Deck 7: Airlines

Question 1

What major factor is the main determinant in air cargo pricing?

A) discounts from full price levels as is done with motor carriers
B) weight
C) empty space on the aircraft
D) direction of travel of the shipment

Answer 1

B

Question 2

What is the percentage of revenue generated by the top 10 air carriers?

A) 75 percent
B) 82 percent
C) 91 percent
D) 96 percent

Answer 2

B

Question 3

Which cost element of the U.S.scheduled airlines accounts for the largest portion of operating costs?

A) flying operations
B) maintenance
C) administration
D) labor

Answer 3

D

Question 4

Which event marked the beginning of the modern airline industry?

A) The Wrights' first flight at Kitty Hawk in 1903
B) The U.S. Post Office's examination in 1908 of the feasibility of air mail service
C) Lindbergh's flight to Paris in 1927
D) The use of airplanes for mail transport

Question 5

What is the primary method of service competition between air carriers?

A) frequency and timing
B) in flight cabin service and added amenities.
C) serving new cities to force more competition
D) advertising

Question 6

Air carrier revenues are concentrated in which group of carriers?

A) all-cargo, exempt, commuters and private
B) commuters, charters, all-cargo
C) major, nationals, regionals
D) private, regulated, exempt

Question 7

Most airline revenues arise from:

A) freight shipments.
B) baggage shipments.
C) passenger travel.
D) aircraft leasing and support services to private aviation

Question 8

The traffic manager for WLG,Inc is evaluating transportation modes for shipment of the company's products.WLG's components division produces electronic assemblies according to buyer's specifications.The typical product is high-value--in the range of $30,000 to $50,000,small--less than 8 inches square,very fragile,insurance costs are $1750 per day for each item,and the shipment distance is 2,500 miles.Which mode of transportation would be most appropriate?

A) Amtrak
B) air
C) freight forwarder
D) Time guaranteed delivery truck

Question 9

Which government agency specifies acceptable flight operations and the hours of service for pilots?

A) FAA
B) STB
C) DOT
D) FMCSA

Question 10

Which is the best reason for the increase in airline intramodal competition since deregulation in 1978?

A) substitution of smaller aircraft for larger aircraft
B) U.S. carriers forming alliances with foreign airlines such as United with Air Canada
C) increased use of discount fares in lieu of full fares
D) new air carriers entering given markets

Question 11

Deregulation of the airlines,in 1978,led to expectations that the number of carriers would increase.What has been the actual result of deregulation regarding the number of carriers in the market?

A) The numbers of carriers did increase initially but has remained steady of late.
B) The numbers of carriers did initially increase and the numbers continue to grow.
C) The numbers of carriers initially decreased but increased by 1994.
D) The numbers of carriers initially decreased and have continued to decrease.

Question 12

Mountain Airlines has annual operating revenues of less than $75 million with hubs in Denver and Salt Lake City.This airline would be classified in which air carrier category?

A) major carrier
B) national carrier
C) local hub carrier
D) regional carrier

Question 13

Which of the following commodities would be most likely to be shipped on an air carrier?

A) commodities in high volume
B) low-value finished goods
C) raw materials and partially-finished goods
D) high-value and time-sensitive goods

Question 14

Air carries face _____ competition from surface modes for either freight or passengers.

A) very strong
B) a limited amount
C) very little
D) almost no

Question 15

Why do business people pay more for airline travel?

A) The expense of the travel is paid for by their company and the business traveler demands more services than the leisure traveler.
B) They usually arrive and depart during low-demand periods.
C) They have to keep more rigid schedules.
D) Their travel expense is tax deductible and they can afford higher fares to offset the lower fares charges to leisure travelers.

Question 16

Air freight transportation is attractive to shippers because of the lower packaging costs associated with the transport of cargo.Which air transportation characteristics allow reduced packaging by shippers?

A) relatively smooth ride and automated ground handling systems
B) higher liability assumed by the air carriers and prompt payment of claims
C) quick acknowledgment of liability by the air carriers and prompt payment of claims
D) strict safety regulation by the FAA and higher liability limits required by the STB

Question 17

Air carries face _____ competition from other air carriers for either freight or passengers.

A) almost no
B) a limited amount
C) some
D) very intense

Question 18

What does the operating ratio measure?

