing; or (4) Personal flying any use of an aircra for personal
for any other reason. The aircra need not fly directly purposes not associated with a business or profession,
over the point. and not for hire. This includes maintenance of pilot
proficiency.
Passenger enplanements the total number of
revenue passengers boarding aircra , including Physical performance factor used in the fleet-
originating, stopover, and on-line transfer planning process to denote the actual flight
passengers. performance of an aircra under consideration.
Included are such items as payload-range capability;
Passenger mile one passenger transported one takeoff, landing, cruise, and approach speeds; runway
mile. Passenger miles are computed by multiplying requirements; noise performance; and flight handling
the aircra miles flown on each flight stage by the characteristics.
number of passengers transported on that stage.
Piston plane an aircra operated by engines in
Passenger mile, nonrevenue one nonrevenue which pistons moving back and forth work upon
passenger transported one mile. a cranksha or other device to create rotational
movement.
Passenger mile, revenue see Revenue passenger
mile. Place the element in the marketing mix that
includes all institutions and activities that contribute
Passenger, revenue a person receiving air to delivering the product at the times and to the
transportation from the air carrier for which places consumers desire; in other words, a convenient
remuneration is received by the air carrier. Air carrier facility or sales outlet where customers can purchase
employees or others receiving air transportation the service.
against whom token charges are levied are considered
nonrevenue passengers. Infants for whom a token fare Planning the function of management that
is charged are not counted as revenue passengers. determines what shall be done, how it shall be done,
why it shall be done, and who shall do it.
Passenger, revenue per aircra the average
number of passengers carried per aircra in revenue Policy and procedures manual guidelines that
passenger services, derived by dividing the total employees must follow in making decisions. Each
revenue passenger miles by the total aircra miles major administration within an airline has policies
flown in revenue passenger services. and procedures regarding the management of its
specific operations.
Passenger revenue ton-mile one ton of revenue
passenger weight (including all baggage) transported Positioning flights flights designed to position or
one mile. put an aircra in a location for a heavy bank of flights

542 AIR TRANSPOR T A TION



at a popular time—for example, late-evening flights aircra is then ready to go into production.
into a large hub.
Production-oriented period the period of airline
Preferred stock a share in the ownership of the marketing before World War II during which the
company that carries a fixed annual dividend that market demand for air travel was just sufficient
must be paid before dividends can be declared on to absorb the available capacity provided by the
common stock. carriers.
Price the consideration or level of remuneration Profit in ordinary accounting terms, the excess
established by the seller for a product or service. of sales revenues a er all related expenses are
deducted.
Primary-use categories categories developed
by the FAA to categorize general aviation aircra Profit sharing an incentive system whereby
by use as reported by aircra owners in an annual employees can share in the profits of the company.
survey. The primary-use categories include business,
commercial, instructional, personal, and other. Progress payments payments that an airline
Business flying has two divisions (executive and makes to a manufacturer while an aircra is under
business); commercial has three (air taxi/commuter, production.
rental, and aerial application and observation and
other work). Projected industry environment projection used
in the fleet-planning process to denote the national,
Priority mail mail bearing postage for air industry, and company’s economic outlook over the
transportation on a priority basis at air mail service next 1-, 5-, and 10-year periods.
rates.
Promotion part of the marketing mix; persuasive
Priority reserved air freight freight service communication between the carrier and the customer.
designed for shippers of heavy or bulky freight who This communication can be made in various ways,
need the advantage of reserved space on a specific but the two most important forms of promotional
flight. communication are advertising (sometimes referred to
as mass selling) and personal selling. In a broader sense,
Privately owned airport an airport owned by a everything the company does has a promotional
private individual or corporation. potential: the courtesy of employees and uniform
styling can promote sales.
Private-use airport an airport that is not open for
the use of the general public. Promotional fares see Fare, discount.
Procurement the process whereby the executive Promotion and sales expenses costs incurred
agencies of the federal government acquire goods in promoting air transportation generally and in
and services from enterprises other than the federal creating a public preference for the services of
government. particular air carriers. Includes the functions of
selling, advertising and publicity, making space
Product the physical entity or service that is offered reservations, and developing tariffs and flight
to the buyer, plus a whole group of services that schedules for publication.
accompanies it. For example, the airline product
includes not only a seat departure but also frequency Publicly owned airport an airport that is owned by
of departures, in-flight cabin services, ground services a city, state, or county or by the federal government.
including ticketing and baggage handling, aircra
type, and even the carrier’s perceived image. The Public service revenues (subsidy) payments by
sale of a general aviation aircra includes not only the federal government that provide for air service
the aircra itself but also its availability, methods of to communities in the United States where traffic
financing, maintenance requirements, and so forth, levels are such that air service could not otherwise
which marketing people refer to as extensions to the be supported.
product.
Public-use airport an airport that is open for the
Production certificate a certificate issued by the FAA use of the general public.
to an aircra manufacturer a er the type certificate
and only when the manufacturer’s capability to RAA (Regional Airline Association) a trade
duplicate the type design has been established. The organization of regional and commuter air carriers.

GL OSSAR Y 543



R & D see Research and Development. Reserves for obsolescence and deterioration,
expendable parts accruals for losses in the value of
Railway Labor Act a special federal law applicable expendable parts.
only to the airlines and the railroads. This act
was passed to provide a clear series of steps to the Reserves for overhaul accruals for overhauls of
se lement of transport labor disputes. flight equipment.
Rate of return, corporate (return on investment, Reserves for uncollectible accounts accruals for
or ROI) an overall rate of return on investment estimated losses from uncollectible accounts.
representing a return on the air carrier’s total
operations, including nontransport ventures. The Responsibility the creation of an obligation on the
corporate rate of return is obtained by dividing the part of subordinates for satisfactory performance.
net income a er taxes plus interest expenses on debt
by the total investment in the carrier. Restricted-use airport an airport whose use by the
general public is prohibited, except in the case of a
Regional air carriers a class of certificated air forced landing or by previous arrangement.
carriers. Airlines are classified as large regional air
carriers if their annual gross revenues are between Retained earnings corporate profits that are not
$10 million and $75 million and as medium regional paid out in cash dividends but are reinvested in the
air carriers if their annual gross revenues are under company to foster its growth.
$10 million.
Retained earnings adjustments charges or credits to
Regional Airline Association see RAA. unappropriated retained earnings, other than
dividends, that reflect transfers to paid-in capital
Related products and services all nonaircra , accounts or appropriations.
non–space vehicle, and nonmissile products and
services produced or performed by those companies Retained earnings, appropriated retained earnings
and establishments whose principal business is segregated for contingencies and other special
the development or production of aircra , aircra purposes, including retained earnings segregated in
engines, missile and spacecra engines, missiles, and connection with self-insurance plans.
spacecra .
Retained earnings, unappropriated the cumulative
Research and Development (R & D) research is net income or loss from operations of the air carrier
the systematic study directed toward fuller scientific less dividends declared on capital stock and amounts
knowledge or understanding of the subject studied. appropriated for special purposes.
Research is classified as either basic or applied,
according to the objectives of the sponsoring agency. Return on investment see Rate of return,
Basic research has the objective of gaining fuller corporate.
knowledge or understanding of the fundamental
aspects of phenomena and of observable facts Revenue compensation or remuneration received
without specific applications toward processes or by the carrier.
products in mind. Applied research has the objective
of gaining knowledge or understanding necessary Revenue aircra departures performed the number
for determining the means by which a recognized of aircra takeoffs actually performed in scheduled
and specific need may be met. Development is the passenger/cargo and all-cargo services.
systematic use of scientific knowledge directed toward
the production of useful materials, devices, systems, Revenue aircra miles the total aircra miles flown
or methods, including design and development of in revenue service.
prototypes and processes.
Revenue passenger see Passenger, revenue.
Reservation the agreement between an airline and
a customer that assures that the customer will have a Revenue passenger mile (RPM) one revenue
seat on the flight(s) he or she wants. It may be subject passenger transported one mile in revenue service.
to requirements for date or time of ticket purchase. Revenue passenger miles are computed by summation
of the revenue aircra miles flown on each interairport
Reserves for depreciation accruals for depreciation flight stage multiplied by the number of passengers
of property and equipment. carried on that flight stage.

544 AIR TRANSPOR T A TION



Revenue ton-mile one ton of revenue traffic Scheduled service transport service operated over
transported one mile. Revenue ton-miles are an air carrier’s certificated routes, based on published
computed by multiplying tons of revenue traffic by flight schedules, including extra sections and related
the miles this traffic is flown. nonrevenue flights.

ROI (return on investment) see Rate of return, Schedule, published an official schedule of an air
corporate. carrier published in the Official Airline Guide (OAG)
or the ABC World Airways Guide showing all flights
Route a system of points to be served by an that will be operated by the air carrier between
air carrier, as indicated in its certificate of public various points and the time of arrival and departure
convenience and necessity. A route may include all at each point.
points on a carrier’s system or may represent only
a systematic portion of all of the points within a Schedule types four basic schedule types used
carrier’s total system. by the air carriers: (1) skipstop, (2) local service, (3)
cross-connection, and (4) nonstop.
Route, certificated a listing of points to which an
air carrier is authorized to provide air transportation, Scheduling the art of designing systemwide flight
subject to the terms, conditions, and limitations pa erns that provide optimum public service, in both
prescribed in a carrier’s certificate of public quantity and quality, consistent with the financial
convenience and necessity. health of the carrier.

Routine scheduled maintenance regular scheduled Scheduling department the department, generally
maintenance activities, usually in the form of a le er under the marketing administration, charged
check—A through D—all performed at regular inter- with the responsibility of developing systemwide
vals and involving different levels of maintenance schedules. The department works closely with all
requirements. other departments and field stations in carrying out
its responsibilities.
RPM see Revenue passenger mile.
Seasonal trends changes in an economic index that
Safety recommendation the final recommendation are caused by or related to changes in the seasons of
made by the NTSB following a major accident. Safety the year.
recommendations are made as soon as a problem is
identified, not necessarily upon completion of the Seat-mile one passenger seat transported one
investigation. statute mile. Used to report available passenger-
carrying capacity on an aircra ; however, when
Sales, aerospace sales net of returns, allowances, the seat is occupied by a revenue passenger, the
and discounts; the dollar value of shipments measurement unit is referred to as a revenue
less returns and allowances, including dealer’s passenger mile (RPM).
commission, if any, that have passed through the
sales account See also Aerospace sales. Seat-miles, available the aircra miles flown on
each flight stage multiplied by the number of seats
Sales-oriented period the airline marketing period available for revenue use on that stage. See also
following World War II when the air carriers’ capacity Available seat miles (ASMs).
increased and many companies began to take an
active role in convincing consumers to purchase the Sensitivity of schedule salability the highly
new services offered. It was referred to as a shotgun sensitive nature of even minor changes in scheduled
approach to marketing: convincing people to fly departure and arrival times. Schedule convenience
rather than drive or take the railroad. ranks high among the competitive elements affecting
the passenger’s choice of an airline; consequently,
Scheduled aircra miles the sum of the airport-to- even minor changes can affect salability.
airport distances of all flights scheduled, excluding
those operated only as extra sections to accommodate Short-term loan a loan negotiated for seasonal
traffic overflow. needs or for working capital and paid back within
one year.
Scheduled aircra miles completed the aircra
miles performed on scheduled flights, computed solely Show-cause order an order soliciting parties to
between those scheduled points actually served. present to the DOT reasons and considerations as to

GL OSSAR Y 545



why a particular DOT order relating to the fitness of income of the current accounting year.
a carrier should not be put into effect.
Specific commodity rate special air freight rate
Shu le service a relatively low-fare, no-frill established for unusually high-volume shipping of
service. The lower fare is based on the cost savings of certain products between certain cities.
high-density seating, no reservations, and no meal or
beverage service. This service is usually offered only in Speed package service small-package, fast-delivery
high-traffic markets and may also require passengers service, airport-to-airport, with certain carriers on
to carry their own baggage to the boarding gate. their system. Packages are accepted at the airport
passenger terminal, at the baggage check-in position,
Sidewalk check-in a service that enables customers or at the air freight office.
to check baggage outside the terminal entrance. This
allows ticketed passengers to proceed directly to the Spoils Conference a series of meetings held in
gate. Washington, D.C., in May 1930 between Postmaster
General Walter Folger Brown and the heads of the
SOC see System operations control. larger airlines with the purpose of establishing three
transcontinental trunk air mail routes. The spoils
Sovereignty of airspace the control or authority went to United Air Transport, Transcontinental and
of each nation over the airspace above its borders. Western Air Express, and American Airways.
The principle of sovereignty of each nation over the
air above its territories and territorial waters was SST see Aircra , supersonic transport.
affirmed at the Paris Convention of 1919.
Staff departments departments that assist the line
Space available a term applied to passengers who, departments in carrying out their responsibilities.
for lack of reservations or for reduced-rate charges, They fall under the following administrations:
must await the boarding of other passengers and will finance and property, information services, personnel,
not themselves be boarded unless there is additional community relations and publicity, economic
space available on the aircra . planning, legal, and medical.

