Thesis (MBA)--Stellenbosch University, 2001. / ENGLISH ABSTRACT: This study is concerned with the analysis of the factors that contribute to the viabililty of the airline industry. The viability of the airline industry in Africa is the subject of debate amongst African airline executives, governments and potential investors. The debate is a complex one because of the lack of reliable financial data from the airlines themselves. Governments are still financing airlines and it is therefore difficult to assess and evaluate airline viability on the basis of available financial information. This study project describes the industry as a whole, assesses the current situation and identifies an airline statistic that is closely related to airline profitability. The macro economic factors, social and political factors set the framework for the industry. The current situation does not look positive for Africa at that level. African governments, executives and airline organisations are aware of the problems, but an approach to addressing them is still the subject of discussion. The critical success factors of an airline revolve around the management of the balance between revenues and costs. In this case, the load factor was found to be a critical variable. The role played by the load factor in profitability is modelled using correlation and regression techniques. It could be established from the USA data that high regulation distorts the relationship between the load factor and profit. However, when the industry is deregulated and market forces determine the product, price and demand, the load factor has been found to play an important role. A break-even load factor was computed using the statistical techniques. This was then used as a basis for analysis. Although Africa meets the break even load factor, the trend is not improving in line with the America and Europe. It is recommended that the African airline industry need to improve its viability by deregulation, privatisation, forming strategic alliances and product development. / AFRIKAANSE OPSOMMING: Hierdie studiestuk behandel die oorsig van die faktore wat bydra tot die lewensvatbaarheid van die lugdiensbedryf in Afrika tans 'n onderwerp van bespreking tussen Afrika-Iugdiensverteenwoordigers, regerings en potensiele beleggers. Die debat word bemoelik as gevolg van die gebrek aan betroubare finansiële inligting van die lugdienste self. Meeste lugdienste in Afrika word deur regerings finansiel ondersteun en bedryf met die gevolg dat bedryfsresultate moeilik bekombaar is. Dit is dus moeilik om lugdienste se lewensvatbaarheid te bepaal as gevolg van die gebrekkige finansiele inligting. Hiedie studiestuk beskryf die lugdiensbedryf as 'n geheel, ontleed die huidige omstandighede en identifiseer lugdienstatistiek wat lugdienswinsgewendheid similleer. Die makro ekonomiese -, sosiale - en politiekefaktore wat die raamwerk vir die bedryf uitmaak, lyk op hierdie vlak nie positief vir Afrika nie. Regerings in Afrika, uitvoerende besture en lugdiens-organisasies is van hierdie probleem bewus, maar die aanspreeklikheid van hierdie probleem is steeds 'n onderwerp van bespreking. Die kritiese sukses faktore van 'n lugdiens rus om berus op die bestuur van 'n balans tussen inkomste en uitgawes. In hierdie geval is bevind dat die sitplekbesettingsfaktor die kritieke variant is. Die rol wat die sitplekbesettingsfaktor in winsgewingheidsmodelering speel, word deur korrelasie en regressie tegnieke weerspieël. Dit is uit Amerikaanse data vasgestel dat die mate van regulering van lugrederye in Afrika die verhouding tussen sitplekbesettings en wins, verwring. Sodra die bedryf gedereguleer word en markkragte die produk, prys en aanvraag bepaal, is bevind dat die sitplekbesettingsfaktor 'n meer verteenwordigende aanduiding van winsgewindheid weerspieel. Met die gebruik van statistiese tegnieke is 'n gelykbreek sitplekbesettingsyfer bepaal, wat hierdie grondslag van die analise is. Alhoewel lugrederye in Afrika die gelykbreek sitplekbesettingsyfer behaal, verskil dit van die verbeterende tendens in Amerika en Europa. Dit word aanbeveel dat die lugdiensbedryf in Afrika sy lewensvatbaarheid verbeter deur middel van deregulering, privatisering, vorming van strategiese bondgenootskappe, en die ontwikkeling van 'n beter produk.

Thesis (DTech (Tourism and Hospitality Management))--Cape Peninsula University of Technology, 2018. / The airline industry is structurally challenged by its very nature, facing high fixed costs, cyclical demand, intense competition and vulnerability to external shocks. This is exacerbated further by other endogeneous and exogeneous challenges in the operating environment, which make it difficult to operate airlines successfully. Consequently, structural, endogeneous and exogeneous challenges produce thin profit margins for airlines, thereby prompting airline managers to identify critical success factors to these challenges. However, operating airlines in southern Africa has proved to be fraught with difficulties resulting in several airlines terminating their services after short periods of operation, thereby disrupting travellers. The purpose of this research is to identify critical success factors to overcome challenges facing airlines in the region. A mixed-methods research design and an extensive literature review on critical success factors for airlines was employed, followed by several interviews with key personnel at eight southern African airlines. Purposive sampling was used to collect data from 54 respondents from eight different airlines. From the study, it is clear that the ability for airlines to survive financially is seriously threatened by organisational, industry, and environmental success factors. Within the organisation management inefficiency, labour inefficiency, use of aged fleets and management turnover significantly affected negatively the performances of state carriers, whilst alliances and the use of a standardised fleet significantly affected positively the performances of private airlines. The following environmental success factors namely, political, economic and technological factors, significantly affected negatively the performances of all airlines. Furthermore, national airlines received preferential treatment, which often distorted any prospect of a level playing field, thereby preventing privately owned carriers from competing effectively. The following industry success factors namely, rivalry amongst existing competitors, the bargaining power of suppliers and the bargaining power of customers significantly affected negatively the performances of airlines. As such, the following industry success factors were identified, namely the low threat of substitutes and new entrants, which are not enough to mitigate intense rivalry and the high bargaining power of customers and suppliers. Several suppliers can squeeze airlines, and even though the threat of new entrants is low, wherever there is potential, there will be new entrants, creating overcapacity and reducing yields. Consequently, to overcome challenges in the region the following organisational success factors were identified, namely management efficiency, the use of a modern fleet, fuel efficiency, labour efficiency, alliances, aircraft choice and customer satisfaction.

The study involves, describing the nature of the airline industry, especially in the African situation with some of its problems being high airfares and inaccessibility within the continent. In order to address these problems an analysis of the minimal operating costs and challenging factors affecting route costs needs to be carried out. The aim of the study was to develop from first principles, a cost model to calculate operating costs along any route in the African continent. The costing of an airline service is reviewed through existing literature and a compilation of the structure, components and their equations and default values was done. A model structure to calculate these operating costs on a route is set up, while data is analysed to provide inputs to the model. The model is then applied to carry out an analysis of the type of service provided in terms of costs and service quality. Africa specific data is then included in the model in terms of passenger trips and sector distances and these are embedded into the model. The main conclusion drawn from the study was that this model could be used to design optimally an airline service based on operating costs using existing passenger demand and sector distance. The model was applied to a route within Africa and results showing how smaller capacity aircraft even though limited by maximum range are the most economical to run along routes when the frequency of flights is high. / Dissertation (M Eng (Transportation Engineering))--University of Pretoria, 2006. / Civil Engineering / unrestricted