A) number of seats sold divided by miles operated
B) operating expense divided by operating income
C) stock share price divided by the total number of shares outstanding
D) number of airplanes in the fleet divided by miles flown by type

Question 19

The Transportwriter.com corporation owns four corporate aircraft of various sizes which they use to transport executives to various company locations,and as well as documents and small freight between the company headquarters and its production facilities.What type of carrier is Transportwriter?

A) private
B) commuter
C) exempt
D) charter

Question 20

Which is the best reason for the relatively low proportion of fixed costs in the cost structure of the air carriers?

A) private investment in the airways and airports
B) the small number of aircraft that are actually owned by the airlines versus those that are leased for varying periods of time
C) public investment in the airway and airport
D) the proportion of energy and labor costs in the cost structure

Question 21

Based upon the number of passengers who was the Top Airline in 2007?

A) American
B) Delta
C) Southwest
D) jetBlue

Question 22

What was the passenger fatality rate for autos versus airlines in 2006?

Question 23

Which airline pays a 10 year captains the most?

A) Delta
B) United
C) Southwest
D) Amerijet

Question 24

Distinguish between private air carriers and for-hire air carriers.

Question 25

What are three functions performed at air terminals?

Question 26

What are the revenue classifications of the U.S.based for-hire air carriers? Define,describe and discuss with examples.

Question 27

Give an example of emergency value.

Question 28

Explain the early development of air transportation in the United States.

Question 29

Shippers using air cargo transport may have to pay an over-dimensional charge.The charge is assessed by the carrier to gain a more appropriate revenue in which situation?

A) when the cargo shipped does not weigh much but takes up a lot of space.
B) when the cargo is of a gaseous nature rather than a solid.
C) when the cargo is a solid rather than a gas.
D) when the shipment takes up all the available cargo space in the aircraft and matches the allowable load weight for the aircraft.

Question 30

What is the primary advantage of air transportation?

Question 31

Technically,what is a commuter airline?

Question 32

How many people were employed in the air carrier industry in 2007?

A) 100,000
B) 500,997
C) 560,997
D) over 1,000,000

Question 33

What is a no frills carrier is known for?

Question 34

How much did the U.S.airlines spend on fuel in 2007?

A) $60B
B) $42B
C) $50M
D) $60M

Question 35

Which aircraft has the highest cargo payload in terms of tons?

A) B747-300
B) B747-F
C) MD-11
D) L1011

Question 36

What is airline pricing characterized by?

Question 37

If aviation fuel is at $2.60 a gallon,what is the price of fuel consumed per hour on a B747?

A) $2,000
B) $6,822
C) $7,163
D) $8,869

Question 38

The airlines utilize technology to offer faster and more efficient service for their customers.One application of technology,developed by the airlines,is a paperless system called the Fast Flow Program.What is the Fast Flow Program designed to do?

A) speed aircraft takeoff and departures from congested airports
B) speed the processing of international passengers into the United States
C) speed the processing of air freight cargo through customs processing
D) speed the handling of passenger baggage

Question 39

Which air carrier had the highest operating revenue in 2007?

A) American
B) FedEx
C) UPS Airline
D) Alaska

Question 40

Which aircraft has the highest operating cost in terms of $ per hour?

A) B747-200
B) DC-8
C) B727-100
D) L1011

Question 41

What is the situation as related to airline labor? Be sure to include required skill levels,wages and the impact of unions.

Question 42

Define and discuss the length of haul and capacity of air carriers.How does this relate to intermodal competition?

Question 43

There are two ratios which are used to measure airline performance.One measures efficiency while the other measures equipment utilization.Define both,describe how they are computed and what factors they measure.

Question 44

Describe the factors that effect price in the airline industry.

Question 45

Describe Economies of Scale in airline operations.

Question 46

Each of the modes of transportation have a market niche in terms of the commodity transported by the mode.Describe the characteristics of the commodities transported by air carriers.

Question 47

What is the situation as it relates to financing and operation of air terminals or airports? How does this relate to other carriers?

Question 48

What is the major advantage of air freight? How does this relate to logistics principals discussed earlier?

Question 49

Explain the cost structure of the air carriers.

Question 50

Discuss the current issues facing the airline industry.

Question 51

Describe the nature of service competition in the airlines.