Space vehicle an artificial body operating in outer Staffing the positions provided for by the
space (beyond the earth’s atmosphere). organizational structure.
Span of control the number of subordinates a man- Staff personnel those whose orders and authority
ager can effectively supervise. Sometimes called span do not flow in a straight line down from the top of
of management. the organization. Staff personnel report to a specific
person in the organization; however, they may at
Special air freight services services air carriers pro- times perform work for people at levels above or
vide shippers, such as assembly service (consolidating below them. O en referred to as non-volume-related
shipments), distribution service (distribution to people because their numbers are generally not
different customers), pickup and delivery service, and directly related to some volume such as flying hours
other specialized services, such as armed guards and or departures.
shipment of human remains and restricted articles.
Stage, flight see Flight stage.
Special funds funds not of a current nature and
restricted as to general availability. Includes items such Stage length, average see Overall flight stage
as sinking funds, pension funds under the control of length.
the air carrier, equipment purchase funds, and funds
segregated as part of a plan for self-insurance. Station plo ing chart a visual layout of the
schedule at a particular station. All flights are plo ed,
Special income credits and debits, net (special portraying sequence and schedule time of operation
items) extraordinary credits and debits that are of and utilizing certain standards and codes. The chart
sufficient magnitude that inclusion in the accounts shows the time an aircra requires to maneuver into
for a single year would materially distort the total a gate position, the scheduled arrival time, the period
operating revenues or total operating expenses. of time it is at the gate, its scheduled departure time,
and the length of time needed to clear the gate.
Special income tax credits and debits, net income
taxes applicable to special income credits or debits and Stockholder equity the aggregate book value of
other extraordinary income tax items not allocable to stock held by all stockholders in the company.

546 AIR TRANSPOR T A TION



STOL an aircra capable of taking off and landing Traffic Conference ticket, which is composed of an
in a short distance. auditor’s coupon, agent’s coupon, flight coupons, and
passenger’s coupon. It authorizes carriage between
Subsidy see Public service revenues (subsidy). the points and via the routing indicated and also
shows the passenger’s name, class of service, carriers,
Supersonic transport (SST) see Aircra , supersonic flight numbers, date of travel, and all conditions of
transport (SST). the contract of carriage.
Supplemental air carrier a former class of air Time-series analysis the oldest, and in many cases
carrier holding a certificate of public convenience and still the most widely used, method of forecasting air
necessity issued by the CAB, authorizing it to perform transportation demand. O en referred to as trend
passenger and cargo charter services supplementing extension, it consists of interpreting the historical
the scheduled service of the certificated route sequence and applying the interpretation to the
air carriers. Supplemental air carriers were o en immediate future. Historical data are plo ed on a
referred to as nonskeds (nonscheduled carriers). The graph, and a trend line is established. Frequently, a
remaining former supplemental carriers are now straight line is extended into the future.
classified as national or as large or medium regional
air carriers. Time zone effect an important factor affecting
schedule development: the fact that we gain three
Surplus, capital an increase in an owner’s equity hours on the clock going westbound coast to coast
not generated through the company’s earnings. but lose three hours coming eastbound has a major
impact on scheduling a jet fleet.
Surplus, earned an archaic term for retained
earnings. Ton a short ton (2,000 pounds).
System constraints the constraining factors that Ton-mile one short ton transported one statute
a carrier must take into consideration in the fleet- mile. Ton-miles are computed by summing the
planning process. External constraints might include aircra miles flown on each interairport flight stage
facility requirements, including runway, gate, and multiplied by the number of tons carried on the flight
terminal capacity. Internal constraints might include stage.
lack of funds and maintenance and crew-training
facilities. Total general services and administration
expenses passenger service, aircra and traffic
System operations control (SOC) a central servicing, promotion and sales, and general and
operations department that dispatches and administrative expenses.
coordinates all aircra movements systemwide.
Total number of employees the number of full-
Tariff the notice of fares and rates applicable to and part-time employees, both permanent and
the transportation of persons or property, and the temporary, during the pay period ending nearest
rules relating to or affecting such fares and rates of to December-15. Air carriers with more than one
transportation. Effective January-1, 1983, the CAB no operation (domestic or international and territorial)
longer approved tariff filings by the carriers. generally do not report a breakdown of total
employees corresponding to these operations; thus,
Taxable income for federal income tax purposes, employee counts do not provide a reliable basis for
the amount of income, less exemptions, on which measuring average productivity per employee in
income tax is determined. such separate operations.

Tax write-off an investment loss that can be offset Tour, inclusive a round-trip tour that combines
against gross income when determining adjusted air transportation and land services and that
gross income. meets additional requirements of minimum days
of accommodations and other land services to be
Thrust the driving force exerted by an engine, included in the price of the tour.
particularly an aircra or missile engine, in propelling
the vehicle to which it is a ached. Tour package a joint service that gives a traveler a
significantly lower price for a combination of services
Ticket a printed document that serves as evidence than could be obtained if each were purchased
of payment of the fare for air transportation. separately. Thus, the total price of a package tour
Generally, this takes the form of the standard Air might include a round-trip plane ticket, hotel

GL OSSAR Y 547



accommodations, meals, several sight-seeing bus so-called grandfather clause of the Civil Aeronautics
tours, and theater tickets. Act of 1938 and whose primary operations were
in domestic scheduled passenger service between
Trade balance the difference between the value of medium and large hubs. These carriers are now
U.S. goods exported to other countries and foreign classified as major air carriers.
goods imported into this country. The trade balance is
generally regarded as favorable when exports exceed Turbine (turbo) a mechanical device or engine that
imports—a trade surplus—and unfavorable when spins in reaction to a fluid flow that passes through
imports exceed exports—a trade deficit. or over it.

Traffic, air the passengers and cargo (freight, Turbine-powered aircra see Aircra , turbine.
express, and mail) transported on any aircra
movement. Turbofan planes see Aircra , turbofan (fan jet).

Traffic density the total amount or units of traffic Turbojet planes see Aircra , turbojet.
traveling or carried between two points, over a route,
over a route segment, or on a flight. Turboprop planes see Aircra , turbo-propeller
(turboprop, prop jet).
Traffic flow passengers making connecting flights at
each station that allows for adequate load factors over Twelve-five rule refers to the standard (12,500
an entire route structure with intermediate stops. pounds) that the CAB set in 1938 to distinguish
between large and small aircra . Those carriers
Transport-related expenses expenses from services operating small aircra were deemed air taxis and
related to air transportation, such as in-flight sales of thus exempted from certification requirements under
liquor, food, and other items; ground, restaurant, and Section 401 of the Civil Aeronautics Act.
food services; rental expenses as lessor; interchange
sales; general service sales; mutual aid; substitute Two Freedoms Agreement the International Air
service; and air cargo service (other than actual air Services Transit Agreement that arose out of the
movement). Chicago Conference of 1944 proposing that each
contracting state grant to the other contracting states
Transport-related revenues revenues from the following freedoms of the air with respect to
transportation by air of all classes of traffic in scheduled international air services: (1) the privilege
scheduled and nonscheduled service, including of flying across its territory without landing, and (2)
charters. the privilege of landing for nontraffic purposes.

Treasury stock the cost of capital stock issued by Two-tier wage structure a wage scale in which
the air carrier that has been reacquired by it and not newly hired workers are paid considerably less than
retired or canceled. current workers for similar jobs.

Trend a direction of movement, as shown in a trend Type certificate a certificate indicating that a new
line. aircra prototype has passed an extensive series of
FAA ground and flight tests and meets FAA standards
Trend extension see Time-series analysis. of construction and performance.
Trip in common usage, the term trip includes both Uncontrollable variables certain marketing
the going and returning portions of a journey. In conditions over which the company exercises li le or no
airline usage, it is important to distinguish between control but which they must recognize and respond to.
trip used in a one-way and a round-trip sense. These include (1) cultural and social differences, (2) the
Published statistics on average length of air trips political and regulatory environment, (3) the economic
almost always use one-way distances, because it is environment, (4) the existing competitive structure, and
virtually impossible to determine from reported data (5) resources and objectives of the company.
what the round-trip distance is. Fares, on the other
hand, are sometimes quoted as one-way prices and at Unfair competition the use of competitive methods
other times as round-trip prices, and the round-trip that have been declared unfair by statute or by an
price is not always equal to twice the one-way price. administrative agency.

Trunk carriers a former class of certificated route Unicom frequencies authorized for aeronautical
air carriers receiving original certification under the advisory services to private aircra . Only one

548 AIR TRANSPOR T A TION



such station is authorized at any landing area. The Utilization the average daily use of aircra for a
frequency 123.0 mHz is used at airports served by period of time, usually monthly or yearly. Obtained
an airport traffic control tower or a flight service by dividing the total hours flown by the number of
station, and 122.8 mHz is used for other landing aircra and then dividing the result by the number of
areas. Services available are advisory in nature, days for the time period.
primarily concerning the airport services and airport
utilization. Variable costs those costs that increase or decrease
with the level of output or available seat-miles that
Uniform system of accounts and reports a an airline produces.
standardized system of financial and traffic reports
that the certificated air carriers must submit during Venture capital money invested in business
the year to the DOT. enterprises that generally do not have access to
conventional sources of capital. Venture capitalists
Unity of objectives the idea that each administration, are particularly interested in situations that will
department, division, section, group, and unit of a ultimately produce sizable capital gains.
company must contribute to the accomplishment of
the overall goals of the firm. This is one of the basic Very Large Aircra (VLA) term used for the new
principles of organization planning. generation of large wide-body aircra .
Universal Air Travel Plan begun in 1936, one of VFR see Visual flight rules.
the world’s oldest credit cards. The UATP’s Air Travel
card today is good for transportation on practically Visual flight rules (VFR) rules specified by a
all of the world’s scheduled airlines. Participating qualified authority establishing minimum flying
airlines now number more than 200. The contracting altitudes and limits of visibility to govern visual
airline bills the subscriber on a monthly basis for all flight.
air transportation used, regardless of the number of
airlines involved. VLA see Very Large Aircra .
Unused (dormant) authority a certificate issued to Volume-related personnel see Line personnel.
the first carrier that qualifies when an air carrier that
is authorized to provide round-trip service nonstop V/STOL an aircra capable of taking off and
each way between two points fails to provide at landing vertically or in a short distance.
least a minimum of service, as prescribed by the
Airline Deregulation Act of 1978. Unused authority VTOL an aircra capable of taking off and landing
may also be issued to an air carrier between points vertically.
where service is being provided if the service is being
provided by no more than one other carrier. Weight, allowable gross the maximum gross
weight (of the aircra and its contents) that an aircra
U.S.-flag carrier (American-flag carrier) one of is licensed to carry into the air on each flight stage.
a class of U.S. air carriers holding certificates of
public convenience and necessity or other economic Weight, maximum certificated takeoff the
authority issued by the former CAB or the DOT maximum takeoff weight authorized by the terms of
and approved by the president authorizing air the aircra airworthiness certificate. This is found in
transportation between the United States and/or its the airplane operating record or in the airplane flight
territories and one or more foreign countries. manual, which is incorporated by regulation into the
airworthiness certificate.
U.S. mail revenues revenues from the transportation
by air of U.S. mail at service mail rates established Weight, maximum gross takeoff the maximum
by the U.S. Postal Service. Includes priority and permissible weight of an aircra and its contents at
nonpriority mail revenues. takeoff. Includes the empty weight of the aircra ,
accessories, fuel, crew, and payload.
Utility aircra an aircra designed for general-
purpose work. Working capital investable funds that are not
currently tied up in long-term assets; current assets
Utility Airplane Council formerly under the AIA; minus current liabilities. The excess of current assets
the forerunner to the GAMA. over current liabilities, or those funds used to finance
day-to-day operations.

GL OSSAR Y 549



Work stoppage an incident of labor–management
strife arising from disputes over wages, benefits,
hours, rules, or conditions of work, as well as from
jurisdictional problems of cra representation of
airline employees; a strike or lockout. Such incidents
may not affect normally scheduled services.
Yield the air transport revenue per unit of traffic
carried in air transportation. May be calculated and
presented several ways, such as passenger revenue
per passenger mile, per aircra mile, per passenger
ton-mile, or per passenger.

