M.Com. (Transport Economics) / In the past, air freight was generally a by-product of passenger orientated airlines in the sense that excess payload and unsold passenger seats were sold as air cargo space. In recent years, this trend has changed and it is observed that the air freight industry is increasingly becoming an industry in itself. The individual market share of scheduled international air freight operations within the air transport industry is currently approximately 35,8%. In South Africa, compared to the rest of the world, the historical development of air freight has been slower and confined primarily to the one national carrier (South African Airways (SAA)). The purpose of this study is, to firstly, determine the potential for growth in the air freight market within and outside South Africa. Secondly, to isolate and describe the factors within SAA which are sub-optimal and therefore have a negative impact on the development of the full potential of the air freight services of the carrier. The overall conclusion of the study is that the market for air freight within and outside of South Africa can be expanded significantly. This conclusion is dependent on the positioning and equipping of the freight division of SAA independently from passenger services, together with the provision of specialist knowledge and systems required for effective air freight management.

For many reasons planners in the past have failed to realize the full potential of the market system as a powerful practical and intellectual tool to be used in urban transportation planning. At a time when there is increasing evidence that past approaches to the urban transportation problem have not yielded the long term solutions that were expected, it is urgent that all alternative strategies be explored. This study addresses itself to one policy course: control of urban transportation through the deliberate use of the market mechanism. The objective of the pricing of urban transportation would be to promote a more socially desirable pattern of usage of the system through a structuring of the demand characteristics - by mode, route, time of travel, and amount of travel. Pricing may thus be used to make the trip-maker aware of, and accountable for, the social costs he incurs in the form of delays due to congestion, noise, air pollution, and so forth, and his travel behaviour would alter accordingly. Because these so-called externalities are, at present not quantifiable in monetary terms, and because of differences in individual utilities, the use of the pricing mechanism cannot displace the political decision-making, but can supplement it. This study is an evaluation of the tool of pricing control in urban transportation planning. The theoretical relationships and the rationale for use of the price mechanism are discussed, and the technical and administrative problems of implementation of a pricing scheme are evaluated. The potential impacts are examined. The practical application of the tool is explored in the context of a case study of traffic in the Lions' Gate Bridge Corridor in Vancouver. There are several compelling advantages to the use of the pricing system for achieving both short-run and long-run objectives. It is extremely flexible, adaptable, incremental, reversible, and most schemes can be implemented at very low capital cost. It can be a strategy for restraint or containment of traffic, or more generally a strategy for directing the patterns of use of the transportation system. But there are serious unanswered questions concerning the limitations of the tool - specifically the income redistribution effects and the overall effectiveness of the pricing mechanism in an increasingly affluent society. There are potential long-term impacts which will remain speculative until we have working urban simulation models. Although the direct application of pricing would be practicable in Canada in only a limited number of clearly defined situations, an understanding of the theoretical concepts will assist in the formulation of specific objectives which may then be pursued using alternate tools more suited to each set of circumstances. / Applied Science, Faculty of / Community and Regional Planning (SCARP), School of / Graduate

Considerable attention has been devoted in the past to documenting the impact of prepaid group practices and community health centres on inpatient hospital utilization. The thesis develops and applies a methodology designed to allow estimation of the fiscal implications of such evidence. An equation relating average hospital inpatient costs to a number of explanatory variables is specified. The maximum likelihood estimation technique is employed in a time-series/cross-section analysis to determine parameter estimates for that equation over the period 1966-73. The variables are constructed from data deriving from eighty-seven British Columbia public general hospitals. Empirical results indicate the importance of case mix, average length of inpatient stay, rate of case flow and education-related hospital activities in explaining the variance across the eighty-seven hospitals in average cost per separation. The parameter estimates derived in the unit cost analysis are utilized in a comparative static determination of the implications for unit costs of changes in a hospital's case mix. The impact of case-specific case mix changes on unit (per separation) costs is determined, from which analysis case-specific marginal costs are derived. Finally, the marginal case costs are combined with utilization statistics from matched population studies involving community health centres or prepaid group practices. This allows determination of the expenditure implications of the utilization differentials reported in that literature. A subsequent extrapolative and conjectural analysis considers the cost implications of more widespread use of community health centres as a mode of medical care delivery in British Columbia. The conclusions suggest that the fiscal impact on the overall medical care budget in B.C. would be minimal in the absence of corresponding reductions in numbers of hospital beds. A number of other applications of the case cost derivation methodology are suggested. / Arts, Faculty of / Vancouver School of Economics / Graduate

Vita. / Digitized by Kansas Correctional Industries

Thesis. 1979. M.S.--Massachusetts Institute of Technology. Alfred P. Sloan School of Management. / MICROFICHE COPY AVAILABLE IN ARCHIVES AND DEWEY. / Includes bibliographical references. / M.S.

