Final

Bilateral agreements are _____________________.

Designed to establish operating and traffic rights of US airlines over foreign routes; usually provide standards for customs duties and inspection fees.

After deregulation, common carriers engaged in numerous mergers decreasing the total number of common carriers. Commuter airlines, however, followed a dissimilar pattern by reducing the code sharing agreements with majors t or f

False

Airlines currently operate und Mutual Aid Pacts T or F

False

Although airlines offer assembly and distribution service, they generally do not provide both services for the same shipment True or False

False

Historical data retrieved before September 2001 can still be used for forecasting, but the irregular fluctuations of that period must be accounted for when making industry predictions t or f

False

In order for a casual forecast to be meaningful, there needs to be a cause-and-effect relationship between both variables. T/F?

False

Over time, air cargo transportation has outperformed expectations by surpassing passenger revenues. T/F?

False

Under the RLA, the NMB has mandatory mediation control, but cannot enforce settlement T or F

False

___________ actions refer to direct changes to ticket prices.

Fare

Mergers offer airlines the advantages of _______________?

Increased market share and greater economies of scale.

Pick up and delivery service is usually performed by _______________________?

Independent local truckers

Three categories of airline costs include Direct Operating, Indirect Operating, and _________________?

Non-operating

In the late 1960's and early 1970's, scheduled carriers diverted from their two-class fare structure to a new pricing structure to ___________________

Price different demand elasticities differently.

The principle of Yield/Inventory Management holds that profits are maximized only when __________________?

Revenues are maximized

The "shot-gun" approach during the _________________ period was a marketing strategy aimed at convincing passengers to change their mode of transportation.

Sales-oriented

Why do carriers use market segmentation?

To identify customer needs To identify the target market.

Air mail grew more rapidly after the government turned operations over to private contractors T or F

True

Airline social media staff should make sure that social media strategy is "owned" by every department True False

True

Airlines can drive revenue and customer service through social media. T/F?

True

Airlines create dedicated teams in charge of social media profiles. T/F?

True

If mediation fails, parties can seek voluntary arbitration. An arbitrated decision is legally binding to both parties. T or F

True

Passengers can use Twitter to get assistance with rebooking and seat assignments: T or F

True

Since deregulation, the objectives of airline unions and managements have changed because of competition. T or F

True

Some end-to-end mergers may have facilitated completion by building a broader, more competitive network t or f

True

While IATA and ICAO both administrate international agreements, both organizations work completely independently of one another. T/F?

True

Majority-in-interest clauses deter new entrant competition with established air carriers because they a. Set unattainable lease prices for potential new competition as set by collaborating airlines b. Are strict labor union rules requiring above-industry wages to compensate for unsecure positions with new entrants c. Are exclusive-use agreements current airline operators hold to restrict new entry d. Require new airlines attain approval from incumbent airlines before lowering their price

c. Are exclusive-use agreements current airline operators hold to restrict new entry

All of the following are limitations of casual model forecasts EXCEPT a. Difficulty in quantifying variables b. Historical trends are assumed to continue c. Casual models are simplistic and unsophisticated d. Independent variables are assumed easier to forecast

c. Casual models are simplistic and unsophisticated

What is promotion? a. Carrier endorsement new products and services b. The carrier's attempt to deceive the target market to purchase their product c. Communication between the carrier and customer d. Value adding through product availability and placement

c. Communication between the carrier and customer

____are key to determining the forecasting model to use a. Variables b. Statistics c. Data d. Mathematical equations

c. Data

Pickup and delivery service is usually performed by a. The ACI b. Integrated carriers such as FedEx c. Independent local truckers d. REA

c. Independent local truckers

MGM Grand Air, a luxury air carrier, failed because a. It didn't service enough routes b. Of poor schedule frequency c. It couldn't cover overhead costs d. All of the above

c. It couldn't cover overhead costs

_________ is the process of selling existing products to new markets a. Market Penetration b. Product Development c. Market Development d. Economies of Scope

c. Market Development

This group of people often has the best insight into developing trends a. Business leaders b. Market analysts c. Sales representatives d. Target market/customers

c. Sales representatives

Freehand lines and averaging are methods used in a. Increasing variations b. Data sharing c. Smoothing d. Judgmental analysis