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INDEX








ABC Air Cargo Guide 163 general aviation 19-20, Table 1-3 air cargo 264-65, 319-39
ABC World Airways Guide 163 government market 10-12, Table 2004 statistics Table 6-1
ACARS (ARINC communications 1-2 advantages 330
addressing and reporting impact on other industries 5 aircra 326, 328-29
system) 102 industry suppliers 9-10 air freight market 329-31
accidents related products and services 20 air freight rate types 331-33
Army planes 36 research and development (R & costs 330-31
general aviation 139 D) 5, 7-8, factors affecting rates 337-39
history 38, 40, 41, 42 11, 13 future 328-29
investigation 94-95, 98-100, 190 sales by customer Table 1-2 history 321-25
accrual 430 sales by product group Table 1-1 pallet and container 264-65
A-check 229, 230, Table 12-1 trade balance 5, 8, 20 regional/commuter services 158,
acquisition costs 391 Aerospatiale 117 Table 5-4b
Adam Aircra Table 4-5 African American travel market special services 333, 335-37
administration, defined 202-3 273-74 statistics Table 11-1
Advanced General Aviation Trans- agricultural aircra 112, 122 today 325, Table 11-11
portation Experiment Airborne Express 324, 325 web sites 340
(AGATE) 128 Airbus A300 series 14, 42, 383, 391 Air Cargo Guide 337
advance purchase requirements Airbus A310 391 Air Cargo, Inc. 101-2, 336
301 Airbus A320 265 air carrier, defined 21
advertising 123, 266, 267, 280, 302 and Braniff shutdown 445 air carrier airports 125
advertising department 234 cockpit 386 air commerce 21, 48-49, 52
Advisory Circulars 92 competition 383 Air Commerce Act (1926) 33, 48-
aerial advertising 123 financing for Northwest Air- 50, 67, 87
aerial application 112, 122-23, lines 380 Air Corps, U.S. Army 36, 39, 48,
Table 4-3 fleet commonality 378 50, 68, 321
aerial observation 123, Table 4-3 fly-by-wire systems 65 aircra
“aerial other” category 123, Table operating costs 391 design and development 382-87
4-3 technical aspects 376 evaluation 389-92
Aeritalia 66 Airbus A321 378 insurance costs 305
Aero Design and Engineering 69 Airbus A330/340 65, 375, 378, 383, landing facilities 125, Table 4-4
aeromedical research 93, 94 385-86 manufacturing associations 103-
Aeronautical Radio, Inc. (ARINC) Airbus A350 15, 66, 91, 378 4
102-3, 163 Airbus A380 14, 66, 91, 329 on order Table 13-1
Aeronautics Branch, Department Airbus Industrie regional air carriers 158, Table
of Commerce 49 aircra on order Table 13-1 5-4a, Table 5-4b
Aerospace Industries Association business jets 117 Aircra Owners and Pilots As-
(AIA) 4, 103-4, 112 business turbine airplane ship- sociation (AOPA) 105, 122
aerospace industry 4-20 ments Table 4-6 “GA Team 2000” 128
characteristics 5-6 commercial transport products as lobby group 70
civilian aviation market 12-15, 14, 15 optimism of members 117
Table 1-3 competition 13, 66 purpose 68
commercial transport sales fac- design and development 383, aircra uses 119-25
tors 15-19 385-86 business aviation 119, 121, Table
consolidation 11, 13 financing for airlines 380 4-3
defined 4 and new-generation airliners 63 commercial and industrial avia-
economic profile 7-9 Air Cal 182 tion 122-24
employment 5, 7-8, 10-11 Air California 61
551

552 AIR TRANSPOR T A TION


external load and medical 124, flight a endants 237-39 usage figures Table 2-4
Table 4-3 flight operations 223-27, Fig. air route traffic control centers
instructional flying 122, Table 7-11 (ARTCCs) 127
4-3 marketing and services 234-37, Air Safety Board 51, 52
other flying 124-25 Fig. 7-13 air taxi 124, 154-55, Table 4-3
personal flying 121-22, Table 4-3 management 202-6 see also regional air carriers
air express 321, 322 new corporate structure 206-9 air tours 124, Table 4-3
Air Florida 62, 177, 412 organization 213-16 air traffic control (ATC)
airframe overhaul 231-33 organizational chart 216-17, Fig. automation 93-94
Air France 42, 325, 326 7-4 hub-and-spoke system 368
air freight 323-24 staff departments 218-22 introduction 38, 42
defined 321 organizational charts Figs. 7-4 military 40
interline agreements 164 to 7-11 role 225, 226
rate factors 337-39 web sites 241 and scheduling 350
rate types 331-33 Air Line Pilots Association Air Traffic Control Center 225
scheduling 345 (ALPA) 401, 402, 415, 417, 421 “air traffic liability” 452
air freight forwarders 323 airlines air traffic and safety, vice-presi-
Air Freight Procedures Agreement accounting and guidance 162 dent of 223
164 associations 100-101 AirTran Table 5-2
air/ground domestic service certification 158, 160-61 air transport, civilian aviation
(ARINC) 102 costs 304-9 market 13-15, Table 1-3
air/ground international service globalization 483 Air Transport Association of
(ARINC) 102 pyramid of authority 202, 208, America(ATA) 100
Airline Clearing House 101 Fig. 7-1 air freight market data 329
Airline Deregulation Act (1978) safety 47, 168 annual reports 158, 437, 440, 441
58-60 statistics 158 capital requirements forecast
and CAB 150-51 wages and fringe benefits 409, 186
competition 177 Table 14-3, Table 14-4 causal model forecasts 247
dormant authority 366 Airlines Reporting Corporation identification codes 163
international counterpart 476 268 interline agreements 164
and labor productivity 406 Airline Tariff Publishing Company nationalization opposed 39
mergers and acquisitions 182 (ATPCO) 101, 298, 301 air transportation
mutual aid agreements 408 air mail defined 21
passage 43, 56, 57, 168 compensation 54, 285, 407 future trends 18-19
pricing 185 history 321-22 air transportation industry 21-26,
wage formula and hour rules legislation 35, 36, 37, 50, 51, 407 46-47, Table 1-4
407 Post Office Department 31-32, and business 25
see also deregulation; regula- 48, 321-22 and economy 22-25
tion of airlines Air Mail Act (1930) 35, 50 and pleasure travel 25-26
airline designators 163 Air Mail Act (1934) 36, 37, 50, 51, Air Transportation Safety and Sys-
airline industry 147-72 407 tem Stabilization Act (2001) 171
airline certification 158, 160-61 Airport and Airway Improvement Air Transport Command 47
airline statistics 158 Act(1982) 186 Air Transport International 325
data collection by DOT 162 Airport and Airways Develop- Air Transport and Its Regulators
industry agreements 163-64 ment Act(1970) 70, 92, 114, 186 (Caves) 55
major and national carriers 151- Airport Development Aid Air Transport World 158
54 Program(ADAP) 92 Airways Modernization Board 54
regional air carriers 154-58, airports Air Wisconsin 62
Table 5-3 air cargo 327 airworthiness certificate 91
statistics Table 6-1 alliances 483-84 Airworthiness Directives (ADs)
structure 148-51, 153-54, Fig. 5-1 alternative 178 229, 231
traffic and financial statistics charges 304-5 Alaska Airlines Table 5-2
165-72, Table 5-5 fleet planning 390 all cargo aircra , regional air
web sites 173 operating certificates 92 services Table 5-4b
airline management and organiza- operating costs 92 all-cargo airline 325, 327, 337
tion 201-39 private-use 125, Table 4-4 all-cargo certificate 161
functions of management 210- public-use privately owned all-cargo deregulation 57
13 Table 4-4 Allegheny Airlines
line departments 223-39 public-use publicly owned 125 commuter network 155
engineering and maintenance schedule salability 356, Fig. 12- early history 40, 149
227-33, Fig. 7-12 8, Fig. 12-9

INDEX 553


mergers and acquisitions 61, fare structure 185 BAE Systems PLC 385
182 financial condition 447, 448 baggage 238, 265, 368
revenue passenger miles Table labor relations 421, 422 balance sheet 437, 446
5-1 mergers and acquisitions 171 Bangor Punta Corporation 71, 72,
Allegheny Commuter 155 revenue passenger miles Table 116
Allegis Corporation 418 5-2 Bankruptcy Code 417
Allied Pilots Association (APA) amortization 305-6, 379, Table 15-5 banks, commercial 431-32, 449
422 analysis, and forecasting 245 barnstormers 67
Allison GMA 3007C engine 72 Anti-Hijacking Act (1974) 93 barriers to entry 176, 178-79
allowable time, for maintenance antitrust immunity 59, 182, 482 basic fares 297
346 AOPA Air Safety Foundation 105 B-check 229, 230, Table 12-1
alternative minimum tax 379 AOPA Foundation, Inc. 105 Beech, Walter 67
Amadeus reservation system 274 Apache Airlines 155 Beech Aircra Corporation 71
amateur-built aircra 113 Approach Control 226 history 67, 69, 72
American Airlines Arab oil embargo 56, 150, 167-68 mergers and acquisitions 19,
air express 322 arbitration, voluntary 404 116
air freighters 323 ARC (company) 69 product liability 114
air taxi replacement agreement Argyrus, Chris 202 Beech aircra
155 Army Air Corps 36, 39, 48, 50, 68, Baron 70, 72
Boeing 707 service between 321 Beechjet-400A 72
coasts 42 ASMs see available seat-miles Beechjet 73
and Boeing 380 assembly service 333, 335, Fig. 11-4 Bonanza 19, 67, 69, 72, 121
certificated domestic route asset-based financing 431 D-18 73
miles Table 2-1 assets 437, Table 15-2 E-18 73
collective bargaining 422 associations 100-108 King Air 90 114
Douglas DC-1 and DC-3 37 aircra -manufacturing 103-4 King Air 70, 72, 73
early history 36 airline-related 100-101 Model 17 67
fares 150, 185, 300 general aviation 104-6 Model 18 Twin 67
financial condition 309, 447, 448 international aviation 106-8 Queen Air 70
fleet planning 396-99 other airline associations 101-3 Sierra 114
flight a endants’ strike 405 ATA see Air Transport Association Sundowner 114
frequent-flier program 276 of America Super-18 69
labor costs 414, 416, 420 athletic travel market 273 Travel Air 70
labor relations 421 Atlantic Southeast 61 Twin-Bonanza 69
leasing 435 Atlas Air 325 Belgium 476, 478
li capacity 375 Atlas Air Worldwide Holdings 325 Bellanca Aircra 69, 70, 72, Table
maintenance costs 374 ATR (company) 63 4-5
mergers and acquisitions 61, Autoland system 390 Bell Helicopter 20, 71
149, 182, 419 available seat-miles (ASMs) Bell Telephone Laboratories 41
ordering agreement with Boe- 2004 statistics Table 6-1 Bendix (company) 69
ing 18 and costs 308, 310, Table 10-4, Bendix Transcontinental Speed
postderegulation 206 Fig. 10-10 Dash 67
predecessors 33, 35 early 1960s 165 Benoist flying boat 31
pricing 299 late 1960s 167 Bermuda Agreement (1946) 471-
profits 445 statistics Table 5-5 72, 475
revenue passenger miles Table Avco (Aviation Corporation) 35, Bermuda II Agreement 475-76
5-1, Table 5-2 36 best fit, line of 252, Fig. 8-3
September 11, 2001 hijackings Avcra Table 4-6 bilateral agreements 467, 470
66 average, moving 251, 252 Bingham-Parker Act (1926) 33,
two-tier wage scales 416, 420 average revenue 309 48-50, 67, 87
viability 418, 419 averaging down wages 422 Black, Hugo 36
American Champion 72, Table 4-5 Aviat Aircra Table 4-5 black boxes 99
American Eagle 63, 157, 420, 422 Aviation Distributors and Manu- Black-McKellar Act (1934) 36, 37,
American Express Sky Guide 163 facturers Association (ADMA) 104 50, 51, 407
American General Tiger 72 aviation service industry 129-36 block speed 304, Fig. 13-1
American Red Cross 124 see also fixed-base operators BOAC 40
American Trans Air 422, Table 5-2 Aviation and Transportation Secu- board of directors 203
America West 182 rity Act (2001) 95 Boeing
bankruptcy 62, 170, 419, 445, aircra on order Table 13-1
448, 449 B-29 Superfortress 40 and American Airlines 380
employee concessions 420 BAC One Eleven 385

