An airline typically tries to sell tickets roughly three weeks before any given flight to stockpile cash. The airline then operates the flights and ultimately pays vendors about 120 days later. This is oversimplified, but it represents the general industry model. Real-world operations are of course vastly more complex. This week we have more insight into US airline operations focusing on taxi times and the potential impact of time savings for the industry.
We can divide airline flight operations into two parts: ground ops and flight ops. This may be simplistic, too, but follow our thinking. The meat and potatoes of the business is moving people and goods. The greater the efficiency, the more likely an airline is profitable. What are the efficiencies an airline can control with respect to these two operations? After all, airlines operate in a highly-regulated arena.
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