c. Smoothing

A(n) ____ in price will generally cause a(n) _____ in total revenue under very "elastic" demand. a. increase, increase b. decrease, decrease c. decrease, increase d. None of the above

c. decrease, increase

If a price is set above the market-clearing equilibrium level ("too high"), then the quantity demanded will be ___________ the quantity supplied, resulting in a ___________ of the product/service. a. lower than, shortage b. higher than, shortage c. lower than, surplus d. higher than, surplus

c. lower than, surplus

Airlines are beginning to spend more money on marketing because since deregulation, a. Passengers are price sensitive b. Passenger loyalty no longer exists c. The CAB no longer finances airline advertizing d. A & B e. A, B & C

d. A & B

Code-sharing can a. Make service on a route economically viable b. Stimulate traffic by providing more frequent service c. Set fares jointly d. A & B e. A, B, & C

d. A & B

Combination carriers a. Transport passengers and cargo b. Offer point-to-point service c. Play a prominent role in domestic U.S. passenger airlines d. A & B e. A, B & C

d. A & B

During the post deregulation era, unions were weak because of a. Conflicting interests b. Negative perceptions c. Decreased diversity d. A & B e. A, B & C

d. A & B

The Bermuda Agreement of 1946 a. Set up a comprehensive procedure for determining airline rates between the U.S. and U.K. b. Placed IATA in charge of rate making c. Address capacity and flight frequency limitations d. A & B e. A, B, & C

d. A & B

Hub-and-spoke operations a. Concentrate on lucrative high-density routes b. Service fewer origins and destinations c. Allow airlines to charge higher-than-average fares for certain routes d. A & C e. None of the above

d. A & C

"Promotional fares" are typically offered a. with some kind of restriction b. where load factors are below the optimal level c. to supplement the normal fare schedule d. All of the above

d. All of the above

Air freight rates are effected by a. Characteristics and volume of shipments b. Direction of travel c. Capacity restraints d. All of the above

d. All of the above

Airlines use social media for a. Brand development b. Product marketing c. improvement of the overall passenger experience d. All of the above

d. All of the above

Liberalization of international air transportation agreements were hampered in the 1980s due to a. Come foreign-flag carriers had not incentive to expand service into U.S. territory b. U.S. domestic industry instability c. Various U.S. carrier infighting over negotiations to acquire market share d. All of the above

d. All of the above

The Deregulation Act of 1978 required both the Sherman and Clayton Antitrust Act tests be used to a. Make sure prices were set to maintain competition b. Regulate the number of mergers to keep monopolies from forming c. Prohibit transactions that would substantially lessen competition d. B & C e. A, B & C

d. B & C

One way Southwest Airlines has been able to show consistent profitability is by a. Remaining non-unionized b. Using hub-and-spoke routes c. Operating its own CRS system d. Maintaining positive labor-management relations

d. Maintaining positive labor-management relations

________ describes the process by which the marketing mix is changed a. Marketing soup b. Marketing differentiation c. Marketing service d. Marketing strategy

d. Marketing strategy

A_____ is a collection of judgmental forecasts from the market a. Correlation b. Trend extension c. Causal Model d. Poll

d. Poll

The types of variations are a. Short, medium, and long-term b. Casual, time-series, judgmental, and trend extension c. Independent, dependent. Statistical, correlated d. Trend, cyclical, seasonal, and irregular

d. Trend, cyclical, seasonal, and irregular

Discounted air fares are targeted at this type of traveler a. Business b. Low-income c. Family d. Vacation

d. Vacation

The Principles that airlines should be looking at when designing their airline campaign a. Airline social media staff should make sure that social media strategy is "owned" by every department b. Airline should not react to negative response/ complaints c. Airlines should use their social media accounts actively or they should not create them d. a&c

d. a&c

What are the main objectives of airlines presence on social media? a. To increase awareness about the airline brand b. To be transparent in operations c. To engage and to interact with passengers d. all of above

d. all of above

The objective of "Yield" or "Inventory" management is to ______ ______ by _____ _____ . a. minimize cost, maximizing load factor b. maximize profit, minimizing cost c. maximize RSM, maximizing load factor d. maximize profit, maximizing revenue