554 AIR TRANSPOR T A TION


business turbine airplane ship- Boeing 747-800 386 built-in test equipment (BITE) 230
ments Table 4-6 Boeing 757 Bureau of Air Commerce 38, 49,
commercial transport products business transportation 137 51, 87
13-14, 15 design and development 63, Bureau of Air Mall 50, 51
competition 66 65, 382-83 Bureau of Standards, Department
and Delta Airlines 380 fleet commonality 378 of Commerce 49
design and development 382-83 fuel efficiency 382, 391 Bureau of Transportation Statistics
mergers and acquisitions 11, 13, maintenance routing 348, Fig. (BTS)106 162
66 12-3 Burlington Air Express 324, 325,
ordering agreements 18 operating costs 391 327
parts tracking and handling 18 as replacement for 727 381 Bush, George H. W. 405
as supplier 9 Boeing 767 Bush, George W. 95
and United airlines 380 American Airlines 397 business aircra Table 4-3
Boeing aircra design and development 63, advantages 119, 121
Boeing 247 36-37 65 benefits 139-40
Boeing 307 41 fleet commonality 378 reasons for use 137-39
Boeing 377 Stratocruiser 40, 41 hub-and-spoke system 375 types 137
Boeing 707 operating costs 391 business aircra use, defined 119
air freight 324 Boeing 767-200 65 business aviation 21, 73, 119, 121,
design and development 41 Boeing 777 136-40, Table 4-3
maintenance costs 374 certification 91 business-class service 264, 277
Pan American 61 design and development 11, business-fare sales 300
performance 42 15, 65, 66 business travelers 272-73
Boeing 720 186 orders 378, 380, 385
Boeing 727 Boeing 787 Dreamliner 15, 66, C-47 airplane 39, 73, 149
air freight 324 91, 378, 385 C-54 airplane 39, 149
American Airlines 397 Boeing B-40 33 C-82 airplane 39
design and development 43 Boeing B-47 jet bomber 41 CAB see Civil Aeronautics Board
fuel efficiency 391 number built 65 cabotage 478, 480, 481, Fig. 16-1
maintenance and operating Boeing Airplane Company 33, 36 CAM (contract air mail) routes 33,
costs 380 Boeing Air Transport Company Fig. 2-1
number built 65 33, 322 Campbell-Hill Aviation Group 23
operating costs 391 Boeing Business Jets 117 Canada 480
performance 42 Bombardier 72, Table 4-6 “canned” flight plans 126
refinancing cycle 186 Bombardier Canadair CRJ series capacity 17
replacement 381 378 Capital Airlines 41, 182, 412
transfer to FedEx 381 Bombardier Flexjet 117 capital appreciation 430
Boeing 727-100 413 Bonanza Air Lines 40, 149, 182 captain 225, 226, 227
Boeing 737 bonds 433 Caravelle 385
American Airlines 397 Boyd, Alan S. 81 cargo see air cargo
business transportation 137 Braniff, Paul 37 Carlyle Group 11
design and development 43, Braniff, Tom 37 Carter, Jimmy 56, 475
65 Braniff Airlines CASA (company) 66
fleet commonality 378 bankruptcy 151, 153, 182, 206, cash budget 452-53
fuselage peeling incident 380 415 cash flow 431, 451-52
li capacity 375 demise 60-61, 445, 477 Cathay Pacific Airways 325
Boeing 737-200 413 founding 37 causal (model) forecasts 246-48,
Boeing 747 mergers and acquisitions 182 Fig. 8-1
air cargo 324 revenue passenger miles Table accuracy 253
business-class service 277 5-1 Caves, Richard E. 55
design and development 42 union concessions 415 C-check 230, Table 12-1
environmental aspects 93 Branson, Sir Richard 423 centralized reservations office 267
fuel efficiency 19 Breech, Ernest P. 38 certificated (common) air carriers
management system 390 Brenner, Melvin 189 21, 43, 148, Table 2-1, Table 5-5
Pan American 61 Brequet-Sud 42 certification
parts 229 Britain see United Kingdom airlines 158, 160-61
performance 43 British Aerospace 11, 63, 385 by FAA 91-92
Boeing 747-100 386 Bri Airways 61 management requirements 207
Boeing 747-200 386, 390 Bri en-Norman aircra Table 4-5 Cessna, Clyde 67, 68
Boeing 747-300 65, 386, 389-90 Brown, Walter Folger 35, 36 Cessna Aircra Company 11, 19,
Boeing 747-400 65, 380, 386 B scales see two-tier wage scales 69, 71, 72

INDEX 555


acquired by General Dynamics and Civil Aeronautics Authority civilian aviation market 12-15,
116 39, 87 Table 1-4
acquired by Textron 116 interstate airline industry 148 Civil Reserve Air Fleet (CRAF) 44,
aircra shipments Table 4-5 national defense 44 47-48
business turbine airplane ship- wage formula 407 Class 1 stations 228
ments Table 4-6 Civil Aeronautics Administration Class 2 stations 228
General Aviation Revitalization 52, 87 Class 3 stations 228
Act(1994) 117 Civil Aeronautics Authority classes of service 271
judgmental forecasts 253 conference on jet age 41 classes of stations 227-28
product liability 114 establishment 39, 51, 87 Clayton Antitrust Act test 182
Cessna aircra flight personnel certification Clinton, Bill 170, 405, 420, 479
120/140 series 68 40-41 coach fares 286
150 model 114 redesignation as Civil Aeronau- Coast Guard Auxiliary 86
152 model 71, 114 tics Board 52 cockpit voice recorders (CVRs) 99
170 model 69 Civil Aeronautics Board code sharing
172 model 69, 70, 71, 114, 121 criticized 150 changes in 177
180 model 69 regulation of airlines 150 international 481-82, 483
182 model 70, 71 Civil Aeronautics Board (CAB) as marketing strategy 277-78
190/195 series 68, 69 air freight 323, 324 regional air carriers 62-63, 157
206H Stationair 118 air transportation certificates 21 collateral 431-32
207 model 19 bilevel industry vision 149 collective bargaining 412
310 model 69 Bureau of Safety 98 criticized 405-6
Ag Husky 122 carrier reporting requirements future strategies 421-23
Ag Truck 122 162 process 403-5
Bravo 118 certification 53 Collins (company) 69
C-34 68 charters 473-74 collision avoidance systems 94
Caravan 71 creation 52, 87 Colonial Airlines 33, 182, 322, Fig.
Citation 71-72, 117 criticism of 55-56 2-1
Excel 118 demise 60, 151, 169 Columbia Aircra Table 4-5
T-50 68 and deregulation 55-56, 57, 58, Columbia route 33
T206H Turbo Stationair 118 59-60, 150-51, 475 Columbia (space shu le) 12
CFM 56-5C-1 engine 385 early 1970s 167 Comair 61, 157, 421
CFM International engine 385 economic functions 52-54, 80 combination carrier 325, 327, 337
chain reaction effect 361-62, Fig. “failing carrier” doctrine 374 combined airline ticket offices
12-13 fares 53, 185, 285, 286-87, 413, (CATOs) 267
Challenger (space shu le) 12 472 Comité International Technique
change of gauge 472 Federal Aviation Act (1958) 54- d’Experts Juridiques Aeriens
change in quantity demanded 55 (CITEJA) 463
291-92 feeder lines 40 Commander 114 B 72
changes in demand 289-92, Fig. international aviation 467 Commander Aircra Table 4-5
10-2 interstate airline industry 148 Commerce Department see De-
charter airlines 263 and investment risks 446 partment of Commerce
charters 473-74 joint capacity-restraint agree- commercial banks 431-32, 449
Chase Econometrics 247 ments 474 commercial and industrial avia-
Chennault, Claire Lee 324 labor productivity 406 tion 21, 122-24
Chicago Conference (1944) 464-70, load factor 191 commercial transport sales factors
479 management skills needed by 15-19
Chicago and Southern Air Lines carriers 206 commission overrides 275-76
182 mergers and acquisitions 181, Commission to Ensure a Strong,
Chicago standard form 467, 470, 182 Competitive Airline Industry 479
471 mutual aid agreements 408 commi ee system, scheduling 346
Cirrus Design 117, Table 4-5 and national defense 44 common fares 297, Fig. 10-7
Cirrus Design SR 20 118 regional air carriers 154-55 common shareholders 433
Citicorp Venture Capital 436 response to deteriorating finan- common stock 433
Citizen and Immigration Service cial conditions 150 communication 215
190 route regulation 53, 366 commuter air carrier fitness deter-
city ticket offices (CTOs) 267 study on regulatory reform 56 minations 161
Civil Aeromedical Institute 93 Civil Air Patrol 39 Commuter Airline Association of
Civil Aeronautics Act (1938) 51-52 Civil Aviation Security Program America 100-101
aviation classifications 21 93 competition
and air freight rates 339

556 AIR TRANSPOR T A TION


and airline alliances 483 Coolidge, Calvin 33 fare structure 185
and elasticity 295 corporate aircra use, defined 119 financial condition 447, 448
maintaining 183-84 corporate aviation 74-75, Table 4-3 hub-and-spoke system 279
major and national carriers 151 corporate clients, of travel agents image 290
manufacturers 66 275 labor costs 414
in oligopolistic industry 176 corporate communications depart- labor relations 419, 420, 421, 422
post deregulation 177 ment 220, Fig. 7-9 mergers and acquisitions 61-62,
scheduling frequency 188 corporate objectives, and fleet 151, 182, 374
see also deregulation planning 388 ordering agreement with Boe-
computerized reservation systems correlation 246 ing 18, 380
code sharing 277-78, 482 cost-cu ing trends 309 postderegulation 206
economies of scale 180 costs, short run 310, Table 10-4 profits 445, 447
hub-and-spoke system 279 Council of Defense and Space In- revenue passenger miles Table
importance of 418 dustry Associations (CODSIA) 104 5-1, Table 5-2
as marketing strategy 274-75 cra unions 400 travel agent commissions 268
purposes 151-52 Crandall, Robert 405, 420 viability 418, 419
travel agents 275 Crane, Carl J. 38 Delta Connection 157
Concorde 385 credit, line of 431 Delta Shu le 62
congestion delay 368 credit cards, airline industry 164, demand 266
connect market sales 300 285 defined 288
Conrad, Max 121 cross-connections (hub and spoke) determinants 289, 290
consolidation 60-62, 116, 181-84, 365, Fig. 12-14 law of 288, Fig. 10-1
376-78, 418-21 CRS see computerized reservation and pricing 288-95, Fig. 10-1
constrained operating plan 389 systems demographic segmentation 273
consumables 230 current ratio 446, 451 denied boardings 304
consumer-oriented marketing current resources, and fleet plan- Denver Mile-High Air Race 67
concept 269-74 ning 387, Table 13-2 department, defined 203
consumer-oriented period 259 Curtis JN-4 (“Jenny”) 67 departmentalization 214
container rate 332-33, Fig. 11-2, Curtiss, Glenn 321 Department of Agriculture 32, 49
Fig. 11-3 Curtiss Condor 36 Department of Commerce
Continental Airline Holdings 61 Curtiss-Wright Corporation 67 administrator of aviation 52
Continental Airlines Customs Service 190 Aeronautics Branch 87
bankruptcy 170, 417, 419, 445, Cu ing, Bronson 38 Air Commerce Act (1926) 48, 49-
448, 449 cyclical variations 17-18, 46, 249, 50
competition 418 250-51, Fig. 8-2 airline regulation 190
fare structure 185 Bureau of Air Commerce 38, 49,
financial condition 447, 448 Dassault Table 4-6 51, 87
labor costs 414 Dassault Falcon jet 118 Bureau of Standards 49
labor relations 421, 422 Dassault Model-20 Falcon 73 Department of Defense (DOD) 7,
mergers and acquisitions 60, 61, Data Resources, Inc. 247 10, 11, 47-48, Table 1-2
149, 153, 182 D-check 230, 231, Table 12-1 Department of Homeland Security
online ticket sales 181 debenture 440-41 95
ordering agreement with Boe- debt financing 430 Department of Justice 60, 190, 409
ing 18 Decision 83,National Labor Rela- Department of State 94, 389, 467,
postderegulation 206 tions Board 406 470
reduced labor costs 416 decision making 205-6 Department of Transportation Act
revenue passenger miles Table defense contractors 10-12 (1966) 55, 95
5-1, Table 5-2 see also Department of Defense Department of Transportation
strikes against 153 deferred taxes 429 (DOT)
Continental Express 63, 157 defined service life 398 airline certification 158, 160-61
Contract Air Mail Act (1925) 33, 48 deHavilland 42 airline regulation 190
contract air mail (CAM) routes 33, deHavilland Comet 40 antitrust immunity 482
Fig. 2-1 deHavilland DH-125 73 Bureau of Transportation Statis-
contract mail service 33-35, Fig. 2-1 dehubbing 280 tics (BTS) 87, 162
contract maintenance 233 delegation of authority 214 creation 55, 80
control, and forecasting 245-46 Delta Air Lines data collection 162
controlling 212-13 bankruptcy 171, 309, 449 deregulation 60, 150-51
Convair twin-engine planes 40 certificated domestic route divisions 81-87
Convention on International Civil miles Table 2-1 Documentary Services Division
Aviation 107 delegation of authority 214 (DSD) 160-61
convertible debentures 441 early history 38 essential air service 59

