AIR TRANSPORT TOURISM NEXUS A DESTINATION MANAGEMENT PERSPECTIVE

Maya Ivanova
AIR TRANSPORT – TOURISM
NEXUS:
A DESTINATION MANAGEMENT
PERSPECTIVE

Maya Ivanova (2017). Air transport-tourism nexus: A destination management perspective. Varna: Zangador Page 1 of 210
Maya Ivanova
AIR TRANSPORT – TOURISM NEXUS:
A DESTINATION MANAGEMENT PERSPECTIVE

First published 2017
by Zangador Ltd
Cover design by Milena Babukchieva
ISBN: 978-954-92786-4-4
Reference:
Ivanova, Maya (2017). Air transport – tourism nexus: A destination management perspective. Varna:
Zangador.
This work is licensed under the Creative Commons Attribution-
NonCommercial-NoDerivatives 4.0 International License. To view a copy of
this license, visit https://creativecommons.org/

PREFACE
The aim of current research monograph is to provide a deeper view of the complex
relationship between the air transport and tourism industries. The adopted point of
view a destination perspective enables one to go into a more detailed exploration
of the topic and to consider issues that usually remain invisible at the strategic
managers level. The elaborated destination analysis framework and the identification
of common points between aviation and tourism set the groundwork for further
examination of the air transport-tourism nexus. Therefore, the book would be useful
both for students and researchers in the field of tourism, hospitality and destination
management, and for practitioners and destination management representatives who
may find interesting insights and ideas for improvement. The monograph would be
suitable also for managers and representatives from the air transport industry by
providing them with the other point of view that of the local tourist destination to
consider in their strategic growth and negotiation process.

ACKNOWLEDGEMENTS
The author acknowledges many people for their support in writing this research
monograph, namely:
 The two reviewers, Professor Maria Stankova (College of Tourism,
Blagoevgrad) and Associate Professor Velina Kazandzhieva (University of
Economics Varna), for their valuable comments and recommendations for the
improvement of the book;
 All participants in the empirical research, who were very kind and helpful in
sharing their time for the research;
 My husband, partner and colleague in the tourism field, Professor Stanislav
Ivanov from Varna University of Management, Bulgaria, for his continuous
support and love; and
 All my family, friends and colleagues from VUM, who always stood by me and
helped with encouragement and care.

AIR TRANSPORT – TOURISM NEXUS:
A DESTINATION MANAGEMENT PERSPECTIVE
TABLE OF CONTENTS:
PAGE
List of Tables 7
List of Figures 8
List of Text Boxes 9
List of Abbreviations 10
Introduction 11
Chapter 1 Air transport essentials 14
1.1 General and historical overview 14
1.2 Air transport system models and participants 19
1.2.1 Airlines and Air Alliances 23
1.2.2 Airports, ATM, Safety and Security 38
1.2.3 Aircraft producers/manufacturers 52
1.3 Regulation of the air transport 55
1.4 Sustainable development and concerns of aviation 64
1.5 Technology in the air transport 72
Chapter 2 Destination Management 79
2.1 General overview 79
2.2 Destination Cake Model 84
2.3 Destination management, DMO, destination governance 98
2.4 Destination attributes 106
Chapter 3 Air transport-tourism nexus 116
3.1 Role of transport for the destination 116
3.1.1 Destination accessibility 118
3.1.2 Destination local transport system 123
3.2 Air transport destination relationship and mutual impacts 128
3.2.1 General comparison 129
3.2.2 Analysis of common points by layers 136
3.3 Air transport and destination management planning processes 145
3.3.1 Airlines planning process 146
3.3.2 Destination development planning process 149
Chapter 4 Case study – Bulgarian Black Sea coast and the role of air
transport in its development
155
4.1 Destination Cake model analysis of the Bulgarian Black Sea Coast 155
4.2 Methodology 168
4.3 Results and Discussion 174
4.3.1Secondary data 174

4.3.2Primary research 177
Concluding remarks 187
Appendices 189
References 196

LIST OF TABLES
NUMBER NAME PAGE
1.1. Historic development of air transport 16
1.2. Top ten airlines by number of passengers carried for 2015 24
1.3. Top ten airlines by traffic 25
1.4. Top ten airline groups according revenues in 2015 26
1.5. Distribution of passenger flows/traffic among the main
business models
26
1.6. Distribution of passenger flows by regions/continents 26
1.7. Top 20 Low-cost and leisure airlines by passenger number 2015 32
1.8. Main facts about the three global airline alliances 37
1.9. Top 10 World Airports by number of passengers, 2015 40
1.10. World airport ranking by total aircraft movements (landing
and take-off) 2015
40
1.11. Academic research on the air transport liberalisation in
geographical context
64
2.1. Dimensions and elements of destinations. 87
2.2. Summary of activities of the DMO, categorised either as
External destination marketing (EDM) or Internal destination
development IDD activities
104
3.1. Papers, dealing with air transport impact on tourist
destinations
134

LIST OF FIGURES
NUMBER NAME PAGE
1.1. System of aviation industry 20
1.2. The aviation system 21
1.3. Air transport industry model 23
1.4. Impacts of aviation on the atmosphere 66
2.1. Destination Cake Model 86
2.2. Destination Management activities 100
2.3. Destination Development and Management Model 102
3.1. System Model of air transport and tourism 137
3.2. Time horizons of flight planning 146
4.1. Flights/movement on Varna airport for the period 1998-2016 161
4.2. Flights/movements on Bourgas airport for the period 1998-2016 162
4.3. Varna vs Bourgas number of movements for the period 1998-
2016
163
4.4. North vs. South Black Sea Coast dynamics in the number of
beds for the period 1994-2015
165
4.5. Passenger flow and tourists in the North Black Sea Coast for
the period 1998-2015
175
4.6. Passenger flow and tourists in the South Black Sea Coast for
the period 1998-2015
176

LIST OF TEXT BOXES
NUMBER NAME PAGE
1.1. SESAR the project of EU 48
1.2. International Civil Aviation Organisation /ICAO 57
1.3. International Air Transport Association /IATA 58
1.4. Institutions and agencies, dealing specifically with
environmental issues
69
2.1. Tourism characteristic services 94
2.2. The 10 Attributes of successful destinations 112
4.1. Varna Airport 158
4.2. Bourgas Airport 159

LIST OF ABBREVIATIONS
ACI Airports Council International
AEA Association of European Airlines
AFRA Aircraft Fleet Recycling Association
ATAG Air Transport Action Group
ATC Air Traffic Control
ATM Air Traffic Management
BBSC Bulgarian Black Sea Coast
BSC Black Sea Coast
BCAA Bulgarian Civil Aviation Administration
CAEP Committee on Aviation Environmental Protection
CANSO Civil Air Navigation System Organisation
CED World Centre of Excellence for Destinations
CRS Computer Reservation System
DMO Destination Management Organisation
EASA European Aviation Safety Agency
ECAC European Civil Aviation Conference
EDM External Destination Marketing
ELFAA European Low-Fare Airline Association
EU European Union
FAA Federal Aviation Agency of the USA
GDS Global Distribution System
IATA International Air Transport Association
ICAO International Civil Aviation Organisation
IDD Internal Destination Development
IPCC Intergovernmental Panel on Climate Change
IRTS International Recommendations on Tourism Statistics by UNWTO
LCC Low-cost carrier
MBM Market-based Measures
NSI National Statistical Institute, Bulgaria
OTA Online Travel Agency
RBV Resource-Based View
RPK Revenue per Passenger Kilometre
SESAR Single European Sky ATM Research
SITA Société Internationale de Télécommunications “éronautiques
SMED System of Measures for Excellence in Destinations
UNFCCC United Nations Framework Convention on Climate Change
UNWTO United Nations World Tourism Organisation
WTTC World Travel and Tourism Council

INTRODUCTION
Transport and tourism have always been inherently connected. Moving from one
point to another has pushed a man to create vehicles and mechanisms, thus enhancing
the human civilisation. For ages, people have been travelling with different motives
and for different purposes, such as nomadic movements, military invasions,
pilgrimages, and finally for business and leisure reasons. A transport system is a vital
part of any economy, providing opportunities for the movement of materials, goods
and people from one place to another. It is often likened to the circulatory system of
the economy. At the same time, the different modes of transport have enabled people
to travel and exchange products and ideas, thus driving the whole progress on. The
evolution of the transport system has been going on in parallel with human economic,
social and cultural development. Air transport, being the youngest sector of
transportation modes, currently appears to be a vital part of modern life. Around 3.5
billion passengers used air transport for their business and tourism trips in 2015: this
number surpassing by 6.4% the number of the previous year (ICAO, 2016b). Over half
of the world s . billion tourists (54%) currently arrive to their destinations by air
(UNWTO, 2012). More than 27 000 commercial aircraft, belonging to around 1400
commercial airlines, serve more than 52 000 routes around the world (ATAG, 2016).
Around 10 million passengers per day use air transport services, and a total of 627
million jobs are thus supported (ATAG, 2016). Those impressive numbers make air
transport a major contributor to global economic prosperity, and in particular, to the
global tourism industry.
In recent centuries, the rise of the tourism industry highlights how important it is for
humans to travel. More recently, nobody doubts that the development of tourism is a
necessity. Nowadays there are more than 1.1 billion tourist arrivals per year, and the
expectations are that they will grow by 3.3% a year to reach a total of 1.8 billion arrivals