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The dynamics of airline deregulation have resulted in significant changes in airline competition and network structure. This dissertation examines airline competition and network structures in the presence of low-cost entry in a deregulated environment. / The first chapter investigates the effect of low-cost entry on the equilibrium network choice of a monopolistic air carrier. This essay differs from previous analyses in that it incorporates asymmetric city sizes, and distances as a determinant of costs into the model. Numerical exercises illustrate that the threat of entry may result in an entry accommodating, an entry deterring or even an interlining equilibrium, depending on demand and cost conditions and on the level of fixed costs of connecting city pairs. In particular, when the demand in city-pair markets are identical and cities are equal distance apart, the monopolist restructures its network in an attempt to minimize the competitive effect of entry. If demands vary across city pairs and distance is a factor of cost, then the restructuring of the network may be an entry deterring strategy. The incorporation of distance not only influences the number of direct connections between city pairs but may also affect how city pairs are connected within the network. / In Essay Two the model is extended to a duopolistic airline market in which network structures are endogenously determined by the competition between two incumbent airlines; numerical exercises are then used to demonstrate how the threat of entry by a low-cost airline affects the network choices of these incumbent carriers. The main result of the essay is that, in many situations, incumbent carriers restructure their networks in order to compete with potential entrants. The results indicate that incumbents' response to the threat of entry depends on the potential entrant's cost advantage and on the fixed costs of connecting city pairs. In particular, if the fixed costs of connecting city pairs are low and the cost advantage of the entrant is significant then entry may not affect the network structure of incumbent carriers. However, at higher fixed costs at least one incumbent will adjust its network in an attempt to soften the competitive effect of entry. Furthermore, the numerical exercises show that the threat of entry not only affects the equilibrium network structure but may also result in one incumbent leaving the industry and the potential entrant actually entering. / Essay Three studies network competition and welfare implications in partially and fully liberalized transatlantic markets using the model developed in Essay Two. This essay illustrates some conditions under which the price and welfare effects of an open-skies agreement depend on the equilibrium network choice of the competing airlines. In particular, network choices of airlines may result in higher prices on some transatlantic routes and if pre-liberalized domestic markets are competitive price reductions on domestic routes could be negligible. Another finding is that the opening of transatlantic markets mainly redistribute airlines' market shares and as a result the expected increase in passenger traffic may not be realized.

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M.Com. (Transport Economics) / This study deals with the problem of road user cost recovery in a developing country. Two main problems areas have been identified. The first deals with the shortage of funds for financing road infrastructure. Secondly, the responsibility for financing road infrastructure needs to be established. The first objective of the study was to provide a theoretical discussion on the subject of road user cost recovery. The second objective was to establish how much the road users in the Republic of Transkei currently pay for the use of road infrastructure. Thirdly the study wished to establish how much the road 'users should pay, and the final objective was to find methods for u~ilizing existing and new sources for finance. The empirical data for the study was obtained from licence authorities, a border survey, state departments and municipalities in the Republic of Transkei. The literature study revealed that one of the most important decisions to be made in transport policy is the required level of expenditure on road infrastructure. The two techniques that are generally used to determine this level are earmarking of a fixed percentage of the total goverrunent budget for roads and the establishment of a dedicated road fund. The advantages and disadvantages of a road fund are discussed. The approaches that can be used to recover costs from road users may be divided into three categories: - Tax on vehicle usage that varies with the use of road infrastructure. - Methods aimed at vehicle usage which does not vary with the use of road infrastructure. - Methods that are not based on vehicle usage. The Republic of Transkei applies three methods of road user cost recovery, namely fuel tax, licence fees and levies on abnormal loads. These three methods are a combination of all the basic approaches that can be used to recover cost from road users. The N2 national route is identified as the most important road in the Republic of Transkei. The general condition of roads is poor and not enough funds are spent on maintenance. Costs allocated to road users are maintenance costs, capital costs, and administration costs. The existing method of cost recovery from road users is by means of the road fund levy, by licence fees, customs and excise duty and levies on abnormal loads. An evaluation of the existing recovery system in the Republic of Transkei revealed that the system is unfair, total cost is not recovered and there is no dedicated road funding program. In conclusion it is suggested that the following four elements should be added to the existing method of cost recovery from road users levels: - Increase the tax on fuel. - Reviewing of the existing licence fees. . - Implementation of a border toll system. - Levying of a tax on tyres. It is further recommended that a dedicated road fund is started into which all road user levies are paid. The fund should be administrated by either the Department of Works and Energy or the Department of Transport. The fund should be subjected to all the standard accounting and auditing principles.