INDEX 557


hazardous material specifica- disposable personal income (DI) web sites 197
tions 337 247, 248 economic planning department
international aviation 470 distance, and elasticity 295 220, Fig. 7-10
maintenance cost reporting 305 distribution service 335 economies of scale 176, 179-81,
mergers and acquisitions 183 dividend income 430 274, 375
on-time performance reporting division, defined 203 economies of scope 274, 375
275 Dooli le, James H. 35 economy-class service 264
organization 81, Fig. 3-1 dormant authority 366 educational travel 270
policy 479-80 Dornier 63 Eisenhower, Dwight D. 42, 54, 84
Research and Special Programs DOT see Department of Transpor- elastic demand 292-94, Fig. 10-3,
Administration (RSPA) 86- tation Fig. 10-4
87 Douglas, A. Stone 72 elasticity of demand 292-96
scheduling tools 369 Douglas, Donald 37 elasticity determinants 295
Transportation Security Admin- Douglas DC-1 36, 37 electronic components 10
istration 95 Douglas DC-2 37 electronic flight instrumentation
Departure Control 225 Douglas DC-3 (EFIS) 65
dependant variables 247 business aviation 73 Embraer (company) 63, 66, Table
depreciation 305-6, 379, 429, 451, design and development 37, 43 4-6
Table 15-5 impact 322 Embraer EMB-135 378
deregulation 55-57 military conversion 39 Embraer EMB-145 378
airline financing 428 as nonscheduled air carriers 149 emergency board 404
airline management 206 popularity 42 Emery Worldwide 324, 325, 327
all-cargo 57 transcontinental travel time 356 Empire Airlines 61
Civil Aeronautics Board 55-56, Douglas DC-4 39, 149 employee ownership 420, 423
57, 58, 59-60, 150-51, 475 Douglas DC-4E 39 employee stock ownership plans
Department of Transportation Douglas DC-6 40, 150 (ESOPs) 417, 420, 423
60, 150-51 Douglas DC-7 40, 41, 232 employment
financial impact 446, 449, 450 DRI-WEFA Incorporated 23 aerospace industry 5, 7-8, 10-11
fleet planning 375 duty free service 265 airline 400, Table 14-1
general aviation 73 air transport industry 43
labor relations 412-23 Eastern Airlines employment contracts 350-51
marketing strategies 274-80 air express 322 “end-to-end” mergers 182-83
mergers 60-62 bankruptcy 151, 170 engineering and maintenance
new-generation airliners 63-66 Boeing 727 42 control (EMAC) system 232
passenger marketing 274-80 certificated domestic route engineering and maintenance
regional/commuter airlines 62- miles Table 2-1 department 227-33
63 collective bargaining 418 classes of stations 227-28
routing and scheduling 366 demise 61, 177, 182, 287, 419, contract maintenance 233
structure of airline industry 445, 448, 449, 450 nonroutine maintenance 231
150-51 early history 36, 38 organization Fig. 7-12
see also Airline Deregulation financial condition 447 overhaul of airframes 231-33
Act (1978); regulation of losses 165, 445 overhaul of engines and other
airlines mechanics’ strike 405 components 233
design characteristics 389-90 mergers and acquisitions 61, routine airframe maintenance
Detroit News Trophy Race 68 182 229-31
DHL Airways 325, 328 postderegulation 206 types of maintenance 228-29
Diamond Aircra 117, Table 4-5 revenue passenger miles Table engines
dilution 302 5-1 Allison GMA 3007C 72
dimensional weight 331 strike against 169, 445 CFM 56-5C-1 385
diminishing returns, law of 310, travel agents 268 CFM International 385
Table 10-4 union concessions 415, 419 General Electric CF6-80C2 65,
direct impacts 23, Table 1-4 venture capital 436 385, 386
directing 212 Eastern Air Transport 36 General Electric fan-jet 66
directionality, and air freight rates Eastern Shu le 62 Lycoming 71
338 easyJet 181, 278 maintenance 230-31
directional pricing 301 economic characteristics 175-96 overhauling 232, 233
direct operating costs 304-6 airline passenger load factors Pra & Whitney 382
direct selling methods 180-81, 268 191-95 Pra & Whitney fan-jet 66
discrete address beacon system airlines as oligopolists 177-86 Pra & Whitney Hornet 37
(DABS) 94 other unique characteristics 186- Pra & Whitney J57 41
diseconomy of scale 180 90

558 AIR TRANSPOR T A TION


Pra & Whitney JT9D-7R4C2 business 300 deputy administrator for gen-
390 Civil Aeronautics Board 185, eral aviation 70
Pra & Whitney JTSD-200 series 285, 286-87, 472 engineering and development
435 coach 286 93-94
Pra & Whitney PW4000 65, common 297, Fig. 10-7 environmental protection 93
385, 386 competition 184-85 extended twin-engine opera-
Pra & Whitney R985 radial 73 Continental Airlines 185 tions (ETOPS) 65
Pra & Whitney R-2000 39 decreasing 302-3 flight service stations 90
Pra & Whitney Wasp 33, 37 Delta Air Lines 185 maintenance regulations 231,
Rolls-Royce 382 deregulation 59 232, 432
Rolls-Royce fan-jet 66 domestic airlines average Table organization Fig. 3-2
Rolls-Royce RB 211-524D4D 65 10-1 other activities 94-95
Rolls-Royce RB 211-524134a 386 excursion 300 pilot statistics 140
Warner Super-Scarab 68 flight-time-specific 300 responsibilities 81, 83, 87, 90-94
en route charges 304-5 fuel prices 287 rules 95
en route service Table 12-2 increasing 303 safety regulations 129
equipment trust financing 432 International Air Transport Federal Aviation Agency (FAA)
equipment turnaround time Association 53-54, 470, 472, 42, 52, 54, 55, 87
360-61 474, 475 Federal Aviation Regulations
Equitable Life Assurance Society introductory 299 (FAR)
of the United States 440 joint 297 FAR 121 207
equity financing 430 no-frills 296-97 FAR 135 207
ESS (electronic switching normal 297 flight crew scheduling 350
system)(ARINC) 103 penalties 301 management requirements 207
essential air service, defined 59 promotional 271, 298 Part 91 124, 137
Essential Air Service (EAS) pro- Trans World Airlines (TWA) 185 Part 133 124
gram 155, 162 trend 285-87, Table 10-1 Part 135 123, 124, 137, 155
Euralair 72, 116 types 297 see also regulation of airlines
Eurocopter 20 United Airlines 185 Federal Control of entry into Air
European Aeronautics Defense Y fare 184 Transportation (Keyes) 55
and Space (EADS) 385 see also pricing Federal Express Corporation 325
Evans Economics, Inc. 247 Farley, James 36 acquires Flying Tiger 321, 324
exception rate 332 FBOs see fixed-base operators Airbus A380 329
excess capacity 188, 189 Federal Aid Airport Program 92 airports 327
excess pound rate 333 Federal Airport Act (1946) 92 Boeing 727 381
excursion-fare sales 300 Federal Aviation Act (1958) 54-55 Cessna Caravan 71
Executive Jets’ Netjets 117 amendments 476 international services 328
executive vice-president and gen- creation of FAA 52, 87 labor relations 422
eral manager, role of 203 criticism 55 overnight air express 323
expendables 230 growth of airline industry 437 profitability 62
expert opinion method 254 Section 401 160-61 venture capital 436
express carriers 324-25, 327 Section 418 161 viability 419
extended twin-engine operations Section 419 161 Federal Highway Administration
(ETOPS) 65 Federal Aviation Administration (FHA) 83
external load 124, Table 4-3 (FAA) 87-95 federal legislation 46-60
extra section 364 advisory circulars 92 additional air mail acts 50
aircra and aviator certification Air Commerce Act (1926) 33, 48-
FAA see Federal Aviation Admin- 91-92 50, 67, 87
istration aircra standards 139 Airline Deregulation Act (1978)
FAA Aviation Forecasts 158, 253 airline regulation 190 43, 56, 57, 58-60
FAA Statistical Handbook of aviation airline statistics 158 Civil Aeronautics Act (1938) 21,
158 airport aid and certification 92 39, 44, 51-52
“failing carrier” doctrine 374 air taxi certificate 124 deregulation movement 55-57
Fairchild business jets 117 air traffic control 90-91, 415 early federal legislation 48
Fansler, R E. 31 Airworthiness Directives (ADs) Federal Aviation Act (1958) 52,
FAR see Federal Aviation Regula- 229, 231 54-55
tions aviation forecasts 246, 247, 253 reasons for regulation 46-48
fares capacity control 192 Federal Maritime Commission 80
actions 299-301 Civil Aeromedical Institute 93 Federal Railroad Administration
American Airlines 150, 185, 300 Civil Aviation Security Program (FRA) 86
America West 185 93

INDEX 559


Federal Transit Administration upgrading vs. replacing 392-93 third-freedom rights 470, 480,
(FTA) 85 web sites 395 481, Fig. 16-1
FedEx see Federal Express Corpo- flight a endants 237-39 fourth-freedom rights 470, 480,
ration flight crew expenses 304 481, Fig. 16-1
feedback 211 flight-crew scheduling, director fi h-freedom rights 470, 480,
feeder routes 33, 149 of 223 Fig. 16-1
field ticket offices (FTOs) 267 flight cycle 308 Five Freedoms Agreement 466-
fi h-freedom rights 470, 480, Fig. flight data recorders (FDRs) 99 67, Fig. 16-1
16-1 flight dispatch, director of 223 nine freedoms of the air Fig. 16-
final report 100 flight dispatch manager 223-24 1
finance companies 432 flight engineer 225 freehand lines 251, 252
finance and property department flight manager 225 frequent-flier programs 151, 178,
218, Fig. 7-5 flight operations, regional man- 276
financial (capital) lease 379, 434 ager of 224-25 fringe benefits 409, Table 14-3, Table
financial data, and fleet planning flight operations costs 304-5 14-4
386 flight operations department 223- Frontier Airlines
financial and statistical reporting 27, Fig. 7-11 collective bargaining 418
162 Flight Options 117 early history 40, 149
financial statistics 165-72, Table 5-5 flight plans, filing 126 mergers and acquisitions 61,
financing 427-53 flight procedures and standards, 182
cash management and financial director of 227 union concessions 415
planning 450-53 flight procedures and training, Frye, Jack 37, 38
external sources 430-37 vice-president of 223, 227 fuel efficiency
fixed-base operators 135-36 flight service station (FSS) 126 Boeing 727 391
funding sources 437-50, Table flight-time-specific fares 300 Boeing 757 382, 391
15-4 flight training, director of 227 generally 19, 186, 188
industry balance sheet 437, 439, Florida Airways Corp. Fig. 2-1 fuel expenses 187-88, 304
Table 15-2, Table 15-3 flying, vice-president of 223, 224 fuel prices
internal sources 428-30 Flying Tiger 321, 323-24 and airline costs and fares 287
web sites 455 food/bar services 264 and fleet planning 375
fire-fighting 122-23 food service department 237, Fig. history 167-68, 169-70
first-class service 264 7-15 functions of management 210-13
first officer 225 Ford, Gerald 56, 475 funds
Fish and Wildlife Service 123 Ford, Henry 34 1960 to present 437-50, Table 15-
fitness determination 160, 161 Ford Air Transport Fig. 2-1 4
Five Freedoms Agreement 466-67, Ford Reliability Tour 67 1990s to present 446-48
Fig. 16-1 Ford Trimotor 34-35, 36 industry balance sheet 437, Table
fixed-base operators (FBOs) forecasting 243-55 15-2, Table 15-3
definition 50, 67 causal methods 246-48, 253, Fig. summary 448-50
functions 129, 133 8-1 funeral travel 270
instructional flying 122 defined 244
profitability 135-36 judgmental methods 253-55 Galaxy Aerospace 117
size and scope 134-35 and market research 234 Galileo reservation system 274
and Small Aircra Transporta- purpose 244-46 “GA Team 2000” 128
tion System (SATS) 75 time-series or trend analysis GE Aerospace 11
fixed costs 308 methods 249-53, Fig. 8-2 Gemini Air Cargo 325
fleet capacity 18 web sites 256 general and administrative costs
fleet planning 373-98 foreign investment 445, 481 307
American Airlines 396-99 Forest Service 83 General Air Express 322
commonality 378 Forstmann Li le 72, 116 general aviation 67-75
defined 382 401 carriers 148, 160-61 aircra shipments Table 1-3
design and development 382-87 fourth-freedom rights 470, 480, associations 104-6
hub-and-spoke system 375 481, Fig. 16-1 business aviation 73, 136-40
leasing trend 379-80 fractional ownership 117-18, 121 defined 19, 21-22, 68, 112
long-range aircra 378 France 463, 478, 481 deregulation 73
model 388 Frankfurt International Airport factors affecting 114, 116-18
noise restrictions 381-82 483-84 future 74-75
prederegulation era 374-75 freedoms of the air helicopters 20, Table 1-3
process 387-92 Two Freedoms Agreement 466- home of 67-68
rationalization 376-78 67, Fig. 16-1 maturation 70-72
technical aspects 376 overview 19-20

