Airline Industry Terminology

Understanding airline industry terminology is key in hospitality and tourism. Concepts like hub and spoke systems, code-sharing, and yield management shape how airlines operate, impacting travel options and customer experiences. This knowledge enhances your grasp of the broader travel landscape.

1. Hub and spoke system

   • A network design where a central hub connects to multiple destinations (spokes).
   • Increases efficiency by consolidating flights through a central airport.
   • Allows airlines to offer more routes with fewer aircraft.

2. Code-sharing

   • An agreement between airlines to share flight services and sell tickets on each other's flights.
   • Enhances connectivity and provides passengers with more travel options.
   • Often allows for smoother transfers and coordinated schedules.

3. Yield management

   • A pricing strategy that adjusts prices based on demand and booking patterns.
   • Aims to maximize revenue by selling the right seat to the right customer at the right time.
   • Involves analyzing historical data and market trends.

4. Load factor

   • A measure of how efficiently an airline fills seats and generates revenue.
   • Calculated as the percentage of available seating capacity that is filled with passengers.
   • Higher load factors indicate better financial performance for airlines.

5. Open skies agreement

   • A bilateral or multilateral agreement that allows airlines to operate freely between countries.
   • Promotes competition and increases the number of flights and routes available.
   • Aims to lower fares and improve service for consumers.

6. Global Distribution System (GDS)

   • A computerized network that enables travel agents to access airline schedules, fares, and availability.
   • Facilitates booking and ticketing for flights, hotels, and car rentals.
   • Key players include Amadeus, Sabre, and Travelport.

7. Low-cost carrier (LCC)

   • An airline that offers lower fares by eliminating many traditional passenger services.
   • Focuses on high aircraft utilization and point-to-point routes.
   • Revenue is often generated through ancillary services like baggage fees and seat selection.

8. Full-service carrier

   • An airline that provides a wide range of services, including meals, entertainment, and checked baggage.
   • Typically offers multiple cabin classes and loyalty programs.
   • Focuses on customer service and a comprehensive travel experience.

9. Frequent flyer program

   • A loyalty program that rewards passengers for flying with a specific airline or its partners.
   • Members earn points or miles that can be redeemed for free flights, upgrades, and other benefits.
   • Encourages customer retention and repeat business.

10. Overbooking

    • A common practice where airlines sell more tickets than available seats to compensate for no-shows.
    • Helps maximize revenue but can lead to denied boarding situations.
    • Airlines often offer compensation to passengers who are involuntarily bumped.

11. Interline agreement

    • A partnership between two or more airlines to facilitate passenger travel across different carriers.
    • Allows for coordinated ticketing, baggage handling, and transfers.
    • Enhances connectivity and simplifies travel for passengers.

12. IATA (International Air Transport Association)

    • A trade association representing airlines worldwide, promoting safe and efficient air travel.
    • Sets industry standards and provides training and support for member airlines.
    • Plays a key role in advocating for the interests of the airline industry.

13. FAA (Federal Aviation Administration)

    • The U.S. government agency responsible for regulating civil aviation.
    • Oversees air traffic control, safety standards, and certification of aircraft and pilots.
    • Ensures the safety and efficiency of the national airspace system.

14. Cabin classes (First, Business, Economy)

    • Different levels of service and comfort offered on flights.
    • First class provides the highest level of luxury and amenities, followed by business class and then economy class.
    • Pricing and availability vary significantly between classes.

15. Layover

    • A period of waiting between connecting flights at an airport.
    • Can range from a short duration to several hours, depending on the itinerary.
    • Passengers may need to change terminals or airlines during a layover.

16. Connecting flight

    • A flight that requires a transfer from one aircraft to another to reach the final destination.
    • Often involves a layover at a hub airport.
    • Allows airlines to offer more destinations without direct flights.

17. Non-stop flight

    • A flight that travels directly from the origin to the destination without any stops.
    • Generally preferred by passengers for convenience and time savings.
    • Typically more expensive than flights with layovers.

18. Direct flight

    • A flight that may stop at one or more airports but does not require passengers to change planes.
    • Offers a simpler travel experience compared to connecting flights.
    • May have longer travel times due to stops.

19. Booking class

    • A classification system used by airlines to categorize fare types and seat availability.
    • Each class has different rules regarding changes, cancellations, and mileage accrual.
    • Influences pricing and the level of service provided.

20. Fare basis code

    • A unique code that identifies the specific fare rules and conditions for a ticket.
    • Includes information on pricing, restrictions, and eligibility for upgrades or refunds.
    • Essential for travel agents and airlines to manage ticketing and pricing.