in 2030 (UNWTO, 2012). Tourism industry contributes about 9.8% to the total world
gross domestic product, and the number of total jobs it creates exceeded 284 million
for the global economy in 2015 (WTTC, 2016).
Almost since its creation, aviation has been indispensable for the tourism industry
(ATAG, 2016). The contribution of air transport to tourism development has been
mentioned in multiple studies and books concerning solely air transport O Connell
and Williams, 2011; Belobaba, Odoni and Barnhart, 2009; Schmitt and Golnick, 2016;
Doganis, 2006; Wittmer, Bieger and Mueller, 2011; Peoples, 2014) or the tourism
industry (Goeldner and Ritchie, 2007; Page, 2009). Although some of them (e.g. Duval,
2007; Graham, Papatheodorou and Forsyth, 2008; Page, 2009) tackle the link between
the two industries, the perspective is usually general and at the macro level, or they
explore only general impacts. Surprisingly, the relationship between air transport and
tourism at the destination level is often overlooked (Prideaux, 2000; Lew and
McKercher, 2005). Transport and tourism studies previously published lack deeper
analysis of the connections between the components of the two industries in order to
outline more specifically the particular mutual impacts. Despite the numerous
reported cases regarding air transport impact on a particular destination (Sengur and
Hemdil, 2014; Laplace and Latge-Roucolle, 2016; Dobruszkes, Mondou and Ghedira,
2016; Njoya, 2013, etc.), a conceptual framework, encompassing all common elements
of both industries and considering the complex relationships between them is still
missing.
Therefore, in light of the above reasoning, the main purpose of the current monograph
is to elaborate on the relationship between the air transport sector and tourism
industry, providing the perspective from destination management level, i.e. the micro
level. Understanding the air transport-tourism relationship would contribute
important implications for transport and infrastructure development, tourist product
development, destination planning and infrastructure, management of tourist flows

and destination accessibility, and, ultimately, management of the external social,
environmental, economic and cultural effects on tourism at the destination. In this
regard, each industry is analysed separately outlining the important issues and
relations. Finally, the nexus between air transport and tourism industry is deeply
explored and illustrated with a real destination.
The first two chapters explore each of the parties, analysing the components and
stakeholders, always in the context of tourism. Both chapters examine the static picture
of air transport and destination management, whereas the third chapter examines their
mutual impact, namely the relations between each of the stakeholders, the dynamics
of their collaboration, and finally the process of initiating and accomplishing a
partnership between them. The latter is studied in depth with a special focus on the
role and position of each of the parties, with the ultimate goal of identifying their
impact on the development of the tourism industry in a certain region or destination.
In the fourth chapter, a particular destination is researched the Bulgarian Black Sea
coast applying the theoretical framework that was elaborated on in the previous
chapters.
The whole study adopts the supply side perspective for both the air transport system
and destination management. In this way the book would also serve as a useful tool
for managers and DMOs in their elaboration of strategy regarding air transport.
Therefore, the customers demand position is only briefly implied and taken into
consideration.

Chapter 1
AIR TRANSPORT ESSENTIALS
1.1 General and Historical Overview
Air transport provides a worldwide network and has become a global industry more
than 58 million jobs and US$2.4 trillion of the world GDP are directly supported by the
air travel industry (Airbus, n.d.). Many stakeholders are involved part of the air
transport supply chain aircraft manufacturers, airlines, airports (including airport
operators), ground services, air navigation services, but also other institutions and
organisations, including tourism and other affiliated industries.
In this chapter we make a general overview of the air transport industry and explore
the air system and its major players. Analysing each of them would allow us to see the
whole picture of the industry its environment, participants, and main stakeholders,
internal and external issues that the participants are currently confronting and
finally, to identify the aspects that are common with the tourism industry.
The air transport could be analysed through several lenses. First of all, it could be
considered as a separate industry, and a sub-sector of the transportation industry. As
such it could be explored in the contexts of cargo or passenger aviation, military,
agrarian and general aviation. However, this book is focused on exploring
predominantly passenger air transport, which is in direct relation with the tourism
industry; therefore, military, cargo, agrarian and general aviation industries remain
beyond the scope of the study.
Air transport is inherently connected with tourism, providing ground for its
development. Undoubtedly both industries develop in parallel, and any events taking
place in either of them have an impact on the other. The historical evolution of both

sectors reveals this dramatic interdependence. The demand for transport derives from
people s desire to go somewhere in order to be engaged in spatially constrained
activities (including leisure and business tourism), and conversely, transport
accessibility determines, to a great extent, the demand for a tourism destination
(Graham et al., 2008). Thus, these two sectors of the economy are structurally
interdependent (Papatheodorou and Zenelis, 2013). In this regard, exploring the
historical development of aviation would shed light on the parallel evolution of the
tourism industry and would reveal some of the connections between them, together
with the reasons behind them.
Air transport evolution could be explored from several aspects, depending on the
focus of the study technical, operational, marketing, legal, etc. (See Table 1.1). The
facts and events, however, are so entangled and interdependent that sometimes it is
difficult to estimate which is the primary cause and which is the consequence.
Moreover, most of them happen almost simultaneously or in a very short period of
time. Usually, the development of air transport is traced in reference to:
 aircraft characteristics (design, engines, ability for long range distance, speed
and manoeuvrability, aircraft materials),
 aircraft safety (especially important to promote passenger transport),
 air transport operations, especially Air Traffic Control,
 the development of civil transport operation airlines and airports,
 regulation and standardisation of the sector, including chronology of legal acts,
conventions, treaties, and establishment of relevant institutions.
If we consider all of them, we will need an entirely new study to address all details
along the evolution. In order to reveal the most important facts of aviation history, and
still adhere to the primary purpose of the book to examine the correlation between air
transport and tourism industry, we chose to compile the essential moments of air
transport evolution and show in parallel how they influenced (directly or indirectly)
the tourism development.

Table 1.1 Historic Development of Air Transport
Time period/Date Key fact Impact on air transport
Impact on tourism
industry
Ancient time,
Middle ages and
Industrial
revolution till the
end of 19th
century (2000 BC
1900)
Mainly road and water
transport used because of
very low advance of
technologies; no any
travel by air
No air transport at all Sporadic trips, mainly
related to pilgrimages,
aristocratic trips for
leisure, administrative
and military trips
1903 Wright Brothers fly for
the first time
Air transport is born Another way of
travelling possibility
for greater number of
people to move
around
1909 Louis Bleriot, France,
crossed the English
Channel by air;
DELAG (Deutsche
Luftschiffahrts-
Aktiengesellschaft) was
founded the first regular
airline
Diverse new flying
vehicles invented;
governments show
interest in the
development of air
transport
Scarce passenger
flights, dedicated to
the richer elite
1913-1919 World War I;
First all-metal aircraft:
Junkers F 13;
The first airlines were
founded KLM, Qantas,
Avianca, Czech Airlines
Air transport used mainly
for military purposes.
Bulgaria was the first to
use an aircraft for military
purposes
Almost no tourism
activities, because of
war time
1920-1940
1927
Air transport used mainly
for mail delivery;
Charles Lindbergh
performed the first
transatlantic flight: New
York Paris
The first intercontinental
and international air
transport started and
developed
Passenger traffic
increased with the
safety advancements
1944 The central convention in
the field of international
air law is the agreement
concerning international
civil aviation, reached on
7 December 1944
(Chicago Convention)
Due to its universal
character, the Chicago
Convention is the
fundamental policy for
post-war development of
international civil
aviation. Following the
agreement, the
International Civil
Aviation Organisation
(ICAO) was established.
Air transport
regulation facilitate
international travel.
1947
1952
The first supersonic flight
takes place with Charles
Yeager as pilot;
Intense technical
development in the after-
wars period for the air
USSR s “eroflot
became the first airline
in the world to operate

First British jet flight &
first civil jet transport
aircraft, the COMET
regular flights.
industry. The supersonic
aircraft and ongoing
inventions stimulate the
aircraft producers and
airlines. The new political
scene (the Cold War)
provide a large field for
the establishment and
development of national
flag carriers.
sustained regular jet
services, with the
Tupolev Tu-104, on 15
September 1956.
Boeing 707, which
established new levels
of comfort, safety, and
passenger
expectations, ushered
in the age of mass
commercial air travel,
as it is enjoyed today.
1969-1974
1970s
First flight of Boeing 747
Jumbo Jet ;
First Concorde flight;
First Airbus A30 flight;
First low-cost carrier
(South West Airlines)
founded in the US in
1971;
First supersonic aircraft,
such as the Concorde or
the Russian Tupolew TU-
144, were introduced to
the market in the mid-
1970s.
The era of the jet engine,
huge fuselages, bigger
capacity, flourishing
airlines/national carriers
Enormous push for the
development of mass
tourism. Bigger cabin,
bigger number of
passengers, faster and
more comfortable
travel
1978 Deregulation of airlines in
the USA:
Airline Deregulation Act
of 1978
Increased competition
among US airlines,
leading to new entrants,
reduced prices and
increased passenger flow
Prices of airfares sank
by 22% on average
between 1978 and 1993
(Morrison and
Winston 1997). As a
consequence, larger
number of passengers
were able to travel
1982-1986 Continuous airline
deregulation around the
world, impacting more
countries.
Major airlines establish
and reaffirm hub-and-
spoke system;
Construction of alliances
and cooperation;
Expansion of airline
computer reservation
systems (CRS);
Rise of code-share and
capacity management;
Revenue
management/Yield
management has be
deployed
The increased number
of flights and air
connections after
deregulation also
meant that customers
had a greater choice of
offers to choose from.
Consumers have
benefited distinctively
from lower flight
prices and higher
service offerings.
1990-2000 European deregulation
takes place, but at slower
pace.
Enhanced competition
within the EU;
Low-cost airlines emerge
in Europe.
Increased air travel
within the EU,
enhanced by Schengen
agreement for free