560 AIR TRANSPOR T A TION


personal market 140 grandfather rights 45, 148, 149 and regional/commuter airlines
post-World War 11 years 68-69 gross national product (GNP) 73
users 136-41 cyclical variations 250, 251 scheduling 188
web sites 143 forecasts 248, 253 Hubbard, Edward 33
general aviation aircra and general aviation aircra Hughes Aircra 11
active 113, Table 4-1 247, Fig. 8-1 Hughes Airwest 60, 149, 182
by type and primary use Table trends 249 Husky (company) 72
4-3 Ground Control 225, 226
shipments Table 1-3, Table 4-2, ground servicing, schedule impli- IATA see International Air Trans-
Table 4-6 cations 351-53 port Association
general aviation airport 125 group travel 270 Icahn, Carl 417, 418
General Aviation Manufacturers Grumman AA-58 72 ICAO see International Civil Avia-
Association (GAMA) 104 Grumman Aircra Corporation 73 tion Organization
causal model forecasts 247 Grumman Gulfstream 70, 73 identification codes 163
establishment 70, 112 Guatemala City Protocol 464 IFF (“identification, friend or foe”)
“GA Team 2000” 128 Gulfstream Aerospace Table 4-6 38
general aviation industry inclusive tour charters 473
reports 128 The Hague Protocol to the War- Independent Union of Flight At-
“No Plane, No Gain” program saw Convention 464 tendants 416
128 Hamilton, Alexander 85 independent variables 247
Piston-Engine Aircra Revitali- Hamilton Standard 35 indirect impacts 23, Table 1-4
zation Commi ee (PEARC) Hanshue, Harris “Pop, “ 35 indirect operating costs 306-7
128 Havana Convention (1928) 462-63 induced impacts 23, Table 1-4
purpose 4 Hawker BH-125 72 industry, defined 148
General Aviation Revitalization Hawker-Siddeley 42 industry balance sheet 437, 439,
Act (1994) 7, 19, 72, 117, 127 helicopters 20, 40, 137, Table 1-3 Table 15-2, Table 15-3
general aviation statistics 112-27 medical use 124 industrywide bargaining 406, 412
aircra uses 119-25, Table 4-3 shipments Table 1-3 inelastic demand 292, 294-95, Fig.
airports 125-26, Table 4-4 Henson Airlines 61 10-5, Fig. 10-6
FAA services 126-27 Hereford’s Air Cargo Guide 163 inflation 16
factors affecting general avia- high-yield revenue spill 303 in-flight entertainment 264
tion 114, 116-18 hijacking 93 information services department
general aviation support industry see also September 11, 2001 218, Fig. 7-6
127-36 history 29-75 Inland Airlines 182
aviation service industry 129-36 air cargo 321-25 insect control 123
manufacturers 127-28, Table 4-6 economics prior to deregulation in-service use 364
pilots and aircra manufactur- 43-46 instructional flying 122, Table 4-3
ing 129 federal legislation 46-60 instrument flight rules (IFR) 90,
general commodity rate 331, Fig. formative period (1918-1938) 127
11-1 31-38 insurance 37, 71, 305
General Dynamics 11, 19, 71, 116 general aviation 67-75 insurance companies 432, 449
General Electric 65, 66, 117, 385, growth years (1938-1958) 39-41 Insurance Exchange Building
386 international aviation 472-77 (Chicago) 267
General Motors 36 labor relations 406-12 intangibles, in fleet planning 398
“Generation Y”, as employees maturity (1958-1978) 41-43 integrated carriers 324-25, 327
214, 423 postderegulation evolution 60- intensive growth strategies 271-74
Germany 476, 478, 481, 483 67 interactive marketing agreements
GE/Snecma 65 web sites 76 278-79
G.I. Bill 136 Hoover, Herbert 33, 35 Inter-Allied Aviation Commi ee
Gippsland Aeronautics Table 4-5 hub-and-spoke system 460
globalization 480-84 advantages 366-68, Fig. 12-15 Inter-American Commercial Avia-
goals 210 as barrier to entry 178, 179 tion Commission 462
go-team 98-99 complaints about 169 interline agreements 157, 164, 265
government market 10-12, 124-25, cross-connections 365 interline sales 267
Table 1-2 disadvantages 368 Interline Se lement of Agent-Is-
government regulation 190 effect of deregulation 62 sued Documents Agreements 164
design and development 387 fleet planning 375, 397 Interline Traffic Agreement-Pas-
government subsidies 44-45, 47, growth 445 senger 163-64
59, 149, 186 major and national carriers 151 intermediate layover (IL) checks
GPA Group 380 as marketing strategy 279-80 230
Graf Zeppelin 35 overnight air express 323

INDEX 561


Intermodal Surface Transportation International Convention for Air web sites 426
Efficiency Act (1991) 85, 87 Navigation 462 see also strikes
international air law 463-70 International Coordinating Coun- Laird, Ma y 67
International Air Navigation Code cil of Aerospace Industry Associa- Laird Swallow 67
461 tions (ICCAIA) 104 Lake Central 149
International Air Services Transit International Council of Aircra Lake (company) 72
Agreement 466-67, Fig. 16-1 Owner and Pilot Associations Laker Airways 475
International Air Transport Agree- (IAOPA) 105 Lancair Columbia 3000 118
ment 466-67, Fig. 16-1 International Lease Finance Cor- Lancair International 117
International Air Transport As- poration (ILFC) 380 see also Columbia Aircra
sociation (IATA) 107-8 International Organization for law of demand 288, Fig. 10-1
fares 53-54, 470, 472, 474, 475 Standardization (ISO) 104 law of diminishing returns 310,
forecasts 246 Internet ticket sales 180-81, 268 Table 10-4
formation 470-71 interstate air commerce 21 Lear, William “Bill, “ 68, 69, 70,
identification codes 163 interstate air transportation 21 254
interline agreements 164 Interstate Commerce Commission Lear (company) 69
routes 475 (ICC) 36, 39, 50, 51, 80 Learjets 68, 70, 72
scheduling data 369 introductory fares 299 Model 23 114
traffic rules 472 inventory management 303 Model 45 118
travel agents 268 investment banks 432-33, 437 Model 55 72
International Air Transportation investment tax credit (ITC) 71, Model 60 72
Competition Act (1979) 476-77 116, 379, 430, 445 Lear-Siegler 71, 72, 116
International Association of Ma- irregular variations 249, 251, 252, leasing 379-80, 430, 433-35, 449,
chinists 167 Fig. 8-2 452
International Association of Ma- Israel 476 legal department 218, 220, Fig. 7-8
chinists and Aerospace Workers legislation see federal legislation
401, 403, 419 Janus, Tony 31 leisure class 271
international aviation 459-84 Japan 478, 481 levels of management 202-5,
associations 106-8 Japan Airlines 326 214-15
Bermuda Agreement (1946) 471- jet airliner, first 40 Lewis, Fulton, Jr. 35
72, 475 Jet America 412 liabilities 437, 439, Table 15-3
business-class service 277 JetBlue 62, 278, Table 5-2 Liberty Aerospace Table 4-5
civilian aviation market 12, 15 Jetstream International 61 life insurance companies 432, 449
future challenges 484 Johnson, Lyndon Baines 80, 114 life-limited parts 230
globalization 480-84 joint airline/military ticket offices Lindbergh, Charles 35, 87, 121
history 472-77 (JAMTOs) 267 line of credit 431
international air law 463-70 joint capacity-restraint agreements line departments 223-39
International Air Transport As- 474 engineering and maintenance
sociation (IATA) 470-71 joint fares 297 227-33, Fig. 7-12
sovereignty of airspace 460-63 joint rate 332 flight a endants 237-39
web sites 486 judgmental forecasts 253-55 flight operations 223-27, Fig.
International Chamber of Com- just-in-time production 22 7-11
merce 463 marketing and services 234-37,
International Civil Aviation Or- Kahn, Alfred E. 56, 150 Fig. 7-13
ganization (ICAO) 106-7 KC-135 jet tanker 41 line personnel 216
data for scheduling 369 Kelly, Clyde 33 line reserves 364
disputes 471 Kelly Act (1925) 33, 35, 48 load factor
forecasts 246 Kennedy, Edward 56, 150 and airline scheduling 362-63
formation 466 Kennedy, John F. 80 average annual 150, 189, 191,
headquarters 471 Keyes, Lucille 55 Table 6-2
and IATA 471 KLM 478 capacity vs. demand 192-95, Fig.
registration of agreements 470 Korea 476 6-1, Fig. 6-2
safety and security 94 Korean Air 325 and commercial transport sales
International Commission for Air 17
Navigation 461 labor costs 187, 188 fluctuations 192
International Commi ee of Tech- labor relations 399-424 and pricing 195, 312-13, Table
nical Experts on Air Jurisprudence future 423-24 10-5
463 history 406-12 local-area VHF air/ground com-
International Conference on Civil Railway Labor Act (1926) 54, munications service (ARINC) 103
Aviation 464-70, 479 401-6, 409, 412 local-service carriers 149, 365
since deregulation 412-23 Lockheed aircra

562 AIR TRANSPOR T A TION


Constellation 39, 40, 150 control of regional air services middle management 202, 203-4,
Electra 41 163 205, 208
JetStar 70, 73 major dispute 403 mid-range airlines 263
L-1011 42, 65, 93, 385 major stations 227 Midway Airlines
Lodestar 73 management 202-6 demise 170, 171, 182, 445, 448,
Sirius 121 decision making 205-6 449
Super Constellation 41 defined 202 as new-entrant carrier 412
Vega 35, 121 functions 210-13 and Northwest Airlines 62
Ventura 73 levels 202-5, 214-15 Mike Monroney Aeronautical
Lockheed (company) 11, 254 management by objectives (MBO) Center 94
long-range aircra 378 211, Fig. 7-3 mileage-based pricing 300
long-term cash forecast 453 management team 206-8 military travel 270
long-term debt/equity ratio 447 mandatory mediation 402-3, 407 Millar, M. Stuart 72, 116
long-term forecast 244 Manufacturers’ Service Bulletins minimum stays 301
long-term loan 431 229 minor dispute 403
Loral 11 marginal costs 189-9 Mitchell (company) 69
Lorenzo, Frank 61, 153, 416 marginal revenue 309, Table 10-3 Mitsubishi 66
Los Angeles Airways 40 Maritime Administration (MA- Mitsubishi Diamond 72
low-cost airlines 263, 264 RAD) 83-84 Mitsubishi MU-2 73
low-cost carriers 375 market development 273-74 Moellendick, Jake 67
relationships 278-79 marketing 258 Mohawk Airlines 37, 40, 149
low-yield revenue spin 303 passenger marketing 257-80 Mooney Aircra 69, 70, 72, 116,
LTV 11 prederegulation 258 117, Table 4-5
Ludington Airlines 35-36 product research 262-65 Mooney Eagle 117
Lu hansa 37, 324, 325, 326, 478 see also passenger marketing Mooney Ovation 118
luxury airlines 263 marketing concept 259-60 Moraine-Saulnier MS-760 72
Lycoming engines 71 marketing costs 266 Morrow, Dwight 33
marketing mix 260-69 moving average 251, 252
McCarran, Pat 36 marketing and services depart- multiplier effect 366-67, Fig. 12-15
McDonnell-Douglas 13, 14, 66, 435 ment 234-37 Muse Air 61, 412
McDonnell-Douglas aircra organization 234, Fig. 7-13 mutual aid pact (MAP) 408, 414
DC-8 41, 324 marketing strategy 261, 388 mutual dependence 176, 184-85
DC-9-30 392-93, 413 market penetration 271-72
DC-9-80 65 market research 234, 269 National Aeronautics and Space
DC-9 43, 380 market segmentation 269-71, Fig. Administration (NASA) 10, 12,
DC-10 42, 65, 93, 385, 390 9-1 128, Table 1-2
MD-11 65-66, 378, 383 Martin Marie a 11 national air carriers 153-54
MD-80 65, 375, 381, 383, 391, 435 Martin twin-engine planes 40 National Airline Commission 170
MD-81 65 mass selling 266 National Airlines
MD-82 65 Maule Aircra 72, Table 4-5 mergers and acquisitions 60, 61,
MD-83 65 maximum stays 301 151, 182
MD-87 65 MAXJet Airways 278 revenue passenger miles Table
MD-88 65 Mead, George 39 5-1
MD-90 65, 383 “MEDEVAC” units 124 strikes against 414
McNary-Watres bill (1930) 35, 50 mediation, mandatory 402-3, 407 National Air Races 68
maintenance medical aircra use 124, Table 4-3 National Airspace System 75
airline scheduling 344, 346-49, medical department 218, Fig. 7-8 National Air Transport 34, 322,
Table 12-1, Fig. 12-3 medium-term forecast 244 Fig. 2-1
costs 305 megacarriers 62, 151 National Association of State Avia-
jet aircra example 347-48, Table mercantile travel 270 tion Officials (NASAO) 105-6
12-1, Fig. 12-2, Fig. 12-3 Mercure 385 National Business Aircra As-
types 228-29 mergers 60-62, 116, 181-84, 376-78, sociation (NBAA) 104-5
maintenance base 227 418-21 business aviation categories 119
maintenance burden 305 purpose 176 causal model forecasts 247
maintenance efficiency goals Mesaba Airlines 61 growth 69, 70
346-47 meteorology, director of 226 “No Plane, No Gain” program
maintenance needs 390-91 Metropolitan Life Insurance Com- 128
maintenance programs, FAA pany 440 purpose 119
certification 91 MGM Grand Air 263 National Commission to Ensure
maintenance work reports 232 Micco Aircra Table 4-5 a Strong Competitive Airline
major air carriers 153-54 Mid-Continent Airlines 182 Industry 170

