Introduction to Aviation

Aero 1022
Lesson Number 1
March 3, 2016
Welcome!
This course will develop your understanding of the air transportation system from both a
worldwide and regional aspect. This includes:
– air carriers
– airports
– air traffic service providers
– numerous direct and indirect industries associated with the aviation industry.

Let’s take some time to go through the course

outline, and a few minutes to look at our learnonline site!
Administration – A few extra points:
• Facilities and emergency exits
• Attendance – required for success, arrive on time so we
can keep on schedule
• Mobile phones/iPads – please limit to class activities
• Behavior – be courteous to your neighbours
• Lectures and tutorials – these are interactive!
The text is only one resource
ICAO – www.icao.int
CASA – www.casa.gov.au
ATSB – www.atsb.gov.au
IATA – www.iata.org
FAA – www.faa.gov
NTSB – www.ntsb.gov
Also the local A3SO and RAeS meetings.
 Introduction
• Global air travel and tourism is a $7 billion USD
annual industry with about ¼ billion jobs.
• The International Civil Aviation Organization
(ICAO) estimates that:
– every $100 of air transportation revenue generates an
additional $325 income in collateral industries
– every 100 aviation industry jobs generate about 600
collateral industry jobs.
 Direct and indirect aviation industries
• What are some direct and indirect aviation industry
contributions to the Australian economy?
• Direct
– airlines, airports, air traffic services
• Indirect (support the direct industries)
– fueling, manufacturing, catering, weather, ticketing
• Induced (also support the workers and families)
– hotels, schools, restaurants, hospitals, conferences
 Within Australia
• 1910 – first controlled flight in Australia, just outside
Adelaide
• 1920s – Civil Aviation Authority was under Department
of Defense
• 1935 – Civil Aviation Branch and Qantas took on air mail
• 1938 – Department of Civil Aviation outside DOD
following accident
• 1939-1945 – Numerous Australian pilots and technicians
joined the Canadian and British forces and then RAAF.
 Australia continued
• 1944 – One of the founders of ICAO
• 1946 – Accident Investigation Branch established
• 1959 – more than 10,000 pilots and 1,000 aircraft
– New B-707 by Qantas for long-haul flights
• 1973 - Department of Transport with Air and Surface
Branches
• 1982 – Back to independent Department of Aviation like
before 1973
• 1988 – Civil Aviation Regulations (CAR) was foundation for
current CASA
 Chapter 1 - The Airline Industry:
Trends, Challenges and Strategies
• Generally there are four stages of development for the
aviation industry. Some organizations may skip a stage
which can have a positive or negative result:
– Stage 1: Regulation
– Stage 2: Liberalization
– Stage 3: Deregulation
– Stage 4: Re-regulation
• What stage do you think Australia is currently located?
 Evolution of the Aviation Industry
• Following WWII the aviation industry was primarily
dominated by North America and Europe. Why?
• The other regions were focused on rebuilding and
development of local and sub-regional infrastructure.
• With the introduction of jet commercial transportation
in the 1960s and the general global development,
the aviation industry grew in capacity and safety.
 Further global development
• Following the end of the Vietnam war in the
1970s, there was extensive aviation industry
capacity and large numbers of pilots and aircraft
maintainers.
• At the same time there was a large number of
business and pleasure travelers.
• This drove a demand for rapid expansion and
competition for the global aviation marketplace.
 Stage 1: Regulations
• Until the 1970s, most of the global airline
industry was regulated

• Governments controlled air fares, routes and

market entry of new airlines
 Regulation is characterized by:
– Strict ownership control of airlines
– Limited to no competition on selected routes
– Limited markets served
– Limited city-pair frequency
– Generally higher air fares
– Government bail-outs for financially troubled airlines,
especially flag carriers
– One analyst suggested that eventually there would be
only 3 major airlines!
 Stage 2: Liberalization
• Liberalization is characterized by less government
control compared to a regulated environment
• Most countries appear to be recognizing the need for
liberalization in the airline industry with increased
bilateral negotiations between countries
• There was also significant challenges for regulators to
keep pace with the blossom of new airlines, air routes,
airports and the demand from the flying public for higher
quality and efficiency along with competitive prices.
 Liberalization continued
• According to the International Air Transport
Association (IATA), liberalization allows for:
– Expansion into new markets
– Diversification of new products
– Specialization in niche products
– Market exit for carriers not able to success
in a competitive environment
 Stage 3: Deregulation
• In the late 1970s, Government
controlled entry and price restrictions
for air carriers regain to be removed
• Airlines are allowed to serve (or not)
any given route
 Deregulation continued
• Deregulation is characterized by:
– Reduction of air fares
– Improvement in safety
– Sometimes service quality improvement
• Caveat: Small and some medium-sized
airports usually do not benefit from a
deregulated environment due to loss of
services and local financial limitations
 Stage 4: Re-regulation
• As a result of increased merger activity in recent years,
the airline industry entered formal discussions regarding
the possibility of re-regulation
• Role of government would be to prohibit predatory
pricing below actual cost
• Although the majority of the global airline industry is
considered to be deregulated, some experts argue that
there are emerging trends toward re-regulation
 Re-regulation continued
• Government is continually challenged by pressures
from the industry to be more flexible and from the
public to be more stringent
• After the last 30 years of expansions, contractions,
mergers and alliances – the aviation industry is
beginning to essentially draw-down toward that early
estimate of three major airlines or aviation alliances