movement of EU
persons.
2001-2003 First autonomous,
unmanned flights take
place;
Online sales and
distribution become the
norm.
New technological era
starts for the air transport
industry; Computers and
electronics become
indispensable part of the
aircraft and ATM;
Shift to direct sales
through internet.
Online reservations
allow an easier way
for people to arrange
their trips, including
air travel.
11 September
2001
Terrorist attack against
the US by 5 airplanes
Crisis in the sector; Tough
measures for safety and
security
Shock for the tourist
industry decrease in
travel
2000- Open-skies agreement
and similar acts provide
wider field for airline
operations.
Rise of the low-cost
carriers;
Continuous process of
mergers and acquisitions
among airlines
More intensive tourist
flows between the EU
countries, rise of
individual short trips
and unorganised
travel.
Sources: Schmitt and Gollnick (2016); Gross and Klemmer (2014); enlarged and adapted by the author
Another approach is to examine the historical development of the air transport
industry in several stages, outlining the main phases of the technological and political
organisation of the sector (Wittmer and Bieger, 2011a). However, the periods are
chosen according to authors subjective perception of air transport s historical cycles
which again depend on the specific aspect referred to. Below are the aviation
evolutionary stages as seen by Wittmer and Bieger (2011a):
 Technical development 1783 1929
 Political development 1929 1944
 Development of quality and cost 1945 1973
 Networks, alliances and low-cost operations 1974 1990
 New perspectives customer value 1991 2010
(Wittmer and Bieger, 2011a)
The overview of the historical development proves the inherent connection of tourism
and aviation, but also calls for a more detailed examination of the operation of the air
transport players in order to identify first the links between them and then the

consequent interaction with the other industries. That is to be done in the following
sections which examine the air transport system.
1.2 Air Transport System
The core service of air transportation is to enable people to travel from one point to
another by using air vehicles. In this process, however, a number of participants and
stakeholders are involved, playing certain roles in the sector. In order to encompass all
of them, in the following pages we explore several models to illustrate the air transport
system, and outline each one s contribution and differences from the others. The final
goal is to reach a comprehensive view of the air transport system, which will serve as
a basis for a deeper analysis of its components.
Among several models (Schmitt and Gollnick, 2016; Pompl, 2007; Wittmer and Bieger,
2011a; Bieger and Wittmer, 2011b), we chose to explore in detail the Pompl (2007) and
the Bieger and Wittmer (2011b) illustrations of the air industry system.
In the model elaborated by W. Pompl (See Figure 1.1), the central focus is the primary
mission of air transport, which is to allow passengers and goods to move by air from
one point to another. That is why the main players here are the airlines, together with
their distribution network, and customers are the ultimate users. The core actually
illustrates the air transport supply chain, presented in a simplified way, with an
emphasis on the close links between the airlines and their distribution channels. As
most of the airline distributors are predominantly travel agencies and tour operators,
thus air transport is indirectly related to the tourism industry.

Figure 1.1. System of the aviation industry, based on Pompl (2007)
The rest of the aviation industry participants are depicted by the external stakeholders,
each with their particular impact on the core operation. The model implies that aircraft
manufacturers, ATM companies and airports actually take the role of facilitators and exist
only because of the airlines and the need for air transportation service to be provided,
although all of them are directly connected to the process of air transportation. The
airlines have a leading role, leaving more secondary roles for the other participants. In
this way the ground handlers, aircraft manufacturers, national governments and
institutions, air navigation services, etc. are considered external for aviation. Although
their impact is noted as important, they remain outside of the core supply chain
relationship: Airlines-Distributors-Customers. The most important contribution of the
Airlines
Intermediaries
Customers
.....
International
Organisations
Aircraft
Industry
Private
organisations
and interest
groups
Infrastructure
and service
providers
Financial
Institutions
National
aviation
administration

model stems from its focus on the primary function of the air sector while most of the
stakeholders are either centrally or peripherally depicted. One drawback that could be
pointed out is that other air transport players roles are neglected the airport, the air
navigation systems, the aircraft producers from the ultimate transportation product.
Figure 1.2 The aviation system, based on Bieger and Wittmer (2011b)
The second model, created by Bieger and Wittmer (See Figure 1.2), depicts the air
transport system in a classic supply and demand format. The authors initial idea of
(see Wittmer and Bieger, 2011a) to present the air transport supply chain has been
upgraded to that model we may explore it as the visible and invisible sides of the
industry from the customer s perspective. The supply side encompasses all aviation
actors airlines, airports, aircraft manufacturers, ground operators but also
regulators and air alliances, which are organisations not directly involved in
transportation, but who contribute significantly to the smooth operation of the
industry. The demand perspective takes the view of the customers, considering them
not as pure passengers, but differentiated according to their motivation for travel
business or personal. Additionally, travel organisers (tour operators) and
intermediaries (travel agencies) have been included for their intermediary connection
Aircraft
producers
Airports
Airlines
Ground
services
Industry
association
s
Regulators
Social
systems
Economic
systems
Technological
systems
Ecological
systems
Regulatory
systems
Leisure
Customers
Business
Customers
Tour
Operators
Travel
Services
Market
Supply System Demand System

between the air transport industry and the customers. It is the Market which unifies
the Supply and Demand actors and makes the balance between them. Both parties bear
the impact of the external factors, including political, economic, ecological, social and
technological systems. The most prominent contribution of this model is in presenting
the demand perspective, i.e. both the passengers and the major players from the
tourism industry tour operators and travel agents. Thus, the authors imply the direct
connection between air transport and the tourism industry. Another insight of the
model concerns the external environment factors (the so called PESTEL factors
Political, Economic, Socio-cultural, Environmental, and Legal) and their impact on the
air transport operations.
Each of the two models presents a different perspective of the air transport industry
(stakeholder and market view) that could be further developed and enriched.
However, for the purpose of this book we need a simpler model of the air transport
industry, focused only on the main players who will also have a stake in tourism
development (See Figure 1.3). The elaborated model will facilitate the following
analysis of the air transport industry and the later identified interactions with the
tourism industry. The main participants are explicitly distinguished, and these are
Airlines, Airports and Aircraft producers. The other, more secondary players are
affiliated to the relevant major ones: Air alliances to the airlines, Air traffic management
companies to both airlines and airports, because they have mutual interactions, and
Safety and security companies are connected to all of the participants because of their
universal role throughout the whole sector. The macro environment is presented only
by three factors: Ecology/Environmental issues, Regulations and Technology. The Political
and Economic factors are covered by Regulations because of the international nature
of air transport, and the Socio-cultural factors almost entirely overlap with the relevant
tourism industry external impacts, therefore they will be explored in detail in the next
chapter (Chapter 2.)

The proposed model of air transport system provides a predominantly static picture,
where the focus is on the main participants and the environment in which they
operate, and only the connections and relations within the air transport are studied
and analysed. However, the sector is not isolated; on the contrary, it is deeply rooted
within most of the other industrial sectors, including tourism. Therefore, for the
purpose of the current study, the air transport analysis will be made in the context of
the tourism industry, with the main focus on the sector itself.
Figure 1.3 Air transport industry model
1.2.1 Airlines and Air Alliances
Airlines provide the core service for the air transport industry in that they allow
passengers to travel from one point to another. Therefore, airlines role is crucial for
the travel and tourism industries. On a global basis the number of tourists is growing
from 277 million in 1980 to 528 million in 1995 and has exceeded 1 billion in the last
few years (UNWTO, 2012 Aviation Report). More than half of them use air transport

to reach their final destination. In 2015 over 1500 airlines transported 3.5 billion people,
with a fleet of 26,000 aircraft, averaging 104,000 flights a day over a global network of
51,000 routes (IATA, 2016, Annual Report 2016). The volume of operation determines
a significant role of airlines not only for the tourism industry but for any other sectors
using air transport.
As initially stated, in this current book we will explore only those airlines concerning
the tourism industry, i.e. commercial civil aviation (excluding military and non-
commercial flights), accessible-to-public flights (not private corporate or general
aviation), and only passenger aviation (excluding cargo or agrarian). Hence, the focus
of our study will be civil passenger airlines, operating on a commercial basis. Further, those
airlines may be additionally classified according to a number of criteria deriving from
their operations, such as the number of passengers carried (Table 1.2), traffic,
measured in RPK (Revenue per Passenger Kilometre) (Table 1.3), volume of sales
(Table 1.4), worldwide distribution of operation (Table 1.6), or any other metrics and
indicators, all of which demonstrate an aspect of an airline's performance. However,
the performance is the final result and the outcome of airlines operations. In order to
understand airlines principles of operation, a deeper overview is necessary.
Table 1.2 Top ten airlines by number of passenger carried in 2015
Rank Airline Number of passengers (Million)
1 American Airlines 201.2
2 Delta Air lines 179.4
3 Southwest Airlines 144.6
4 United Airlines 140.4
5 Ryanair 106.4
6 China Eastern Airlines 93.8
7 China Southern Airlines 84.0
8 Lufthansa 79.3
9 EasyJet 68.6
10 Air China 58.8
Source: Flightglobal, Flight Airline Business magazine (July-August, 2016)

Analysis of airlines could be implemented from various perspectives: examining
airline economics, estimating supply and demand, reviewing operating costs and
measure, following the process of planning, optimisation and operation of the airline
services, following the sequence of activities involved in the operations, in search of
excellence and higher efficiency (Belobaba, 2009a). Still, the most popular criterion for
airline examination appears to be the business model adopted (Schmitt and Gollnick,
2016; Wittmer and Bieger, 2011a; Papatheodorou and Zenelis, 2013; Gross and
Klemmer, 2014). A similar classification is launched by Page (2009). He groups the
airlines according to the three types of air services provided scheduled service,
chartered flights or scenic flights (See Table 1.5).
Table 1.3 Top ten airlines by traffic RPK (Revenue per Passenger-Kilometer)
2015 2014 Airline Country Traffic
(RPK)
Million
Seat
capacity
(Million)
Load
factor
(%)
Passenger
(Million)
Current
fleet
1 1 American Airlines USA 358.823 432.396 83.0 201.2 1269
2 3 Delta Air Lines USA 337.264 397.034 84.9 179.4 950
3 2 United Airlines USA 335.728 402.342 83.4 140.4 719
4 4 Emirates Airline UAE 255.176 333.726 76.5 51.9 251
5 5 Southwest Airlines USA 189.057 226.067 83.6 144.6 702
6 6 Lufthansa Germany 162.173 202.314 80.2 79.3 338
7 9 China Eastern Airlines China 153.749 188.740 81.5 84.0 505
8 10 China Southern Airlines China 146.291 181.792 80.5 93.8 411
9 7 British Airways UK 142.016 174.274 81.5 43.3 269
10 8 Air France France 141.207 167.969 84.1 49.5 226
In general, each airline may simultaneously offer two or all of the options
(scheduled/regular or non-scheduled flights), but as each service requires conceptually
different resources and management, most airlines prefer to specialise in only one of
the alternatives. The predominant provision of services determines the relevant
business model for each airline: network/traditional airlines, charter airlines and the
new invasions low-cost carriers (LCCs). Each model influences the tourism industry
in a different way, which is to be specifically examined.

