(2.) What is the major advantage of air carriers? How does this advantage impact

Question

(2.) What is the major advantage of air carriers? How does this advantage impact the inventory levels of those firms using air transportation? Explain how this advantage relates to the choice of modes when choosing between air carriage and other modes of freight and passenger transport.

(4.) What is the role of government in air transportation? Include both economic and safety regulations in your answer.

(6.) What is the current situation of labor within the air industry? Are unions a major factor? How does skill level vary within the industry? Do you think this situation is similar to other modes? If so which ones? Explain why?

(8.) How do air carriers price their services? Is the weight or density of the shipment a factor? Explain this factor as part of your answer. How does air carrier pricing relate to the value of the goods being transported?

(10.) What is the cost structure of the air industry? How does it compare with other modes? How does this affect pricing, particularly for passengers? Be sure your answer includes examples from either advertising or the internet?

Explanation / Answer

2) The major advantage of air carrier is time to service. Due to high speed transfer, any material can be moved from one location to another in minimum possible time. It greatly impacts the inventory level as firms need not require storing material for long duration. Thus, inventory levels are low which helps to avoid capital blockage. Also, it helps to reduce stock out situation. In comparison to other modes of transfer, air carrier is preferable for high value items and perishable goods. The other modes like sea or road transfer have high risk due to long transit time. Also, if other modes are used, then inventory level needs to be high due to long lead time and variability in delivery time.

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