INDEX 563


National Defense Reserve Fleet 84 at hub 368 future 428, 450
National Economic Impact of Civil as barrier to entry 179 growth through merger 181-84
Aviation 23 for environmental protection 93 mutual dependence 184-85
National Highway Traffic Safety and fleet planning 381, 390, 392 number of carriers and market
Administration 86 and replacement aircra 17 share 177
National Labor Relations Act noncash expense 429 “on condition” monitoring 230
(1935) 402, 403, 405, 412 nonoperating costs and revenues one-way vs. round-trip purchase
National Labor Relations Board 307 requirements 301
406 nonroutine maintenance 231 on-line sales office 267
National Mediation Board (NMB) nonscheduled air carriers 148-49, on-time performance reporting
Air Line Pilots Association and 473 requirement 275
Texas International 415 nonscheduled services 263 open-sky agreement 478, 481
Allied Pilots Association and nonstop service 356, 365, 366 operating economics 391
American 422 “No Plane, No Gain” program 128 operating lease 379, 434-35
collective bargaining process normal fares 297 operating management 202, 204-5,
403-5 North American Aviation 36, 70, 208
Comair 421 73 optimization model 389
establishment 401 North American Sabreliner 70, 73 options, in fleet planning 392
mandatory mediation 402, 404, North Central Airlines 40, 60, 149, order-option-plan mix 392
407 182 orders, in fleet planning 392
self-help process 405 Northeast Airlines 182, 374 organization 202, 213-16
National Park Service 83 Northeast Rail Service Act (1981) organizational chart
National Recovery Act 406 86 company 216-17, Fig. 7-4
National Skyway Freight Corpora- Northrop, Jack 37 staff departments Figs.7-4 to
tion 323-24 Northrop (company) 11 7-11
National Transportation Safety Northwest Airlines organization manuals 215
Board (NTSB) 95-100 aircra financing 380 organization structures
accident investigation 94-95, air freighters 324 alternative 208-9, Fig. 7-2
98-100, 190 bankruptcy 171-72, 309, 449 pyramid 202, 208, Fig. 7-1
aviation safety 98 certificated domestic route organizing 212
establishment 55, 80 miles Table 2-1 origin and destination (O & D)
final report 100 contract mail service 33 city-pairs 188, 298, 301, 367
organization Fig. 3-3 employee ownership 420, 423 out-of-service time 346
publications 98 financial condition 62, 419, 445, out-of-service use 364
Public Inquiries Section 98 447, 448 output determination 309-15, Table
safety recommendation 99 international flights 481 10-6
scope and responsibilities 97-98 labor relations 421 outsourcing 422
Navion 69, 70 mergers and acquisitions 61, overbooking 195
Navy Department 32 149, 182 overhauling
NBAA see National Business Air- profits 445 airframes 231-33
cra Association revenue passenger miles Table costs 305
net earnings 428 5-1, Table 5-2 engines and other components
Netherlands 476, 478, 480 strikes against 414 233
net worth 437, 439 union concessions 419 overnight air express 323
New Court Securities 436 use of Boeing 747-400 386 overnight maintenance 229, 230,
new-entrant/low-cost carriers 62, Northwest Airlink 63, 157 Table 12-1
412-13, 414 no-shows 194-95, 286 owner’s equity 437, 439
new-generation airliners 63, 65-66 NTSB see National Transportation Ozark Air Lines 40, 61, 149, 182
New Piper Aircra Corporation Safety Board
19, 72, 117, Table 4-5 Pacific Aerospace Corporation
see also Piper Aircra Corpora- OAC Air Cargo Guide 163 Table 4-5
tion objectives, corporate 388 Pacific Airlines 40, 182
New York Air 60, 153, 182, 412, Odom, Bill 121 Pacific Airmotive Corporation
415 Official Airline Guide (OAG) 163 Learstar 73
night flying 32-33 off-line sales office 267 Pacific Air Transport 34, Fig. 2-1
nine freedoms of the air Fig. 16-1 off-peak pricing 195, 302 Pacific Southwest Airlines 61, 177,
NMB see National Mediation oligopoly 177-86 182
Board barriers to entry 178-79 pallet and container system 264-65
no-frills airlines 263 characteristics 176 Pan American
noise standards defined 176 air freighters 324
and air cargo operations 327 economies of scale 179-81 business-class service 277

564 AIR TRANSPOR T A TION


demise 61, 170, 177, 182, 287, as managers 207 JT8D-200 series 435
419, 445, 448, 449 Piper, William T. 68 JT9D-7R4G2 390
financial condition 447 Piper aircra PW4000 65, 385, 386
founding 37 Apache 69 R985 radial 73
international service 43, 474, 479 Cherokee 70, 114 R-2000 39
jet orders 41 Comanche 70, 121 Wasp 33, 37
jumbo-jet service across Atlantic Cubs 68 preferred stock 433
42 Lance 19 Presco , Bob 323
losses 165, 445 Meridian 117 president, role of 203
mergers and acquisitions 60, Pacer 121 presidential intervention 403, 405
151, 182 Super Cub 69 pricing
postderegulation 206 Tomahawk 114 analysis 302-3
revenue passenger miles Table Tri-Pacer 69, 70 and demand 288-95, Fig. 10-1
5-1 Twin Comanche 70 and marketing 234, 260, 265-66
union concessions 415, 416, 418 Piper Aircra Corporation and output determination 309-
use of 747 aircra 386 early history 68, 69 15, Table 10-6
venture capital 436 emergence from bankruptcy 19, process 298-304
Pan American Airways see Pan 72 strategies and objectives 299
American liability 114 tactics 299-302
Pan-American Conference 462, 463 ownership 71, 116 web sites 317
Pan American Shu le 61 see also New Piper Aircra see also fares; fuel prices
Pan American World Airways see Corporation primary-use categories 113, Table
Pan American Piston-Engine Aircra Revitaliza- 4-3
Paris Convention (1919) 461-62, tion Commi ee (PEARC) 128 priority reserved air freight 332
463 place, in marketing mix 260, private debt placement 432
passenger fares see fares 267-69 privately owned airports Table 4-4
passenger load factor see load plan aircra 392 private-use airports 125, Table 4-4
factor planning procedure, defined 211
passenger marketing 257-80 defined 244 product, in marketing mix 260,
consumer-oriented marketing for forecasting 245 261-62
concept 269-74 as management function 210-12 product development 272-73
marketing concept development principles 213-15 product differentiation 261
259-60 see also fleet planning product improvement 272
marketing mix 260-69 Planning Grant Program (PGP) 92 production certificate 91
strategies since deregulation PLIN (private-line intercity production costs 266
274-80 network)(ARINC) 103 production-oriented period 259,
web sites 281 point-to-point carriers, relation- 269
passengers, general aviation 22 ships 278-79 product liability 19, 71, 72, 114,
passenger service costs 306-7 point-to-point service 151, 378, 413 116, 117, 127
pa ern bargaining 407, 412 point-to-point service (ARINC) professional airline manager 37-38
Pa erson, William A. 37, 38 102 Professional Air Traffic Controllers
payload Fig. 13-1 Polar Air Cargo 325 Organization (PATCO) 415
payload-range diagrams 390 policy, defined 211 profitability 17, 46, Table 2-3, Table
Peach, Bob 37 policy and procedures manual 211 15-1
peak pricing 302 poll forecasts 255 profit maximization, short run
Pennsylvania Airlines 61 positioning flights 192 314-15, Table 10-6, Fig. 10-11
People Express 61, 153, 182, 412, Post, Wiley 121 profit-sharing 417, 420-21, 422,
436 Postal Service 155, 190, 345 423, 435
People University, Southwest Post Office Department progressive overhaul/maintenance
Airlines 214 air cargo beginnings 321 230, 231-32
Permanent Court of International air commerce 39 progress payments 391, 433
justice 466 air mail 31-32, 48, 321-22 projected industry environment
personal flying 121-22, 140, Table air mail compensation 54, 285 388
4-3 wages and hours of pilots 406-7 promotion, in marketing mix 260,
personal selling 266 Pra & Whitney (company) 65, 266-67
personnel department 218, Fig. 7-7 435 promotional fares 271-72, 298
physical performance factors 390 Pra & Whitney engines Provincetown-Boston Airways 61
pickup and delivery service 336 efficiency 382 Prudential Insurance Company of
Piedmont Airlines 40, 61, 149, 182, fan-jet 66 America 440
445 Hornet 37 psychographic segmentation 273
pilots 129, 140, Table 4-7 J57 41 public equity offering 433

INDEX 565


publicly owned airports 125, Table regulations, of specific airlines routine scheduled maintenance
4-4 211-12 229
public-use airports 125 rejected demand by other airlines RPMs see revenue passenger miles
pushdown 397 303 rules 211-12
pyramid of authority 202, 208, related products and services 7, 20 “runaway airlines” 415
Fig. 7-1 religious travel 270 Ryan (company) 69
Renault 117
qualitative service 262 repairables 230 Sabena World Airways 324
quantitative service 262 repair stations, FAA certification Sabreliner 117
quotas 345 91 SABRE reservation system 274
replacement aircra 17 safety
Railroad Revitalization and Regu- Republic Airlines airlines 47, 168
latory Reform Act (1976) 86 collective bargaining 418 Air Safety Board 51, 52
Railway Express Agency (REA) mergers and acquisitions 60, 61, air traffic and safety, vice-presi-
321, 322, 323 149, 182 dent of 223
Railway Labor Act (1926) 54, 401- union concessions 415 Air Transportation Safety and
6, 409, 412 research and development (R & D) System Stabilization Act
Raytheon 11, 19, 71, 116, Table 4-6 5, 7-8, 11, 13 (2001) 171
Raytheon Hawker 800 XP 118 reservations, sales, and promo- AOPA Air Safety Foundation
Raytheon Premier I 117 tional costs 307 105
Raytheon Travel Air 117 reservations systems see compu- Civil Aeronautics Board, Bu-
Reagan, Ronald 116, 415 terized reservation systems reau of Safety 98
recapture 397 restricted articles 337 FAA regulations 129
recession, impact on airline indus- return on investment (ROI) 448, International Civil Aviation
try 190 449, 450, Table 15-1, Fig. 13-1 Organization 94
refunds 302 revenue, total Table 10-3, Fig. 10-8 and maintenance 230
regional air carriers 20, 154-58, revenue passenger miles (RPMs) National Highway Traffic Safety
Table 5-3 2004 statistics Table 6-1 Administration 86
code sharing 157 average yield 44, Table 2-2 National Transportation Safety
fitness determination 161 early 1960s 165 Board 55, 80, 94, 95-100, 190,
ownership 163 early 1970s 167 Fig. 3-3
post deregulation 62-63 early 1980s 169 September 11, 2001 hijackings
see also air taxi late 1960s 167 66-67, 95, 214
Regional Airline Association late 1970s 168 Transportation Safety Act (1974)
(RAA) 100-101, 158 late 1980s 169 95-96, 97
regional flight dispatch manag- major and national carriers 151, St. Lawrence Seaway Authority 84
ers 223 Table 5-1, Table 5-2 St. Lawrence Seaway Develop-
regional jet (RJ) concept 368 mid-1990s to the 21st century ment Corporation 84-85
regional manager of flight opera- 170 sale and lease-back 430, 452
tions 224-25 and pricing 309, Table 10-3, Fig. sales, ticketing, and travel win-
regulation of airlines 10-9 dows 302
Civil Aeronautics Board 55-56 statistics Table 5-5 sales force opinion method 254-55
Department of Commerce 190 Rickenbacker, Eddie 38, 436 sales-oriented period 259
Department of Transportation Robertson Aircra Corp. Fig. 2-1 sales planning department 236
(DOT) 190 Robson, John E. 56 sales and services department 236-
economic developments 43-46 Rockefeller, Laurence 436 37, Fig. 7-14
Federal Aviation Administra- Rocky Mountain Airways 61 schedule delay 368
tion (FAA) 129, 190, 231, Roeck, Thomas J. 420 scheduled services 263
232, 432 Rolls-Royce (company) 42, 65, 381 schedule plot 346
fleet planning 374-75 Rolls-Royce engines scheduling 343-69
government regulation 190 efficiency 382 aim of 344-46
labor relations 406-12, Table 14-2 fan-jet 66 data limitations 369
reasons for 46-48 RB 211-524D4D 65 defined 344
Transportation Security Regula- RB 211-524134a 386 development process Fig. 12-1
tions (TSR) 95 Roosevelt, Franklin D. 36, 39, 51 equipment assignment and
web sites 109 rotables 230 types of schedules 364-66
see also Airline Deregulation round-trip purchase requirements equipment maintenance 344,
Act (1978); deregulation; 301 346-49, Table 12-1, Fig. 12-13
Federal Aviation Regula- routine airframe maintenance flight operations and crew
tions 229-31 scheduling 344, 349-51
frequency 188