Table 1.4 Top ten airline groups according to their revenue in 2015
2015 2014 Group/Airline Country Revenue (Million USD)
1 1 American Airlines USA 40 990
2 2 Delta Airline USA 40 704
3 4 United Continental USA 37 864
4 3 Lufthansa Group Germany 35 351
5 5 Air France-KLM Group France 28 741
6 6 FedEx USA 26 451
7 8 Emirates Group UAE 25 282
8 7 IAG UK 25 207
9 9 Southwest Airlines USA 19 820
10 10 Chine Southern Air China 17 754
Table 1.5 Distribution of passenger flows/traffic among the main business models
Airline Type Traffic (RPK)
(million)
Load factor
(%)
Passengers
(million)
Employees
(share)
Leisure* 219 032 88.9 78 2%
Low-cost 1 127 189 85.1 862 12%
Mainline* 4 862 269 80 2 169 85%
Regional 104 259 82.2 107 1%
TOTAL 6 302 749 81.2 3 215 100%
* In the context of current book terminology Leisure is associated with Charter airlines, and Mainline
is associated with Network/Traditional airlines
Table 1.6 Distribution of passenger flows by regions/continents
Region Traffic (RPK)
(million)
Load factor
(%)
Passengers
(million)
Employees
(share)
Africa 92 818 68.2 34.3 4%
Asia Pacific 1 954 254 79.6 1 035.1 34%
Europe 1 714 827 83.2 867.6 22%
Latin America 273 305 80.0 180.9 8%
Middle East 508 380 77.1 173.3 7%
North America 1 669 165 83.7 923.8 25%
TOTAL 6 302 749 81.2 3 215.0 100%
Network/traditional airlines
Traditional airlines, also known as international passage airlines , major airlines ,
network carriers , full-service carriers , traditional or established airlines , flag

or national airlines , or legacy carriers (Gross and Klemmer, 2014) (all terms
hereafter will be used interchangeably), represent the oldest type of air travel services,
based on the evolutionary development of the sector. Historically, the network carriers
find their origins in the political roots of aviation (Papatheodorou and Zenelis, 2013).
In the dawn of aviation regulation, bilateral agreements were highly dependent on
political negotiations, especially after the introduction of regular jet flights. It was a
matter of dominance for national airlines to establish and develop their international
network, and therefore, national governments heavily subsidised them (Schmitt and
Gollnick, 2016; Doganis, 2006). Many airlines were established and regulated by their
national states. That is why today s most prominent representatives of traditional
airlines started as national flag carriers Lufthansa, British Airways, Nippon Airways
(Japan), Czech Airlines, Air France/KLM (France and the Netherlands respectively),
Aeroflot (Russia), etc. Nevertheless, state support was seriously affected with the
introduction of the deregulation processes, which started in the USA in 1978, followed
by Europe and Asia a decade later. After the air market was liberalised, airlines lost
any subsidies and were forced to become more competitive and customer-oriented
(Doganis, 2006). As a result, the network airlines found themselves relying solely on
the market conditions, and thus they created their fundamental pattern of operations
the so-called hub-and-spoke system. In this configuration, a central airport, called
a hub , concentrates short and medium-haul flights coming from regional and
remote airports, named spokes , whose main role is to feed up with passengers to the
hub, thus enabling better capacity management for the long-haul destinations (Schmitt
and Gollnick, 2016). Usually, regional airports generate lower passenger traffic, and
airlines utilise their smaller aircraft for those legs. On the other hand, long-haul
destinations experience higher economies of scale if larger aircraft is used, therefore
the ultimate goal of the airlines is to maximise the number of passengers for such
distant leg (Bitzan and Peoples, 2016). The elaborated network of multiple origin-
destination connections provides higher connectivity and concentration of air traffic at
the hub, enabling an airline to deploy more efficiently its fleet and to be more flexible

in terms of traffic variations and volume. However, in such configuration, some
individual airports may remain dominated by a single airline, and as a consequence,
the network carriers may build strong entrance barriers at such airports and impose
control on the whole air traffic (Bieger and Wittmer, 2011a).
From the passengers perspective, the hub-and-spoke system provides a wide variety
of destinations crossing through the hub. Besides, the network players provide a
number of ancillary services for their clients in terms of differentiated classes (first,
business and economy), various on-board services (like baggage allowance, lounge
access, special privileges for business and first class), frequent flyer programmes for
loyal clients, etc. A typical strategy of traditional carriers is the large application of
price discrimination and revenue management. Actually, yield and revenue systems
were initially created and developed by these airlines (Ivanov, 2014). Nowadays, there
are multiple sophisticated software programmes which allow the airlines to customise
the transportation products according to the customers preferences and readiness to
pay. The ultimate goal is to target the right customer with the right price for the right
product, while preventing those who would be willing to pay more from taking
advantage of a lower price category (Bieger and Wittmer, 2011b). The whole revenue
management system of price discrimination and fencing mechanisms are aiming at
improved capacity management (higher load factor) and optimisation of revenues and
yield, thus enabling airlines to be more flexible on the different legs (Belobaba, 2009c).
Further, the main target groups, business and leisure travellers, have diverse
preferences and buyer behaviours, which are additional prerequisites for
differentiation.
In terms of tourism, network carriers are usually used by individuals, families and
business travellers for city breaks and business trips. Sometimes allotments could be
reserved by tour operators for regular groups when the number of tourists does not
allow renting a whole aircraft. Special corporate agreements between the carrier and

companies also enhance the tourist flows. Recent technology development improved
the distribution channels of traditional airlines. While in the past decades they relied
heavily on travel agents for booking and issuing tickets through the GDS, nowadays
numerous internet channels facilitate the airlines to connect directly to the potential
customers, as well as to diversify their distributor network.
From the destination management perspective, traditional airlines provide improved
visibility to the tourist location and deliver individual tourists (including business
travellers) to the destination throughout the whole year. Therefore, they are desired
destination partners and subject to intense interest for the destination governance
authorities.
Charter airlines
Charter airlines, also known as leisure carriers , tourist carriers or holiday
airlines (Gross and Klemmer, 2014) and non-scheduled traffic (Schmitt and
Gollnick, 2016), are used predominantly for tourism purposes. These airlines are
engaged by tour operators to perform usually a return flight between an origin and a
destination, as part of a package tour created by the tour operators. This is a specific
form of the point-to-point business model, with the significant difference that both
points are determined by a third party the tour operator. Actually, the latter takes
the whole business risk to sell the capacity instead of the airline, which shifts the
responsibility and agency relations in another direction (Lobbenberg, 1995). However,
the strong integration with holiday organisers has become a disadvantage in recent
years because of the processes of disintermediation and the reduced role of tour
operators in the travel industry (Bieger and Wittmer, 2011a).
The success of charter airlines is rooted in their rather simple cost structure and less
complex operations (Bieger and Wittmer, 2011a), resulting from their close
relationship with tour operators, who plan the package trips well in advance. Target
clients are almost entirely leisure travellers, i.e. price-sensitive customers; few cabin

staff are employed, and advance planning of load factor further decreases the costs
(Bitzan and Peoples, 2016). As a disadvantage, charter airlines suffer from seasonality
(Papatheodorou and Zenelis, 2013), which they try to compensate for by operating
long-haul destinations winter sun or flights to mountain and ski resorts in the
winter months. Doganis (2006) considers charter airlines as an alternative low-cost
model, especially in Europe, because both types of airlines enjoy certain common
operational and economic features: the aircraft used is larger and more economical,
resulting in economies of scale, hence low cost and low rates, there is a higher
passenger load factor, and they fly at inconvenient times (e.g. through the night).
However, since historically charter airlines preceded the emergence of low-cost
carriers, we consider the former as a separate business model airline. Some charter
airlines establish a charter line , which is a regular line between a particular couple
of points for several weeks or months or for the tourist season. In terms of movements,
this kind of operation could be considered seasonal regular flights, and therefore the
charter model overlaps with scheduled operations. In this regard, the distinction
between types of airlines actually blurs and they are differentiated mainly by the type
of traveller using their services: passengers travelling for leisure usually use charter
airlines, whereas business travellers prefer traditional carriers.
In contrast to network carriers, non-scheduled airlines do not usually sell tickets to the
public, because they are part of package holidays. Still, most tour operators publicize
last minute availabilities of seats for free sale in order to cover the high fixed costs of
the flight. Nowadays, modern technology allows charter airlines to sell their own
capacity through their websites, which additionally blurs the distinction between
charter and low-cost airlines (Schmitt and Gollnick, 2016).
Charter airlines are mostly popular in Europe, where the big tour operators (TUI,
Thomas Cook, etc.) apply vertical integration for full utilisation of their resources
large tourist holdings incorporate charter airlines, tour operators and hotels or hotel

chains, thus ensuring the whole package of tourist services is provided by the same
holding of sister-companies. As mentioned earlier, charter airlines are typical for the
tourism industry, and they have greatly contributed to the intense development of
mass tourism destinations in the 1970s and 1980s, and hence play crucial role for the
destination development.
Low-Cost Carriers (LCC)
The third business model, low-cost travel, is relatively new, but it has revolutionised
the air transport market. LCC are also known as discount , budget , or no-frills
airlines (Gross and Klemmer, 2014). Their main strategy is directed towards cost-
reduction, which in turn reflects the final product features - increased seat density on-
board, usage of remote and smaller airports, using inconvenient hours for the slots
(e.g. during the night, early in the morning, or late in the evening), providing few or
no services onboard, and charging extra for any ancillary services, like food and
beverages, baggage, or seat allocation.
Although the first LCC, Southwest Airlines, started operations in 1971 in the US, the
real invasion of LLCs happened some 30 years later. The development of LCCs is
closely related to the deregulation initiatives (Diaconu, 2012), and this is one of the
reasons for their fast expansion just after such legal acts had been accepted. There were
several consecutive packages of measures in Europe, starting from the late 1980s (1987)
and ending in 1993, making the European Union the second liberalised market after
US (Diaconu, 2012; Bitzan and Peoples, 2016). The greater freedom of traffic rights and
movement towards a single sky have pushed the development of LCCs, providing
possibilities for them to exploit (see Table 1.7.).

