Air Carrier Questions

Load factor is a key measure of an air carrier's operating efficiency. The load factor measures

(number of passengers on aircraft/total number of seats on aircraft) × 100

Air passenger carriers have a breakeven passenger load factor of approximately:

80%

Although air cargo moves less than 1 percent of the international tonnage, the value of the international air freight represents what percent of the total value of international freight?

26 %

The air passenger carriers' financial performance is closely linked to their load factor. What passenger load factor do the airlines currently need to achieve to break even?

80%

Air cargo carriers transport what percent of the US intercity ton-miles?

< 1%

Most, over 50 percent, of domestic cargo moves:

By all-cargo carriers such as Polar and Atlas in addition to FedEx, DHL, UPS and the Postal Service

Which independent regulator commission had the responsibility for economically regulating air cargo carriers until the industry was deregulated in 1978?

Civil Aeronautics Board

Competition within the air carrier industry can be classified as highly competitive due to:

Deregulation leading to the emergence of several low cost carriers

The demand for air cargo services is

Derived from the increase or decrease in gross domestic product (GDP)

The largest air cargo carrier in the world (including domestic and international freight) is:

FedEx

Which of the following organizations is responsible for economically regulating air cargo?

Federal Aviation Administration Civil Aeronautics Board Surface Transportation Board Interstate Commerce Commission (the answer is none of the above)

Which cost element of US combination carriers accounts for the largest portion of their operating costs?

Flying operations

The US government classifies air carriers based on the amount of revenue generated from operations. A "major" airline is one that generates:

Greater than $1 Billion a year

The operating ratio for combination carriers has recently been:

In the high 90s and sometimes over 100

The operating ratio for combination carriers is:

In the high 90s due to high variable costs (fuel, labor, maintenance) associated with flight operations

As compared to the other modes of transportation, air cargo has:

Increased at the fastest rate, in relative terms, since 1980

Two major factors fueled the growth in air cargo from 1980 through the terrorist attacks on September 11, 2001. These two factors include:

Internet and deregulation

Air carriers face intermodal freight competition from which of the following?

Motor

Despite their speed, domestic air cargo carriers confront intermodal competition. Their primary intermodal competitors include:

Motor carriers

Load factor is a key measure of an air carrier's operating efficiency. The passenger load factor measures

Number of passengers onboard the aircraft as a percent of available seats (ticketed passengers/available seats)

Integrated air cargo carriers include those that:

Perform ground and air transport

Cargo pricing is dependent mainly on:

Product density

Which of the following is the best reason that air carriers have a relatively low fixed cost structure?

Public investment in airways and airports

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?

The number of carriers did increase initially but decreased thereafter

Passenger load factor represents a key performance measure and has a major effect on the airlines profitability. The passenger load factor measures:

The percent of available seats filled with passengers

Many individuals and companies initially considered air cargo to be too expensive and a luxury. What "sold," or was used to justify, the use of air freight?

Total cost and cost trade-off analyses

Many shippers were reluctant to initially experiment with air cargo prior to World War II. As a result, the federal government attempted to promote the development of air cargo by:

Using air carriers to transport mail

A major disadvantage associated with all-cargo air carriers is:

accessibility

The major elements of air cargo include:

air mail, air freight, scheduled and air express

The majority of combination carriers' revenues arise from

passenger travel