The potential of air transport demand is increasingly high and many countries have undertaken expansions or introducing new initiative and innovations to their existing airport facilities and systems to accommodate this demand as well as to compete against other airports as a regional hub. However, Changi Airport managed by Changi Aiport Group (CAG), previously part of the Civil Aviation Authority of Singapore (CAAS), has successfully established Changi Airport as the world’s most awarded airport. In 1988, just seven years after it began operation, Changi Airport overtook Amsterdam’s Schipol Airport and was voted Best Airport and has since won awards continually year on year, with more than 430 awards under its belt and is ranked as the world …show more content…
The Spatial factor refers to the level of regional development surrounding and around the airport, for example, an international trade zones, convention centres, and other facilities. Facility factors are the level of facilities and the airport’s ability to expand and increased its facilities. Demand factor refers to the level of origin-destination demand and that of transit and transfer traffic volumes for hub-and-spoke network. Service factor refers to the consistency of the level of service provided to users and types of airport operations. Lastly, managerial factor refers to the economical considerations such as airport operating cost, productivity and revenue structure (Park, …show more content…
Despite the increase in expenses, Changi airport saw an increase in overall revenue by 7.4%. This is a promising figure when compare to come major gateways. It was reported that despite the booming business in the aviation industry, the truth was that 70% of airports lose money (Newton, 2013). Moreover, in accordance to ATRS statistic, Changi airport’s productivity among the Asia Pacific is ranked 6 and stands above average by 12.6% (Oum, Choo, & Yu, 2013). The above figures shows that Changi hold a rather strong ground hold in terms of its managerial factor. Changi has been successful in introducing new initiative in increasing its revenue standing and operational cost. In addition, according to Park, Changi Airport has shown to have relatively high competitive strength level in terms of it managerial competitiveness.
The airline industry is classified into four categories by the Department of Transportation. The four categories are International, National, Regional and Cargo. The following are issues that affect the airline industry to some extent: airport capacity, routes, technology, aircraft purchase or lease costs, weather, fuel costs and labor. An estimate of up to 40% of an airline’s expenses is related to paying their employees.
Challenged by an old, obsolete airport, the city of Denver decided on not only doing an expansion but ultimately building a fully dedicated facility in an entirely new location. Twice the size of Manhattan, the airport was to be the largest in the United States and was specially designed to handle concentrated hubbing traffic (Montealgre et al, 1996, p.4). The master plan encompassed a fast tracked build-design scheme that called for utmost operational efficiency which would consequently attract large airlines to choose DIA as their main Southwestern hub (Nice, n.d.). Dominance of the DIA would fuel an economic boom in Denver, but for this to take place—a fast passenger turnover would be required, leading to the perception that they had to implement an airport-wide automated baggage handling system in spite of the known risks. This critical piece of the airport wou...
The Hartsfield-Jackson Atlanta International Airport is one of the largest airports in the world and is the main hub for Delta Air Lines, one of the largest airlines in the world. This case study will examine the relationship between demand and capacity for the home hub of Delta Air Lines. Future predictions for air travel estimate enormous growth rates as high as 50% by the year 2025. Airlines, airports, and the entire air-travel infrastructure will be challenged with the task of keeping up with this level of demand as we move towards the future.
Many elements of Delta Airlines are described in detail, within this paper. There is a breakdown of the external and internal factors, using external and internal analysis. Porter’s Five forces are used to create the external analysis, and the key factors for Delta are power of buyers, and rivalry. Delta’s competitive advantages are identified as customer service, sustainability, brand image, strong strategic alliances, and corporate travel. Delta’s main issues are the low expansion in international markets, continuous changing of incentive program, and glitches within technology. Delta should expand more into the Chinese and African markets in order to gain market share within the airline industry.