Table 1.7 Top 20 Low-cost and leisure airlines by passenger number 2015
Source: Flight Global (2016)
The main characteristic of this business model is the use of point-to-point
transportation these are non-stop flights serving passengers flying from point A to
point B, which eliminates the handling of connecting passengers and improves the
productivity (Belobaba, 2009b). A particular strength of the point-to-point model lies
in its lean structure, derived from the less complex operations and intensive aircraft
utilisation (Bieger and Wittmer, 2011a). As a disadvantage, however, LCCs concentrate
on short and medium distance flights only (600-5000km) (Schmitt and Gollnick, 2016)
because maintaining such legs allows efficient and higher utilisation of the planes and
ground passenger services. On the other hand, this gives traditional airlines the chance
to keep their segment of long-haul destinations. Target clients are price-sensitive
customers, so the LCCs provide only one-class service and avoid traditional
distribution channels (travel agencies), thus reducing the cost of paying commission
to them. Instead, tickets can be bought only directly from the airline s website, or by
telephone. Further, LCCs tend to use a single aircraft type or an interchangeable family
2015 2014 Carrier Country Passengers
(million)
Traffic
RPK
Load
factor
Current
fleet
1 1 Southwest USA 144.6 189 057 83.6 % 703
2 2 Ryanair Ireland 106.4 NA 92.9 % 352
3 3 EasyJet UK 68.6 77 619 92.6 % 149
4 4 Gol Brazil 38.9 38 411 77.2 % 133
5 6 JetBlue Airways USA 35.1 67 112 84.7 % 218
6 5 Lion Air Indonesia 32.0 NA NA 114
7 8 IndiGo India 31.4 34 186 83.4 % 107
8 7 Norwegian Norway 25.8 42 284 86.2 % 106
9 10 Vueling Airlines Spain 24.8 24 775 81.3 % 102
10 9 Air Asia Malasia 24.3 30 006 80.2 % 80
11 12 Pegasus Turkey 22.3 21 223 77.4 % 58
12 11 Azul Brazil 20.6 18 636 79.6 % 140
13 13 WestJet Canada 20.3 34 635 80.0 % 117
14 16 Wizz Air Hungary 20.0 NA 88.2 % 67
15 15 Cebu Pacific Air Philippines 18.4 19 872 79.8 % 48
16 17 Apirit Airlines USA 17.9 28 954 84.7 % 84
17 14 Jetstar Australia 17.9 30 503 80.4 % 70
18 18 Eurowings Germany 17.0 NA NA 87
19 20 Thai AirAsia Thailand 14.9 14 872 81.0 % 47
20 21 Frontier Airlines USA 13.3 21 822 86.5 % 57

of aircraft, which additionally contributes to savings on crew training, spare parts and
maintenance (Belobaba, 2009b).
The use of alternative, often remote airports, instead of large, popular airports is a
double advantage for an LCC. At such decentralised airports, costs are additionally
reduced because of the faster turnaround times, lower airport fees and possibly more
customised services (Papatheodorou and Zelenis, 2013). Also, establishing a regular
flight line to a regional airport opens the destination to a larger market, making it
more visible and accessible (Dziedzic and Warnock-Smith, 2016). In this way, LCCs
directly influence the tourism industry in the respective region a topic, which is
largely discussed within the academia (Dobruszkes, 2013; Graham and Dennis, 2010).
LCCs are becoming more popular among tourists who use them largely for short trips,
especially to cities that are off the beaten track and away from the well-known usual
destinations. The low rates further democratised travel allowing people with lower
incomes to afford air travel. Surprisingly, business travellers have also increased their
interest in LCC in the recent years. Therefore, LCCs are the subject of high interest,
especially for out of the way destinations. LCCs impact on the tourism industry will
be elaborated in details in Chapter 3 and illustrated with specific cases.
* * *
Many authors have focused on studying and confronting the three business models of
the airlines (Bitzan and Peoples, 2016; Morrell, 2005; Pearson Pitfield and Ryley, 2015).
In most cases, they are presented more as competitors, each of them trying to increase
their own share at the expense of the others. The competition is predominantly
performed on geographical and regional bases, and that is why we can easily allocate
the main regions of operation Americas, Europe and Asia. Recently, some LCCs
announced the first regular transatlantic flights, which opens another door for their
further development (Martin, 2014; Maslen, 2017).

The three presented business models produce numerous hybrid sub-models (Diaconu,
2012). This is a consequence of the efforts of each type of airline to improve, adopting
strategies from the others. The traditional airlines are attempting to reduce their costs
by charging additionally for some of the previously included services on-board (e.g.
baggage allowance, food and beverages). They also try to use the same or similar
aircraft and redirect more bookings through their own website (e.g. Lufthansa group).
Other airlines realise the extreme differences in the models and expand their own
daughter LCCs, thus enlarging the scope of their target clients and still keeping the
main brand (e.g. British Airways and Go; Qantas and Jetstar). In this regard, LCCs
could be considered not as competitors, but rather as complementary to the traditional
airlines product, because they target different clients and develop a horizontal
integration approach (Stoyanov, 2014).
On the other hand, the LCCs incorporate some practices that are typical for the
traditional airline (Bitzan and Peoples, 2016), like adding additional classes (e.g.
Premium/Flexible class, Wizzair), using some hubs, using codeshare agreements,
providing allotments to tour operators (e.g. Norwegian air), and charter airlines have
started to sell single seats (Bieger and Wittmer, 2011a). With this increased
convergence, the distinction between traditional, charter and low-cost airlines
eventually will be blurred (Belobaba, 2009b).
Air alliances
Strategic air alliances derive from the age of airline expansion and the elaboration of
their network (Wittmer and Bieger, 2011a). The post-deregulation period (the 1980s)
was marked by numerous mergers, acquisitions and new partnerships, especially
notable in the US market. The airlines struggled to strengthen and expand their
networks and become more competitive by concentrating their dominance. In Europe,
a similar situation happened much later and at a slower pace (e.g., the Air France and
KLM merger in 2003) (Doganis, 2006). Another drive for cooperation came as a

consequence of airlines performance deteriorating in the 1990s, caused by several
economic and oil crises. This was the time when the current global air alliances were
established.
Strategic alliances play an essential role in airline branding, emphasising the alliance
brand, thus transferring positive elements of a stronger brand to another weaker brand
(Wittmer and Bieger, 2011b). However, in contrast to other airline brands, alliance
brands have received relatively limited attention from scholars (Chung and Feng,
2016) who usually address a few issues and explore the nature and internal
characteristics of the alliances (Albers, Koch and Ruff, 2005; Forsyth, Niemeier and
Wolf, 2011), the impact of alliance membership on airline performance and
development (Min and Joo, 2016; Iatrou and Alamdari, 2005; Pitfield, 2007;
Kuzminykh and Zufan, 2014), and the perceptions and reactions of passengers to
corporate and alliance brands (Chung and Feng, 2016; Wang, 2014).
Airline cooperation can be classified into several types (Doganis, 2006):
- Route-specific agreements This type of partnership aims to avoid potential
cannibalisation of certain pairs of cities where two airlines perform flights (Belobaba
2009a). Both carriers serving the same route may decide only one of them to operate it,
i.e. a code-share1
operation.
- Regional alliances Traditional airlines partner with smaller, regional carriers who
perform the short-haul flights, the so-called spokes (from the hub-and-spoke
system). The main purpose of the bigger airline is to reduce cost and to concentrate on
1 code share: a commercial agreement between two airlines (operating and marketing carriers) that
allows an airline (marketing carrier) to put its two-letter identification code on the flights of another
airline (operating carrier) as they appear in computer reservations system (US General Service
Administration, 2011)

the more profitable long-haul flights. Therefore, the airline expands its network,
market and geographical coverage.
- Global alliances These are the well-known alliances (One World, Star Alliance group
and SkyTeam) that have a global scope. They encompass all the above-mentioned
benefits for partnership, as the networks of two or more large airlines are linked to
operate in geographically distinct markets, even in different continents (Doganis,
2006).
According to Doganis (2006), there are several major benefits that encourage airlines
to enter the alliances: marketing benefits of large scale and scope; cost synergies and
reductions; and a decrease in the competition. In terms of marketing, local airlines benefit
their brands by joining a global airline alliance, on both the local and foreign markets.
Additionally, the extensive network reaches more markets and covers larger
geographical areas/continents, leading to a dominance in certain regions. Cost synergy
and reduction is gained by combining flights or code-sharing, by including a new
destination for fewer expenses, and by utilising partners resources. Further, in this
way, there is no need for the traditional airline to diversify its fleet in order to cover
both close and distant destinations. More savings are achieved by standardising
product, sharing crew and aircraft and launching mutual Frequent Flyer Programmes.
However, regional alliances might lead to reduced competition and a monopolistic
position (Doganis, 2006). A similar but not so obvious situation appears when the two
partners code-share their flights. In such cases, alliances are strictly monitored by
antitrust institutions to prevent threats to the competition (Doganis, 2006).
Nevertheless, strategic alliances also have their weaknesses. Min and Joo (2016)
question the operating efficiency of alliance airlines, comparing them to airlines not
belonging to any alliance. Furthermore, inclusion in an alliance is not sufficient for
achieving competitive advantage because of the service nature of airline products.
Economies of scale and brand recognition ensure certain comfort, but becoming more

