Entrepreneurs and Revolution in the Airline Industry
The airline industry has developed immensely over the past few decades with aircraft being a major mode of transport for the mass movement of people. This is down to entrepreneurs such as Herb Kelleher, Michael O’Leary, Freddie Laker and Richard Branson who have all contributed in the growth of the industry and made it into the multi-billion pound industry that it is at present.
There are four types of flights that make up the airline industry as a whole; Scheduled, Charter, Low Cost and Freight. These airlines are situated at HUB’s, central airports that flights could be routed through (LHR) and fly to smaller SPOKE airports, which are the routes in which planes take out of the HUB airports (Smith, 2007). This system was introduced as a result of the US airline deregulation and benefits from offering more flights to passengers and allows airlines to provide low cost flights due to them making more of a profit. Even though airlines were charging less for flights, they were filling up twice as many seats as before as people were flocking to get the lowest prices. This allowed the income of the businesses to increase.
Other airlines that are not low cost run either Charter or Scheduled flights. The differences between the two are that Charter flights are run mainly by Tour Operators and provide cheap travel to the customers, but the flight time is not known until the flight has been fully booked. Scheduled flights on the other hand are operated by airlines and are given fixed times to fly. Charter flights still stick to a schedule, but can cancel whereas Scheduled flights cannot (Air Travel, 2006).
However, before 1978 these types of flights did not operate due to the airline industry being heavily regulated by government laws (Airline Deregulation, 2010). This resulted in the airline industry being completely unrecognisable compared to how it is today, as airlines all had set prices and there was no competition which limited the consumer’s choice as well.
There are four types of flights that make up the airline industry as a whole; Scheduled, Charter, Low Cost and Freight. These airlines are situated at HUB’s, central airports that flights could be routed through (LHR) and fly to smaller SPOKE airports, which are the routes in which planes take out of the HUB airports (Smith, 2007). This system was introduced as a result of the US airline deregulation and benefits from offering more flights to passengers and allows airlines to provide low cost flights due to them making more of a profit. Even though airlines were charging less for flights, they were filling up twice as many seats as before as people were flocking to get the lowest prices. This allowed the income of the businesses to increase.
Other airlines that are not low cost run either Charter or Scheduled flights. The differences between the two are that Charter flights are run mainly by Tour Operators and provide cheap travel to the customers, but the flight time is not known until the flight has been fully booked. Scheduled flights on the other hand are operated by airlines and are given fixed times to fly. Charter flights still stick to a schedule, but can cancel whereas Scheduled flights cannot (Air Travel, 2006).
However, before 1978 these types of flights did not operate due to the airline industry being heavily regulated by government laws (Airline Deregulation, 2010). This resulted in the airline industry being completely unrecognisable compared to how it is today, as airlines all had set prices and there was no competition which limited the consumer’s choice as well.
Bibliography: Air Travel. (2006, July). Retrieved November 3, 2012, from Yahoo.com: http://uk.answers.yahoo.com/question/index?qid=20060810142659AAKIv5Z Herb Kelleher Biography. (2008, June). Retrieved Novemeber 14, 2012, from biography.com: http://www.biography.com/people/herb-kelleher-278970 In the beginning. (2008, June). Retrieved November 14, 2012, from virgin-atlantic.com: http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jsp Airline Deregulation. (2010, Janurary). Retrieved November 1, 2012, from AVJobs.com: http://www.avjobs.com/history/airline-deregulation.asp Evolution of the airline industry. (2010, June 6). Retrieved November 14, 2012, from Sabre Airline Solutions: http://www.sabreairlinesolutions.com/images/uploads/Hybrid_Model_Brochure.pdf Gumbel, A. (2006, February 10). Freddie Laker. Retrieved November 14, 2012, from The Independent: http://www.independent.co.uk/news/uk/home-news/freddie-laker-the-man-who-broke-the-monopoly-in-the-skies-dies-aged-83-466161.html Smith, S. (2007, February). Hub and Spoke Model. Retrieved Novemeber 3, 2012, from Wise Geek: http://www.wisegeek.com/what-is-the-hub-and-spoke-model.htm#lbss