Airborne should strengthen and continually improve its services domestically, since it gives larger revenues, then strengthen its alliances internationally, so as to serve the demands of the international market. To add on its profitability, Airborne should lease out a portion of the airport facilities to other airlines, so that it could have other source of income to compensate the maintenance costs of the airport.
Airport planning, once carried out utilizing a single future forecast, failed to account for the complexity and uncertainty of the aviation industry. Today, it is widely assumed airport success can only be met through the utilization of a flexible, integrated planning approach that sees forecasts as incorrect.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.
Porter stated; “for an airline to succeed in the marketplace, it must have a sustainable competitive advantage” (Porter M. E., 2008). The airline industry is the highest competitive industry, and I believe a sustainable completive advantage is essential to succeed in the future of the aviation industry. The competitive advantages that an airline embrace, needs to be based on the airlines strategy and differentiation to competitors. Emirates displays how it has a strategy and how the airline gets ahead of its competitors through how unique it is.
Airports can be considered as important national resources of most countries in the world. The main responsibility of an airport is in transportation of people and goods and in internal and global business. They are where the nation’s aviation system connects with other modes of transportation and where state responsibility for managing and regulating air traffic operations intersects with the role of governments that own and operate most airports. However, most major airports are owned and operated by the private sectors. This is due to several reasons such as to improve efficiency and economic performance, be more competitive as well as to maximize the community’s return from the airport assets in which public enterprise found out to be less efficient in term of its production and management.
Government and SIA had invested in the Changi Airport together. It includes facilities such as hangar, maintenance center, and catering center, those facilities can be used by SIA, but also the customers of other airline company. So those services in Changi airport are not unique for SIA. Airport service is valuable and important for SIA or other airlines company. Low unique and high valuable, then it is not SCAs.
As Sassen (40) defined, networks and circus are elementary of global cities, having a well–connected airport is thus critical for linkage of a city with the world as it allows intensive flows of information, people and products. Hong Kong has developed itself into an international aviation hub the holds leading position in both passenger and cargo terms. According to the Airports Council International (), HKIA ranked as number 10 and 1 as the world’s busiest airport by passenger and cargo traffic respectively. We should, of course, be proud of having such an outstanding airport as foundation of our economic success. However, other Asian cities have caught up in challenging Hong Kong’s leadership for their increasing passengers and cargo flows and expansion plan to increase capacity. To what extent the third runway, as suggested by the Airport Authority Hong Kong (AAHK), can help Hong Kong withstand such a fierce competition?
There has been a lot of controversy over the years about the federal government’s involvement and financial obligation to the airway industry. The construction of runways and taxiways are the largest development cost at hub airports and terminal development is second (Sanchez, 2006). The introduction of the Airport Improvement Plan (AIP) was the start of any significant federal funding for airports and the air industry. There has been an interest in privatization of airports and several attempts. This paper will discuss some of the basic information about the AIP and airport funding.
Commercial service airports account for roughly 522 airports in operation and have at least 2,500 enplaned passengers per calendar year along with operating scheduled air carrier service both domestically and internationally utilizing certificated airlines. The main goal of the commercial service airports is to move the most number of passengers and cargo through the
Singapore Airlines should remain competitive by providing better service and comfort to customers as in the long- term the market will grow.
Tourism is an industry, with air transport becoming an indispensable factor. One major growing trend in airline industry is market globalization. People travel to other countries for both business and leisure purposes, leading to 7% increment in air travel per year. As a market is globalized, those involved will evolve into global customers who go in search of suppliers running on global base. This leads to a growth in business travel due to the global involvement of companies in terms of investments, production chain, supply and customers. Thus, the participation of air transport in facilitating the world trade is prodigious. Aviation implements another economic benefit of the air transport by providing consumer welfare to individuals while considering the environmental brunt such as the air quality, congestion and noise in the proximity of airports. Air transport being highly demanding has doubled the passenger numbers since the 1980s and over the last decade, it has increased by 45%. The huge growth and development of the aviation field has benefitted in heaps regarding