competitive requires further efforts in terms of organisational learning and operational
efficiency (Min and Joo, 2016). This conclusion has been reconfirmed by Casanueva,
Gallego, Castro and Sancho (2014), who published an empirical research of airline
alliances, aiming to estimate partners access to each other and their resources, and the
actual mobilisation and effective utilisation of network assets. Regarding customer
reactions, some empirical research reveals that despite being aware of alliances,
customers perceive an airline s brand as dominant because it is the airline that
provides the service, not the alliance (Chung and Feng, 2016), which diminishes most
of the expected marketing effects. An interesting fact is that low-cost airlines are not
members of airline alliances because they put a strong focus on market dominance
concerning specific routes or specific regions (Bieger and Wittmer, 2011a).
Table 1.8 Main facts about the three global airline alliances
Star Alliance Group* SkyTeam one world**
Number of members 28 20 14 members and 30
affiliates
Number of countries 192 177 159
Number of airports 1330 1062 1010
Number of daily flights 18 450 17 343 13 796
Number of passengers 689.98 million 665.4 million 558.2 million
Fleet size/Aircraft 4631 3054 3571
Main airline members Lufthansa, Austrian
Airlines, Scandinavian
Airlines, Swiss,
United Airlines, LOT-
Polish Airlines, Air
China, Turkish
airlines
KLM, Air France,
Aeroflot, Delta,
TAROM, Czech
Airlines, Alitalia,
Aero Mexico,
Kenya Airways,
Saudia
American Airlines,
British Airways,
Iberia, Japan Airlines,
Finnair, Cathay
Pacific, Qatar Airways,
S7 Airlines, Mexicana,
Qantas
* The data is valid by September 2015
** The data is valid by October 2016
Source: websites of the three air alliances
The three main airline alliances Star Alliance Group, one world and SkyTeam
now account for almost two-thirds of the total world airline capacity and more than 75
percent of air travel spent between the world's top 100 business cities (Oneworld, n.d.)
(see Table 1.8.). Their importance for both the aviation and tourism industries is
continuously increasing because of their dense network and global coverage. Further,

in the era of continuous aggregation, mergers and acquisitions in aviation, they
provide a reasonable alternative for smaller and regional airlines to stay independent,
and still, utilise the networks of their alliance partners. In terms of destination
management, global air alliances contribute to the accessibility of smaller and remote
destinations, providing more options for reaching them.
1.2.2 Airports, ATM (Air Traffic Management), Safety and Security Issues
Airports are the other component of the air transport system, which are vital for the
system s existence. They are indispensable for airlines (Isaka, 2012), which need
runways for take-off and landing, as well as full service on the ground, including
handling of the aircraft and the passengers. The common goal of airports and airlines
is to provide transportation for people and cargo, operating on a commercial basis, i.e.
generating profits. Airports provide the infrastructure for airlines operation. Airports
do not create their own product, but rather are part of both the airlines and
destination s product. Planning and developing an airport is a crucial step for the
destinations in several aspects (Bieger and Wittmer, 2006). Availability of an airport
allows air access to any destination, hence new tourist flows are going to be expected.
Since airports are location-bound, they utilise a two-fold position on one hand,
airports are an integral part of the air transport system, and on the other hand, they
are located within the tourist destination and are perceived by the tourists as the first
and the last experience of their trips. Therefore, the role of the airports will be
examined from those two perspectives: as a provider of the air transport infrastructure,
and as a part of the tourism infrastructure, providing accessibility to the destination,
and indirectly determining the tourist flows, depending on their capacity.
In general, airports could be classified according to their size and capacity, i.e. by the
number of passengers travelled, or by the number of movements (landings and take-
offs), but also according to their technical features, e.g. by the type of aircraft that could
use the airport s runway and facilities. Still, there are numerous other characteristics,

like land area, geometrical layout, equipment used, services offered, the intensity of
facility utilisation and economic performance, that make every single airport unique
worldwide (Odoni, 2009a). Tables 1.9 and 1.10 illustrate several airport rankings,
according to the Airports Council International (ACI), the only global trade
representative of the world s airports, committed to defending airports positions,
developing standards and recommending practices in the areas of safety, security,
regulation and overall airport operations (ACI, Overview). The most common
classification of airports used by the biggest aviation-connected organisations (ICAO,
FAA, EASA) (Schmitt and Gollnick, 2016) combines geographic coverage with the type
of flying vehicles:
 International airports
 National airports
 Military airports
 Heliports
Because of the strict regulations, every airport is assigned a 4-digit unique code (ICAO,
ICAO Meteorology global air navigation plan) and a 3-digit IATA code (IATA, IATA
Codes). The former codes are used mainly by the ATM and air professionals, whereas
the latter are more well-known and are largely used by travel agencies and airlines
daily operations. There are other designator codes used (FAA, USA, Schmitt and
Gollnick, 2016), but they remain relevant only within the particular country or region.
In terms of regulation, again the main role belongs to the International Civil Aviation
Organisation (ICAO), together with ACI and regional bodies like EUROCONTROL for
Europe, for specific standards and recommended practices. The regulatory issues
concern mainly airport operations, ATM, safety and security, environmental issues
like emissions and noise, and each of the topics is large enough to require a different
organisation to deal with it and its effects on airports.

Table 1.9 Top 10 World Airports by number of passengers, 2015
2015 2014 City Airport
Code
Total
passengers*
2015/2014
change (in %)
1 1 Atlanta GA, USA ATL 101 491 106 5.5 %
2 2 Beijing, China PEK 89 938 628 4.4 %
3 6 Dubai, United Arab Emirates DXB 78 014 841 10.7 %
4 7 Chicago, IL, USA ORD 76 949 504 9.8 %
5 4 Tokyo, Japan HND 75 573 106 3.8 %
6 3 London, United Kingdom LHR 74 989 795 2.2 %
7 5 Los Angeles, CA, USA LAX 74 937 004 6.0 %
8 10 Hong Kong, China HKG 68 766 986 8.2 %
9 8 Charles de Gaulle, Paris, France CDG 65 766 986 3.1 %
10 9 Dallas/Fort Worth, TX, USA DFW 65 512 163 2.6 %
*Total passengers: arriving and departing passengers; direct passengers counted once
Source: ACI (2016a)
Table 1.10 World airport ranking by total aircraft movements (landing and take-off), 2015
2015 2014 City Airport
Code
Total
movements
2015/2014
change (in %)
1 2 Atlanta, GA, USA ATL 882 497 1.6
2 1 Chicago, IL, USA ORD 875 136 -0.8
3 4 Dallas Fort Worth, TX, USA DFW 681 247 0.2
4 3 Los Angeles, CA, USA LAX 655 564 3.0
5 5 Beijing, China PEK 590 169 1.4
6 7 Charlotte, NC, USA CLT 543 944 -0.2
7 6 Denver, CO, USA DEN 541 213 -4.3
8 8 Las Vegas, NV, USA LAS 530 330 1.5
9 9 Houston, TX, USA IAN 502 844 -1.2
10 11 Charles de Gaulle, Paris, France CDG 475 810 0.9
Source: ACI (2016a)
Airports are complex entities, which deserve multifaceted analysis. We will examine
them from the technical, economic, social and environmental points of view in order
to make a deep analysis and specify their important role for the tourism industry. From
the technical perspective, as an air transport infrastructure the airport has two distinctive
functional parts airside and landside (Odoni, 2009a; Schmitt and Gollnick, 2016).
The airside is connected with the core function of the airports to serve the aircraft,
transporting passengers and/or cargo to/from the airport. Therefore, on the airside are

included runways (for landing and take-off), taxiways (a system of alleys, which
allows the aircraft to access the apron and the terminal gates), aprons (the area for
parking the aircraft during their downtime) (Schmitt and Gollnick, 2016), aircraft
maintenance areas, and air traffic control facilities and equipment, as well as the land
that surrounds all of these. The airside typically constitute 80 95% of the land area of
an airport. The geometric configuration depends on the number and location of the
runways, relief and peculiarities of the area. Runways are usually the determinants of
the airport s characteristics and capacity, and their construction follows strict
regulatory standards (Odoni, 2009a). Other factors influencing the dimensions and
capacity of a runway also include the weight of the aircraft, weather/climate conditions
(wind and temperature), airport elevation and presence of any physical obstacles
nearby, etc. (Odoni, 2009a). In addition, airports may have different geometric
configuration of the runways (parallel or intersected) which also would impact their
capacity and operations.
The landside of an airport encompasses the complex of passenger buildings, cargo
terminals and other supporting buildings (e.g., airport administration, utility plants,
catering facilities, hangars, etc.), ground access facilities (access roads, automobile
parking areas, other transport stations.), and any additional non-aviation facilities
(e.g., hotels, office buildings, shopping areas, event venues, etc.) that may be located
within an airport s boundaries (Odoni, 2009a). The most imposing part of the landside
is the passenger terminal building, where the passengers are prepared for their flight
and are welcomed from arriving flights. Many administrative and official state
institutions are located in international terminals, because the airport is considered a
cross-border point, hence all the formalities of travelling abroad (like passport control,
customs, security checks) should be duly implemented. The architecture and design of
the terminals often depend on the internal organisation of the activities and
procedures. For example, there is a tendency to separate passenger arrival flow and
departing flow (Schmitt and Gollnick, 2016), and there should also be a transit area for