d. maximize profit, maximizing revenue

The RLA applies to which industries? a. Railroad b. Motor c. Airline d. A & B e. A & C

e. A & C

Why did the number of travel agencies increase so significantly during the 1980s? a. They were considered an important part of the airline marketing distribution system b. They were able to offer lower prices through direct selling c. Their selling expertise added value to customers seeking travel accommodations d. A & B e. A & C

e. A & C

As one of the most important international commercial air transport documents, the Warsaw Convention of 1929 a. Defined international transportation b. Established liability limits for air carriers c. Set travel documentation standards d. A & B e. A, B & C

e. A, B & C

Because the airlines face intense competition, they have begun focusing their energy in a. Qualitative service b. Quantitative service c. Image enhancement d. A & C e. A, B & C

e. A, B & C

During the customer-oriented period, a. Carriers focus on increased market segmentation and intensive growth strategies b. The target-market approach is used for marketing strategy c. Carriers rely more on market research before executing marketing strategy d. A & C e. A, B & C

e. A, B & C

Integrated carriers compete by a. Offering superior service as premium prices b. Guaranteeing on-time door-to-door service c. Establishing major cargo ground facilities d. A & C e. A, B & C

e. A, B & C

The Two Freedoms Agreement a. Did not receive support from representatives b. Established the international privilege of flying across territory without landing c. Recognized the privilege of landing for nontraffic purposes d. A & B e. B & C

e. B & C

Which of the following organizations acted as a separate ground operator to help airlines provide a comprehensive express service? a. CAB b. REA c. TWA d. General Air Express e. B & D

e. B & D

GA profits correlate closely to business aircraft sales. T/F?

true

In crisis communication, sudden, smoldering and bizarre are three types of crisis. t or f

true

The primary task of the NMB is to a. Mediate b. Decide issues and make awards c. Execute the law d. All of the above

a. Mediate

Which of the following is the first maintenance efficiency goal? a. Minimize aircraft out-of-service time b. Use up time allowable on aircraft and parts between overhauls c. Seek optimum utilization of personnel and even workload d. Maximize utilization of facilities

a. Minimize aircraft out-of-service time

All-cargo airlines offer a. Point-to-point service b. Hub-and-spoke transportation c. Door-to-door transportation d. Passenger and freight service e. A & D

a. Point-to-point service

The phase-out of Stage 2 aircraft has increased the cost of entry to the airline industry by a. Reducing the supply of used aircraft b. Reducing the operating cost of used aircraft c. Reducing aircraft operating restrictions d. None of the above

a. Reducing the supply of used aircraft

IF Herb Kelleher, CEO of Southwest Airlines needs to know the estimated staffing requirements for next months, which type of forecast would he use? a. Short-term b. Medium-term c. Long-term d. Casual

a. Short-term

Revisions of the Warsaw Convention dealt primarily with a. Terms of air carrier liability b. International trade routes c. Sovereignty of airspace d. International travel documentation

a. Terms of air carrier liability

What is the objective of ground service? a. To accommodate as many flights as efficiently as possible b. To provide emergency assistance to aircraft c. Manage equipment during peak flight times d. Direct traffic of aircraft

a. To accommodate as many flights as efficiently as possible

If demand is very "elastic," a relatively _____ change in price would lead to a relatively _____ change in demand. a. small, large b. small, small c. large, small d. None of the above

a. small, large

The pursuit of an open sky policy was facilitated by _________________.

A strong industry

Until the arrival of the DC-3 in 1935, _________________ was the dominant revenue source for the US airlines.

Air mail

General Air Express was organized _______________?

By the airlines as an alternative ground operator to the REA.

North Atlantic routes account for ____ of international air traffic a. 20% b. 1/3rd c. Half d. 76%

b. 1/3rd

During the 1980s, airline-labor negations were dominated by management as a a. Hostility b. A 'Take it, or leave it' attitude c. Arms-length dealing d. Cooperation

b. A 'Take it, or leave it' attitude

RPMs and passenger revues are examples of a. Independent variables b. Dependent variables c. GNP d. A & B e. B & C

b. Dependent variables

________is a result of traveler demand for service in more then one city-pair market a. Economies of Scale b. Economies of Scope c. Product Development d. Market Development