566 AIR TRANSPOR T A TION


ground operations and facility short-term period 310 Stage 3 noise standards 17, 179,
limitations 344, 351-53 show cause order 160, 161, 286 381, 392
hub-and-spoke scheduling 366- shu le airlines 263 standalone cabotage Fig. 16-1
68, Fig. 12-15 shu le services 271 Standard Agent’s Ticket and Area
planning and coordination 353- sightseeing 124, Table 4-3 Se lement Plan 164
64 Singapore 476 standard fares 297
departure time sensitivity 356, singles travel market 273 Standard and Poor’s 445
Fig. 12-6, Fig. 12-7 Skinner, Samuel K. 420 standards, performance 213
example 363-64 skip-stop 365 standby travel 271
load-factor leverage 362-63 Skymaster 39 State Department 94, 389, 467, 470
as marketing variable 234 Sleeper Transport see Douglas station and ground expenses 306
operational factors in schedule DC-3 station personnel, as scheduling
planning 349-51 Slick (carrier) 323 factor 359-60, Fig. 12-11
schedule adjustments 358-62, Small Aircra Transportation station plo ing chart 352, Fig. 12-4
Fig. 12-12 System (SATS) 74-75 Stearman, Lloyd 67
schedule salability 355-58, Fig. Small Package Shipment Agree- Stout Metal Aircra Company 34
12-9 ment 164 strikes
traffic flow 354-55, Fig. 12-5 Smith, C. R. 37 against Continental 153
publishing schedules 163-64 Smith, Frederick W. 323 airline Table 14-2
web sites 371 smoothing 251, Fig. 8-3 air traffic controllers’ 192, 287
scheduling department 346 Snell, Bertrand H. 84 American Airlines 405
seasonal variations 249, 251, Fig. Socata Table 4-5 Eastern Airlines 169, 405, 445
8-2 Socony-Vacuum Oil Company 38 International Association of
seating configurations 263-64, 389 Southern Air Lines 60, 149 Machinists 153, 403
seat-mile 308 Southern Airways 182 National Airlines 414
Second International Conference Southwest Airlines 263 Northwest Airlines 414
of Private Air Law 463 corporate culture 424 pilots’ 153
Section 401 certificates 148, 160-61 early history 149, 153 United Airlines 396
self-help, in collective bargaining employee ownership 420 subsidies, government 44-45, 47,
403, 405 expansion 177, 375, 412 59, 149, 186
semi-averages 251, 252 financial condition 419, 447, 448 Suburban Airlines 61
Senate Commi ee on Interstate labor costs 414 SuperGuppies 385
Commerce 48 mergers and acquisitions 61 supplemental air carriers 149, 473
Senate Judiciary Commi ee, pricing 299 supplemental services (ARINC)
Subcommi ee on Administrative profits 62, 447 103
Practice and Procedure 56 profit-sharing plan 421 supply factors 266
senior vice-president, role of 203, revenue passenger miles Table “survival bargaining” 415, 416
227, 234 5-2 Symphony Aircra Table 4-5
September 11, 2001 training programs 214 system constraints, in fleet plan-
and airline industry 13, 66-67 Southwest Airways 182 ning 389
and airline profitability 17, 66- sovereignty of airspace 460-63 system operations control (SOC)
67, 287, 309 span of control 213, 215 223, 225-26, 227
and airline safety and security specialized freight services 336-37
66, 95, 214 specific commodity rate 331-32, TAG Aviation 117
and air transport 13 Fig. 11-1 Taiwan 476
and defense spending 7 speed package service 332 target segment pricing 300
effect on general aviation 128 spill 303, 396-97 Tax Reform Act (1986) 71, 116,
effect on travel pa erns 264 Spirit 62 379, 430
and hub-and-spoke system 280, Spirit of St. Louis 121 Taylor Aircra Company 68
378 split charters 473 Taylorcra 72
impact on airlines 171 “spoiled” seats 303-4 TC 20 (organization) 104
services planning department Spoils Conference 35, 36 Teamsters Union 416
234, 236 stacking losses 338 technological turnover 186-87
service stations 227 staff departments 218-22 terminal control areas (TCAs)
Shaffer, Jack 70 organizational charts Figs. 7-4 to 70-71, 114
Sherman Antitrust Act test 182 7-11 terminal radar approach control
shi in demand 289-92, Fig. 10-2 staffing 212 (TRACON) 127
Shipping Board 83 staff personnel 216 terminal space 178-79
short-term cash forecast 452-53 Stage 2 aircra 179, 446 Texaco Trophy Race 67
short-term forecast 244 Stage 3 aircra 327 Texas Air Corporation
short-term loan 431, 432 collective bargaining 418

INDEX 567


mergers and acquisitions 60, 61, early history 38 Transport Worker’s Union
182, 415, 418 employee ownership 423 (TWU) 401
as new entrant 153 extended twin-engine opera- United Aircra and Transport
Texas Instruments 11 tions (ETOPS) 65 Company 33
Texas International Airlines 60, fare structure 185 United Airlines
182, 415 financial condition 448 aircra orders 380
Textron 11, 19, 71, 116 international charters 474 air freight 323, 324
Thailand 476 international flights 474 bankruptcy 171, 449
third-freedom rights 470, 480, 481, leasing 435 bankruptcy possibility 309
Fig. 16-1 losses 165, 445 Boeing 247 purchases 36-37
Third Package 258 mergers and acquisitions 33, 36, Boeing 727 operations 171
ticket counter space 353 61, 149, 182, 418, 419 certificated domestic route
Tiger Aircra Table 4-5 revenue passenger miles Table miles Table 2-1
time, and elasticity 295 5-1 collective bargaining 418
time-series analysis 249-53, Fig. 8-2 union concessions 419 collision 41
accuracy 253 travel agents 164, 168, 180, 267-68, Douglas airplane purchases 37
time zone effect 358-59, Fig. 12-10 275-76 early history 34, 35, 36, 38
“Tin Goose, “ 34-35, 36 Travel Air Manufacturing Com- employee concessions 17, 420
TNT (carrier) 328 pany 67 employee ownership 423
top management 202, 203, 205, 208 Travel Industry Association of fare structure 185
total costs, short run 310, Table America 269 hub-and-spoke system 279, 365
10-14 trend analysis 249-53, Fig. 8-2, image 290
total revenue Table 10-3, Fig. 10-8 Fig. 8-3 international flights 479, 480-81
Tower Control 225, 226 trend extension 249 labor costs 414
tower-controlled airports 126-27 trends 249-50, Fig. 8-2 leveraged buyout collapse 445
trade balance 5, 8, 20 Trident 385 li capacity 375
traffic flow 354-55, Fig. 12-5 Trippe, Juan 37, 42, 436 liquor served on flights 254
traffic statistics 165-72, Table 2-1, TriStar 42 losses 445
Table 5-5 Truman, Harry S. 40 marketing 214
Transamerica 418 Trump Shu le 62 mergers and acquisitions 61, 62,
Transcontinental Air Transport trunk carriers, defined 148 151, 182, 322
(TAT) 35 Turbo Commander 73 pilot-management relations 415,
Transcontinental and Western Air turboprops 41, 42, 73 418
35, 38, 323 turn time 361 postderegulation 206
see also Trans World Airlines TWA see Trans World Airlines pricing 299
Transcontinental and Western Air twin-engine planes 65, 67, 69 revenue passenger miles Table
Express see Transcontinental and Two Freedoms Agreement 466-67, 5-1, Table 5-2
Western Air Fig. 16-1 September 11, 2001 hijackings
Transportation, Department of see two-tier wage scales 66
Department of Transportation Air Line Pilots Association 417 strike 396
Transportation Safety Act (1974) American Airlines 416, 420 viability 418, 419
95-96, 97 bargaining objectives 416-17, United Express 62, 63, 157
Transportation Security Adminis- 422 United Kingdom 40, 471-72, 475,
tration (TSA) 95 financially unhealthy airlines 477, 481
Transportation Security 419 United Parcel Service (UPS) 325,
Regulations(TSR) 95 type certificate 91 327, 328, 381, 422
Transportation Statistics Annual United States Coast Guard 85-86
Report 87 unconstrained operating plan 388 unit elasticity 295
Transport Worker’s Union (TWU) uncontrollable variables 260 unit operating cost Fig. 13-1
401 “Uniform System of Accounts and unity of objectives 213
Trans Star 61 Reports for Large Certificated Air Universal Air Travel Plan (UATP)
Trans World Airlines (TWA) Carriers” 162 164, 285
air express 322 unions 400-401 unrestricted Y fare 184
air freighters 324 Independent Union of Flight UPS see United Parcel Service
bankruptcy 170, 419, 445, 448, A endants 416 Urban Mass Transportation Ad-
449 International Association of ministration (UMTA) 85
certificated domestic route Machinists 153, 167, 401, USAir
miles Table 2-1 403, 419 financial difficulty 419, 445
collective bargaining 417 membership 187, 412 labor relations 419
collision 41 Teamsters Union 416 mergers and acquisitions 61, 62,
Douglas DC-1 purchase 37 182

568 AIR TRANSPOR T A TION


profits 445 wages, averaging down 422 West Coast Airlines 149, 182
USAir Express 157 walk-around inspection 229, 239, Western Air Express 33, 35, 36,
U.S. Airlines 323 Table 12-2 322, Fig. 2-1
US Airways 182 Wallace, Dwane 68 Western Airlines
bankruptcy 17, 171, 309, 447 War Department 31, 32 mergers and acquisitions 61,
commuter network 155 Warner Super-Scarab engine 68 151, 182
employee ownership 420, 423 Warsaw Convention (1929) 464 revenue passenger miles Table
labor relations 421 Weather Bureau 226 5-1
li capacity 375 Weather Bureau, Department of union concessions 415
mergers and acquisitions 37, Agriculture 32, 49 Wharton Econometrics Associates
149, 171 weather conditions 32, 349-50, 390 247
revenue passenger miles Table weather information 35, 94, 102, whipsaw bargaining 407, 417
5-2 126, 226-27 Whitney, J. H. 436
US Airways Express 157 weather modification 123 “wide-body” 42
“US Regional Airlines Industry to Weaver, Buck 67 Wilcox (company) 69
1996” 163 Weaver Aircra Company wildlife conservation 123
Utility Airplane Council 112 (WACO) 67, 72 Williams Research 71
see also Aerospace Industries web sites Wolf, Stephen 420
Association air cargo 340 women’s travel market 273
airline financing 455 Woolman, C. E. 38
Valsan 381 airline industry 173 working capital balance 451-52
value-added pricing 301 airline labor relations 426 work rules 414, 417
variable costs 302-3, 308 airline management and organi- World Airways 412
Varney Speed Lines 34, Fig. 2-1 zation 241 World Aviation Directory 158
vendor financing 435 airline passenger marketing 281 WORLDSPAN reservation system
venture capital 435-37 airline pricing, demand, and 274
vice-presidents 223, 224, 227 output determination 317 Wright Aeronautical 39
Vickers Viscount 41 airline scheduling 371 Wright Company 321
Virgin Atlantic Airways 423 airline ticket sales 180-81, 268-69 Wright Cyclone 37
virtual carriers 62 aviation overview 27
visual flight rules (VFR) 90 economic characteristics 197 “yellow dog” contracts 402
volume-related personnel 216 fleet planning 395 Y fare 184
“Voluntary Accounting System for forecasting 256 yield 44, 309, Table 2-2, Table 10-3,
Small Air Carriers” 162 general aviation industry 143 Fig. 10-9
voluntary arbitration 404 historical perspective 75
international aviation 486 zone pricing 300
Waco Classic 72 regulators and associations 109