those passengers who will not enter the country, especially if a visa is necessary, but
will travel on to their final destination. Within the landside, every airport is equipped
with a fire brigade and medical care centre, which are mandatory, according to the
international standards of ICAO.
Airports usually serve as a crossroads of multiple means of transport railway,
underground, highway access, even water transport. The intermodality of
passenger transport is considered an ultimate goal for the passengers comfort and
satisfaction. Schmitt and Gollnick (2016: 227) defined intermodality as a seamless
transfer/connection from one transportation mode to another mode with a minimum
of time delay and a maximum of comfort for passenger and/or payload. Apart from
providing nearby transport stations, the intermodality concept involves coordination
between the different means of transport, as well as between freight and passenger
operations (in the airport case luggage handling). The next step will require an
"integrated approach" with a common information and distribution system across the
airline and other transport systems (ATAG, Intermodality).
On both the airsides and landsides of airports relevant activities are performed, which
are connected to the functions of each part. On the airside airlines are provided with
aircraft handling services during its stay at the airport, i.e. the so-called turn-around
process (Schmitt and Gollnick, 2016) or ramp-handling (Odoni, 2009a). The process
encompasses the time the aircraft lands until its next take-off. The airplane is led over
the taxiway to the apron area where after passengers disembark, the turn-around
procedure starts cleaning the cabin, refuelling, providing maintenance, if needed,
loading cargo, etc. All those services can be provided by the airport team/operator, by
the airlines themselves, or by a third party provider (e.g. ground handling companies)
(Schmitt and Gollnick, 2016). The airlines are strongly interested in minimising the
duration of the turn-around procedures (Schmitt and Gollnick, 2016), which provides
an opportunity for competition among the companies providing the ground handling

services. These services are the main source of revenue for airports, what is called
aeronautical revenue . Revenue comes in the form of different types of charges,
applied to airlines for the package of services provided fees for slots, navigation,
ground handling (ramp handling, traffic/passenger handling), noise and other taxes.
Traffic handling activities at the airport apply to processing the passengers, including
check-in procedures, baggage handling, gate control and boarding. The party offering
these services may be one of the three above-mentioned (airlines, airport operator, or
a third party/handling agency). Apart from the process of preparing to fly, the
passengers are offered numerous other services and entertainment, located in the
terminal buildings. These are shopping areas, F&B outlets, airlines lounges, bank
offices and travel agencies, car rental agencies, even cinemas, hotels and event venues.
In the recent years, airports revenue from such non-aeronautical services have
significantly increased (ACI, 2016b). Non-aeronautical revenue spans a range of
possibilities, e.g. renting retail shops, charging parking fees, renting airport land and
space in the buildings and advertising space. Lately, there is a dramatic trend for non-
aeronautical revenue to exceed aeronautical revenue (Fasone, Kofler and Scuderi,
2016).
Airport capacity is mainly determined by the capacity of its facilities, the quality and
length of the runways, which allow bigger aircraft to land and take-off, as well as the
volume and good management of the air traffic (Odoni, 2009a). The more aircraft is
handled at a time, the bigger the capacity of the airports. Two approaches are outlined
to cope with improving airport capacity building another runway, or improving
ATM by inventing systems for more sophisticated operations and avoiding
congestions, thus enhancing the efforts for sustainable development (Gonnord and
Lawson, 2000). Capacity constraints are largely discussed by academicians, mainly
with the purpose of finding the optimal models for improved ATM (Wilken, Berster
and Gelhausen, 2011; Xiao, Fu and Zhang, 2016) and slot management (Madas and

Zografos, 2008; Gillen, Jacquillat and Odoni, 2016). In terms of the tourism industry,
capacity matters for the volume of tourist flows, but it is also a priority for the DMO
and local authorities when the ultimate goal is stimulation of tourism demand
(Gonnord and Lawson, 2000).
From the economic perspective, airports are of strategic importance for the regions,
where they are located, due to the direct, indirect, induced and catalytic effects of air
transport and tourism. Airports provide visibility of and accessibility for the
destination, thus enabling increased passenger flows. Many European countries invest
in airports in order to attract airlines to come or to intensify their traffic. Further,
because of the intermodality, airports have become logistic hubs for companies
maintaining large distribution networks. In a similar vein, international companies
choose their target points/countries for expansion, depending on the availability of
good transport connections and reliable business infrastructure in and nearby the
airports.
The social perspective of airports is revealed by the growing popularity of airports as
public areas, where people go not only with the primary purpose of travelling, but as
a place for entertainment. This trend is enhanced by the fact that many seminars,
conferences, events, etc. are held at venues located adjacent to or within the airports:
leisure, recreation and fitness facilities are constructed, together with F&B outlets, even
health and child services, thus converting the airports to regular social places
(Kasarda, 2006). These non-aeronautical sources not only contribute to diversifying
airport revenue, but also appear as a factor in attracting airlines to retain or find a hub
(Kasarda, 2006).
From the destination management perspective, airports become an extension of the core
destination, offering shopping, trading, business and employment, all of them
enhancing passengers or tourists experience. As a result, airports are undergoing a

metamorphosis, becoming converted to commercial metropolitan business districts
(Kasarda, 2006). Many firms from diverse industries (logistics, IT, commercial services,
etc.) also position their offices in the area around airports, in search of better
connectivity and improved costs. The same companies become an additional source of
demand for the airport, as well as for the rest of the companies located around it
(Kasarda, 2006). Currently, the whole region around such big airports, encompassing
all the businesses and plants gravitating to the airports, forms a huge district, called
aerotropolis Kasarda, . Typical examples of aerotropolis are Schiphol,
Amsterdam and Incheon, Seoul, with numerous new airports embracing the idea of
Airport-City concept in their future strategic development (Kasarda, 2006).
Study of air transport infrastructure cannot be comprehensive without Air Traffic
Management (ATM, Air traffic control (ATC), Air navigation services (ANS)2
and
Safety and Security service. Some authors consider them as separate entities of the air
transport system (Schmitt and Gollnick, 2016); however, as they are physically
positioned within the airport and are an integral component of the ground
infrastructure, we allocate them as sub-divisions of the airport structure. Therefore,
ATM and Safety and Security issues are elaborated below.
Air Traffic Control (ATC) or Air Traffic Management (ATM)
ATC plays an essential role in the operations of every airline (Hansman and Odoni,
2009). ATC is in charge for the taxi-out, take-off, landing and taxi-in procedures of
every single flight to and from an airport. The ultimate goal of ATC is to ensure the
safe and efficient flow of air traffic.
2 Air Traffic Control (ATC), Air Traffic Management (ATM) and Air Navigation Services (ANS) are also
used interchangeably.

Communication, navigation and surveillance systems are the fundamental
components of ATC, which ensure its efficient operation (Schmitt and Gollnick, 2016).
The air traffic controller observes the air traffic situation through a surveillance system.
The controller issues commands clearances to aircraft through a communication
system (most ATC communications take place currently on voice radio channels in the
very high-frequency (VHF) band reserved for aviation use), and the aircraft fly the
cleared route using a navigation system. The latter has two distinctive parts: en route
navigation, and on approach to a particular airport. The integration between them
requires coordination among the ground authorities not only within a country, but on
regional and global bases. Therefore, many of the national navigation systems are
state-owned and often politically bound. Other important technical elements of ATC
include flight and weather information systems, which provide pilots and controllers with
up-to-date weather conditions information (Hansman and Odoni, 2009). The whole
system operates under the comprehensive and strict Standard of Operation
procedures and rules, set by the ICAO and recognised worldwide (ICAO, 1984).
Another specific feature of ATC is that it is currently almost an entirely human-centred
process, in which flight crew and ground controllers communicate on navigation
issues (Hansman and Odoni, 2009). Given the latest technological advancements, some
of the activities would eventually become fully or partially robotised (ICAO, 2011).
In the past, after the Chicago Convention and in the following conferences, the
adopted air traffic system allowed each country to provide air traffic control over its
own territory. However, the situation now has changed. The demand has significantly
increased, hence the air traffic. At key points the local overload creates delays,
resulting in airport congestion, which is also caused by capacity constraints and
inefficient ATC management (Hansman and Odoni, 2009). Certain mathematical
models have been utilised in order to calibrate the operations (Gurtner, Cook, Graham
and Cristobal, 2016). Moreover, inefficient ATC is directly connected with additional
fuel usage and environmental pollution by both emissions and noise. Recently, aircraft

technology has been revolutionized, with brand new equipment enabling precisely-
defined paths without relying on ground-based radio-navigation signals e.g. the
Required Navigation Performance, which is a satellite-based system (ATAG, 2013).
Consequently, the current communication and navigation systems seem outdated and
ineffective (Urfer and Weinert, 2011).
Finally, the political environment and air regulations further imply the growing need
for a totally new paradigm of air traffic management. Any aircraft crossing a national
boundary currently causes certain workload for the ATC. “ fragmented airspace is
an inefficient airspace “T“G, . Creating a single, unified legal and standards
framework, which would have to be recognised by every country on Earth, would
enable the separate ground stations to work in a global environment, thus having a
full vision and strategy on a global scale.
In their report on the topic, ATAG (2013) propose two major ways to be considered, in
order to enhance the efficiency of the ATM system. These are:
1. Change the technology and install new operational structures that will impact
the interaction between the flight crew and the ground service providers.
2. Shift the current state-run governance of the air navigation infrastructure
towards a liberalised, commercially oriented service provider (ATAG, 2013). In order
to improve the above stated operational ineffectiveness of ATC, many organisations
(like ICAO, EUROCONTROL the ATM body of the EU - http://www.eurocontrol.int,
CANSO - Civil Air Navigation System Organisation - https://www.canso.org/about-
canso) and institutions appeal for a profound new approach in order to provide safer,
more efficient and environmentally responsive performance. There are some attempts
(such as SESAR in Europe, see Text box 1.1, and NextGen in the USA) to create such a
unified system, but most of the countries still lack interest in such initiatives (ATAG,
2013).

