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Air Transportation Management

  1. MAINLINE AIRLINES – A type of passenger airline like PAL and Cebu Pacific that can accommodate a large
    volume of passengers (100+).
  1. CHARTERS – A private type of airline for unscheduled flights. Usually, these are privately owned companies.
  2. COMMUNITY AIRPORTS – For general aviation use such as flight training and private flights.
  3. CARTEL – Organizations focus on “price fixing“ on the market.
  4. SAFETY MANAGEMENT SYSTEM (SMS) – It’s about safety and risk management in the company.
    Example: In APLUS: They have SMS training for supervisors.
  5. DEPRECIATION – In businesses, this reduces taxable income. They generate tax savings.
  6. TAX DEDUCTION – The higher the depreciation expenses, the lower the taxable income.
  7. SALE AND LEASEBACK METHOD – Airlines sell their aircraft, then lease the aircraft from the company
    they sold it from.
  8. FUEL HEDGING – Airlines will have fixed or capped fuel costs by forming a contract. This is helpful for
    budgeting since they will about the risk of increasing fuel prices in the future.
  9. APPROVED MAINTENANCE ORGANIZATION (AMO) – Companies approved by the state and ICAO to perform
    aircraft maintenance.
  10. APPROVED TRAINING ORGANIZATION (ATO) – Qualified organization offering aviation skills training.
  11. GROSS DOMESTIC PRODUCT (GDP) – Market value of goods and services in a country per year. An increase
    in GDP will grow the aviation industry.
  12. DOMESTIC FEEDER SERVICES – Transfer of passengers locally.
    Example: People in Davao will go to Manila for international flights. This will increase local air transport
  13. DIRECT ECONOMIC IMPACT – Effects of aviation industry activities in the local area such as an increase in
    the salary of employees, and expenditures that lead to local business activity.
  14. RP 776 – Reorganize CAB. ATO, and CAA to provide regulations to CAAP.
  15. AIRLINE PASSENGER LOAD FACTOR – Percentage of filled seats sold over the total number of seats of a
  16. GROUND SERVICES – Include all the ground handling tasks in the airport such as ramp, cargo, postal, flight
    operations, and surveillance services.
  17. EO 219 – Executive order establishing the Domestic and International Civil Aviation Liberalization Policy.
  18. OLIGOPOLY – A market structure in which a market or industry is dominated by a small number of large
    sellers or producers.
  1. Act No. 3996 – An act concerning the licensing of airmen and aircraft, inspection, air traffic rules, schedules
    and rates of aviation companies, and the enforcement of the law.


  1. CONFIGURATION DEVIATION LISTS (CDL) – Declared by mechanics when they approved the aircraft to fly
    even though some external parts of an aircraft are missing. The aircraft is airworthy even with missing
  2. MINIMUM EQUIPMENT LIST (MEL) – The aircraft is still airworthy even though some minor parts are
  3. ASSOCIATIVE METHOD – The statistical relationship between the forecasted (dependent) variable and
    explanatory (independent) variables.
  4. Out of Service Time – The time when the aircraft is unprofitable.
  5. 16 hours – Daily limit maximum flight time for pilots.
  6. 10 hours – Rest period of pilots when they reached 16 hours shift in a day.
  7. COMMONALITY – Operating a standardized fleet of aircraft that share common parts, and other
  8. RATIONALIZATION – Making a company more efficient by using quality equipment and hiring the right people.
  9. STANDARDIZATION – Simplifying things and processes to reduce cost.
  10. 100 HOURS – Limit of pilots to fly in 1 calendar month.
  11. 8 HOURS – Rest period of flight crews in any 24-hour period.
  12. 40 FLIGHT HOURS – Maximum flight duty of flight crews in 7 consecutive days.
  13. 24 HOURS – Minimum time to rest from duty of a flight crew for the week.
  14. IN-SERVICE – Aircraft flown on scheduled services.
  15. OUT-OF-SERVICE – Aircraft temporarily assigned for maintenance or special projects.
  16. LINE RESERVES – Extra aircraft used for backup.
  17. ACCELERATED DEPRECIATION – Makes depreciation faster such as postponing taxes over the life of the
    asset, increasing the rate of return on that asset.
  18. OPERATING LEASE – The leasor remains the title of the asset. A noncancelable short-term lease.
  19. FINANCIAL (CAPITAL) LEASE – Title passes to the lessee. Title of the asset remains with the leaser until
    all payments are done.
  20. COMPUTERIZED RESERVATION SYSTEMS (CRS) – Displays airline schedules and prices for the agents to
    make reservations.


  1. BOARD OF DIRECTORS – The chief governing body of a corporation made by the stockholders. They elect
    the president and other executive officers.
  2. TOP MANAGEMENT – Under the board of directors is the top management. Includes CEO, executive VP, and
    senior VP.
  3. MIDDLE MANAGEMENT – They interpret policies and are responsible for developing operational plans and
  4. OPERATING MANAGEMENT – Focus on the execution of policies. It includes managers, assistant managers,
    section chiefs, general supervisors, and supervisors who head up departments.
  5. LINE DEPARTMENT – They produce and sell air transportation products. Examples: flight operations,
    engineering, maintenance, marketing, and other services.
  6. FIXED COST – Remain the same regardless of the sale.
  7. DEFERRED TAXES – Refer to certain taxes that companies are required to collect for various taxing
    authorities, including federal excise and state sales taxes and payroll withholding of employee income taxes.
  8. VENTURE CAPITAL – Money is invested in business enterprises that generally do not have access to
    conventional sources of capital.
  9. SELF-FINANCING RATIO – The proportion of capital expenditure financed from internal sources.
  10. DEPRECIATION – This represents the airlines’ largest single source of internal funds.
  11. OPEN JAW – The departure and the destination are not the same each way.
  12. APEX FARE – Fares are usually purchased in advance.
  13. BEREAVEMENT FARE – Offer them to family members for funerals, or in the case of imminent death.
  14. LAW OF DEMAND – States that other factors being constant, price and quantity demand of any good and
    service are inversely related to each other.
  15. ELASTICITY OF DEMAND – Percentage change in passenger demand over the percentage change in price.
  16. A-CHECK – Every 125 flight hours (2-3 weeks), Involves pre-flight visual inspections.
  17. B-CHECK – Every 750 flight hours (3-4 months). Involves preventative maintenance, oil and lubrication
    replenishment, and all tasks from A-check.
  18. C-CHECK – Every 3,000 flight hours (15 months). Incorporates A and B-check, flight control calibration,
    structural inspections, and post-check flight tests.
  19. D- CHECK – Every 20,000 flight hours (6-8 years). Parts are removed for structural inspection. The aim is
    to return the aircraft to its original condition.
  20. DIRECT OPERATING COSTS – Include all flying expenses and all aircraft depreciation expenses. Ex. Aircraft
    insurance, oil and fuel cost, and employee salaries.

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