b. Economies of Scope

Which two primary factors influence freight growth? a. Competition & technology b. Economy & rate levels c. Capacity & globalization d. New aircraft & airline investments

b. Economy & rate levels

After WWI, the International Chamber of Commerce was designed to a. Specifically issue the rights of each nation under sovereignty of airspace b. Establish a uniform code of international private commercial aviation c. Negotiate international technological standards for commercial aircraft d. Appoint the board of directors of CITEJA

b. Establish a uniform code of international private commercial aviation

The largest costs for airlines are a. Aircraft, terminal fees, and labor b. Fuel, labor, and maintenance c. Executive salaries, union retirement pay, and new-employee training costs d. CRS systems, in-flight premium services, and labor

b. Fuel, labor, and maintenance

A major goal of promotion is to a. Identify the balance between demand and supply factors b. Inform the target market that services are available c. Provide entertainment, service, and amenities d. A & B e. A, B & C

b. Inform the target market that services are available

If john MacLean, VP of American Airlines Purchasing needs to forecast demand for route-planning over the next few years, what type of forecast would he use? a. Short-term b. Medium-term c. Long-term d. Casual

b. Medium-term

Container rates a. Charges higher rates for containerized shipments b. Offers lower rates for containerized shipments c. Gives lower rates to consolidated shipments d. None of the above

b. Offers lower rates for containerized shipments

The ICAO a. Focused on the promotion of safe, regular, and economical air transport b. Sets international standards and practices c. Stipulated military routes to be shared by civil aircraft d. All of the above

b. Sets international standards and practices

The Paris Convention of 1919 recognized a. That aircraft may hold title to several nationalities after following specified registration procedures b. The desirability of freedom of international air navigation c. That under sovereignty of airspace each nation held the right to develop their own national rules for signals, lights, and landings. d. All of the above

b. The desirability of freedom of international air navigation

____shows a dependent variable as a function of time a. Casual forecast b. Time-series analysis c. Judgmental forecast d. Long-term forecast

b. Time-series analysis

If a price is set below the market-clearing equilibrium level ("too low"), then the quantity demanded will be ___________ the quantity supplied, resulting in a ___________ of the product/service. a. lower than, shortage b. higher than, shortage c. lower than, surplus d. higher than, surplus

b. higher than, shortage

A change in the "price" determinant of demand would typically result in a change in a. demand b. quantity demanded c. supply d. quantity supplied

b. quantity demanded

Pricing tactics or adjustments can be broadly categorized as either a. "fare actions" (changes in price) or b. "schedule actions" (changes in route structure) c. "rule actions" (changes in rules or restrictions) d. "cost actions" (changes in cash outlay structure) e. "marketing actions" (changes in possession utility through advertising etc.)

c. "rule actions" (changes in rules or restrictions)

Economies of scope award competitive advantages to a. Large carriers b. Low-cost carriers c. Scheduled common carriers d. Economy class travelers

a. Large carriers

Fixed costs account for __% of total costs in the airline industry a. 10-20% b. 40-50% c. 75% d. 80-90%

a and d

Labor and Fuel costs generally represent about __% of a carrier's operating expenses a. 50% b. 65% c. 75% d. 90%

a. 50%

The "mission of scheduling" is a broad term which generally focuses on the idea that airline management must continually search for the balance between ______ and ______ for the company. a. Adequate service, economic strength b. Efficient route schedules, profitability c. Maximum capacity, proper safety d. Traditional approaches, innovative improvements

a. Adequate service, economic strength

In-service equipment assignments refer to those aircraft being flown... a. All of the above b. On scheduled service c. As an extra section d. As a charter flight

a. All of the above

Korean Air, Lufthansa, and Air France are classified as a. Combination carriers b. Integrated carriers c. All-cargo airlines d. Air-freight forwarders

a. Combination carriers

How often are en-route service inspections for a jet aircraft? a. Each stop b. Every hour c. Every 8 hours d. Every 12 hours

a. Each stop

The U.S. offered foreign carriers the right to operate more international routes within United States territory to a. Encourage greater pricing and operating flexibility for American carriers b. Establish early forms of open-sky agreements c. Incentivize U.S. and foreign carriers to use antitrust immunity to expand international aviation d. Recapture financial losses in the aviation industry

a. Encourage greater pricing and operating flexibility for American carriers