Overall, air traffic management plays a vital role in the air transport system in multiple
aspects. Still, the global efficiency evaluation stipulates improvement of current ATM
because of increased traffic, capacity constraints and pressing environmental concerns.
The new reality demands a more innovative and complex approach, encompassing
more than a single country terrain. Therefore, ATM advances affect the interests of
many more stakeholders than those obviously connected with aviation: governments,
international institutions, environmental organisations, local communities and,
ultimately, normal people, looking for safe and efficient travel.
Safety and security
Undoubtedly, safety and security are of key importance in aviation and have received
significant attention on academic, business and social levels. To begin with, safety
as a term applies to the technical and operational reliability of aircraft (Schmitt and
Gollnick, 2016), enabling safe journeys without incidents. Another definition of
aviation safety addresses the airworthiness, i.e. a standard of proper design of the
Text Box 1.1 SESAR – the project of the EU
The background of the SESAR Programme
The SESAR (Single European Sky ATM Research) Programme has been launched as an integrated
part of the Single European Sky initiative (SES). This programme represents the technological pillar
of the SES and aims at developing a modernised and high-performance air traffic management
infrastructure which will enable the safe, cost-efficient and environmentally friendly development
of air transport.
Source: European Commission (2010)
SES“R s vision builds on the notion of trajectory-based operations and relies on the provision of air
navigation services (ANS) in support of the execution of the business or mission trajectory
meaning that aircraft can fly their preferred trajectories without being constrained by airspace
configurations. This vision is enabled by a progressive increase of the level of automation support,
the implementation of virtualisation technologies as well as the use of standardised and
interoperable systems. The system infrastructure will gradually evolve with digitalisation
technology, allowing air navigation service providers (ANSPs), irrespective of national borders, to
plug in their operations where needed, supported by a range of information services. Airports will
be fully integrated into the ATM network level, which will facilitate and optimise airspace user
operations.
Source: SESAR, Objectives

aircraft in combination with qualified operations and maintenance (Schmitt and
Gollnick, 2016). This means that the focus of aviation safety is directed to ensure that
the process of transportation is entirely free of any faults that might endanger the lives
of people on-board the plane and on the ground. Therefore, safety precautions are
predominantly connected with technical and engineering standards, in combination
with certain operations and procedures that are human-centred.
It is surprising, however, that despite the common understanding of aviation safety,
there are hardly precise ratios which may measure and quantify it (Barnett, 2009).
Included within the scope of the indicators are diverse metrics, like the number of fatal
accidents, the number of hull losses (concerning primarily the damages of the aircraft),
the number of people killed or carried (further specified by people on-board and
people on the ground) (Barnett, 2009), but none of them are capable to precisely
estimate the safety level for a particular carrier, country or aircraft brand. Therefore,
probability methods which consider more than a few variables are most often used,
and such estimation is largely based on statistics and archive data. Different
approaches are applied to evaluate safety from the customers perspective; for
example, among the most popular is the evaluation and management of risk (Insua,
Alfaro, Gomez, Hernandez-Coronado and Bernal, 2016). Examined through several
aspects (financial, functional, physical, psychological, social, etc.), the concept of risk
management has become standardised and both academicians and regulators have
found a large application for it (Boksberger, 2011).
In order to meet requirements for aviation safety, a number of institutions and
organisations have elaborated rules, standards, and procedures at global, national and
local levels. As technology has become more advanced, those safety regulations are
still evolving and they are continuously amended. Headed by ICAO, setting the safety
regulatory framework, the FAA (Federal Aviation Agency, USA) and the European
Aviation Safety Agency (EASA) elaborate further mandatory standards in their

regions (Fox, 2014). In general, the regulations cover safety precautions on the ground
(including the runway, ground communications and airport areas) and in-flight
operations (concerning mainly procedures followed and decisions made by the flight
crew). A special focus is made on the human-dependent situations during the flight.
The flight crew pass regular training in simulations of critical situations only when
their ability to make proper decisions and adequate reactions are excelled (Boksberger,
2011).
Aviation safety has a crucial influence on both air transport and tourism industries.
The tremendous efforts of all stakeholders involved prove their sincere support for
and desire to contribute to this field. Nowadays, new challenges emerge, like
cybersecurity weaknesses and threats (EASA, 2016), which deserve additional
attention and totally innovative approach to overcome them.
Aviation security, in contrast to safety, is much more dedicated to protecting air
transportation against any kind of criminal and terroristic impact (Schmitt and
Gollnick, 2016). In other words, the focus is not on the technical aspects of aircrafts,
but rather on procedures and operations during the pre-boarding process, while on-
board and within the airport. The main areas of security concerns include:
 controlling access to secure air operations areas,
 screening passengers and carry-on luggage,
 screening checked baggage and cargo,
 aircraft protection.
For each of them there is a detailed procedure sequence using detection systems for
identifying and preventing potential threats to security.
The topic has been largely discussed in recent decades, especially culminating after the
terrorist attacks of 11 September 2001 (Fox, 2014). Then, the security issues provoked
an impressive reflection worldwide, making governments and institutions mobilise

and unify their efforts towards the single goal of prevention of similar attacks. After
this tragedy happened, the aviation security measures have passed through
tremendous detailed examination and implemented enormous improvement (the
introduction of packages of measures during pre-boarding, e.g. full-body scanning,
and restrictions on taking liquids, aerosols and gels on-board).
The main problems of aviation security, apart from enhancing the efforts to prevent
terrorism in aviation, affect passengers personal space and human rights. There are
still voices claiming that the strict procedures during the pre-boarding process cause
stress, unease and discomfort (Skorupski and Uchronski, 2016). Also, some
estimations of the expenses on behalf of air transport security question the overall cost-
efficiency of the system (Gillen and Morrison, 2015). The thorough security checks
require significant funds, usually coming from state institutions, hence from the
citizens, which raises the dilemma whether all people need to pay for the services
provided only to a certain number of citizens who travel by air. The solution is not
unequivocal; Wong and Brooks (2015) appeal for a more flexible approach from the
regulators, requiring better harmonisation and coordination in coping with security,
whereas Gillen and Morrison (2015) advocate for the launch of a risk-based security
system, in which only the potentially risky groups are examined in detail. The idea is
supported by IATA and ACI (IATA, 2013), and further developed with the inclusion
of smart technologies like biometrics, and deeper airline involvement in the security
issues.
* * *
Looking through the lens of tourism, airports have their significant place. First of all,
airport experience constitutes an important part of the travellers overall trip.
Following the latest trend of converting the airports into social spaces, tourists
perceptions of the destination would be additionally enriched. On the other hand, as
part of the infrastructure, the airport is always bound with the regional or national
policies, especially when considering the ATM, Safety and security concerns. The

tourist industry faces the same issues, and in many cases both sectors air transport
and tourism actually go hand-in-hand to solve them. And last but not least, being
business entities, airports strive to achieve certain strategic and operational
development, and in that process they rely heavily on the parallel growth of the
tourism industry. However, the details of the particular relationship of airports and
local destinations are deeply explored in Chapter 3.
1.2.3 Aircraft Producers
The next component of the air transport system are the aircraft
manufacturers/producers. Aircraft, when used as a generic term, means any heavier-
than-air flying machine (ICAO, 2004), but for the purpose of the current study, by
aircraft we will address airplanes only, as they are the most important for the
tourism industry and relevant to the purpose of the study.
Aircraft manufacturers, together with airlines, form the core of aviation services. In
academic literature aircraft is explored mainly regarding its technological attributes
and features. As the technical analysis is beyond the scope of the current study, it will
not be examined in detail, but we will focus on aircraft manufacturers impact on the
air transport system and on the tourism industry.
The studies dealing with aircraft links to tourism and air transport might be grouped
into several main topic areas. Airplanes and environmental issues in which the level of
aircraft carbon emissions is discussed (Edwards, Dixon-Hardy and Wadud, 2016;
Vieira and Bravo, 2016) and is an intensely disputed topic especially for tourism
(Pereira, Ribeiro and Filimonau, 2017; Cokorilo, 2016; Christensen, 2016). Another area
encompasses aircraft fuel consumption, the level of noise pollution (Grampella, Martini,
Scotti and Zambon, 2016) and creating substitutes for the kerosene/fossil fuels (Schmidt,
Paul, Cole and Ploetner, 2016). A relatively new topic that provokes high interest
regarding aircraft is the launching of new technological advancements, for example,

unmanned planes (Yu and Zhang, 2015), innovative technologies (Axisa and DeFelice,
2016), and sophisticated systems for sustainable operations (Graham, Hall and
Morales, 2014).
Aircraft manufacturing as a sub-industry of air transport requires high capital
investment and continuous improvement in research and development (Wittmer and
Bieger, 2011a). Moreover, a long planning horizon, at least five to six years, is necessary
for both the airlines (customers) and the producers, leading to higher business risk for
the both parties. Therefore, similar to national carriers, aircraft producers often rely on
financial support from their home countries (Doganis, 2006). Another solution for
coping with the high business risk is to share it among the other stakeholders, such as
engine manufacturers, system suppliers, supply chain, etc. In this regard the World
Trade Organisation is entitled to strictly monitor for any unfair subsidies, which
would imply adverse competition (Schmitt and Gollnick, 2016).
Following the historical development of civil aviation, the end of WWII marked a
period of intense development. The growth in the civil commercial aircraft market
went in parallel with the expansion of the tourism industry. It is difficult to say which
of the industries was the primary driver, because their development is so entangled
that we cannot distinguish the individual contribution of either of the industries. With
the maturity of mass tourism and the deregulation in the 1970s, came the need for
bigger and more efficient aircraft and the introduction of jet planes. Later on, with
the invasion of low-cost carriers (LCCs), mid-sized aircraft (120-150 passengers)
received more attention for being more efficient and suitable for the point-to-point
system. Supersonic aircraft also started a new age in the evolution of aviation, offering
much faster travel for passengers. Although their development slowed down, when
the Concorde exited the scene (2003), new achievements in this direction are to be
expected.

AIR TRANSPORT TOURISM NEXUS A DESTINATION MANAGEMENT PERSPECTIVE

AIR TRANSPORT TOURISM NEXUS A DESTINATION MANAGEMENT PERSPECTIVE

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