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UBC Theses and Dissertations

The impact of charter carriers on scheduled operations Feldstein, Sidney 1971

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THE IMPACT OF CHARTER CARRIERS ON SCHEDULED OPERATIONS by V, SIDNEY FELDSTEIN .Comm., Univers i ty of B r i t i s h Columbia, 1969 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION i n the Faculty ••V of-Commerce and Business Adminis trat ion We accept th i s thes is as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA A p r i l , 1971 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h C o lumbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r agree t h a p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u rposes may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f The U n i v e r s i t y o f B r i t i s h Columbia Vancouver 8, Canada Date ^7^^ ZjT/7/ The c h a r t e r m a r k e t o f t h e a i r l i n e i n d u s t r y has .pro-g r e s s i v e l y grown f r o m an i n s i g n i f i c a n t segment i n i n t e r n a t i o n a l t r a f f i c t o a r e l a t i v e l y s i g n i f i c a n t one d u r i n g . t h e l a s t d e c a d e . What a f f e c t has t h e g r o w t h . o f t h e i n t e r n a t i o n a l c h a r t e r m a r k e t had. on s c h e d u l e d o p e r a t i o n s ? The s c h e d u l e d o p e r a t o r s s t a t e t h a t c h a r t e r s d i v e r t a s u b s t a n t i a l amount o f p a s s e n g e r t r a f f i c away f r o m them t h e r e b y j e o p a r d i z i n g t h e i r c r o s s - s u b s i d i z a t i o n s y s t e m . On t h e o t h e r hand, c h a r t e r o p e r a t o r s c l a i m t h a t n o t o n l y do t h e y s e r v e an e n t i r e l y d i f f e r e n t m a r k e t segment o f demand f o r a i r t r a v e l i t h e r e b y c a u s i n g no d i v e r s i o n b u t t h a t t h e y i n f a c t g e n e r a t e a d d i t i o n a l b u s i n e s s f o r t h e a i r l i n e i n d u s t r y as a w h o l e . The p u r p o s e o f t h i s p a p e r t h e n , i s t o a t t e m p t t o d e t e r m i n e t h e i m p a c t , i f any, t h a t c h a r t e r c a r r i e r s may have on. s c h e d u l e d o p e r a t i o n s . A number o f h y p o t h e s e s were d e v e l o p e d w h i c h , when i n v e s t i g a t e d , w o u l d i n d i c a t e . w h e t h e r o r n o t c h a r t e r f l i g h t s d i v e r t p a s s e n g e r s away f r o m s c h e d u l e d f l i g h t s . D a t a t o t e s t t h e s e h y p o t h e s e s were o b t a i n e d f r o m q u e s t i o n n a i r e s d i s t r i b u t e d , d u r i n g t h e summer o f 1970, t o t r a n s - A t l a n t i c p a s s e n g e r s on c h a r t e r and s c h e d u l e d f l i g h t s . The sample s i z e c o n s i s t e d o f 182 c h a r t e r p a s s e n g e r s and 100 s c h e d u l e d p a s s e n g e r s . The g e n e r a l c o n c l u s i o n was t h a t c h a r t e r and s c h e d u l e d p a s s e n g e r s h a ve d i f f e r e n t d e m o g r a p h i c c h a r a c t e r i s t i c s . T h i s i m p l i e s t h a t c h a r t e r c a r r i e r s may serve a d i f f e r e n t market segment of demand f o r i n t e r n a t i o n a l a i r t r a v e l . However, when the c h a r t e r passengers, n o t w i t h s t a n d i n g t h e i r demographic c h a r a c t e r i s t i c s , were asked i f they would s t i l l take t h i s t r i p to Europe, e i t h e r now or i n the near f u t u r e , ' i f they had to f l y on a scheduled a i r l i n e r . a n d pay the r e g u l a r f a r e , almost f i f t y . p e r c e n t responded i n the a f f i r m a t i v e . T h e r e f o r e , i t appears t h a t , over the t r a n s - A t l a n t i c r o u t e , c h a r t e r c a r r i e r s d i v e r t a s u b s t a n t i a l amount of passenger t r a f f i c away from scheduled c a r r i e r s . ACKNOWLEDGEMENTS The w r i t e r w i s h e s t o e x p r e s s h i s s i n c e r e s t a p p r e c i a -t i o n t o Mr. D. Matthews, c h a r t e r o r g a n i z e r o f t h e P a c i f i c I n t e r n a t i o n a l Sea and S k i A s s o c i a t i o n , Mr. M.T. N i c h o l s o n o f P. Lawson T r a v e l L t d . , c h a r t e r o r g a n i z e r o f t h e V a n c o u v e r S u p p e r - C l u b and E n g l i s h S p e a k i n g U n i o n , and Mr. H.T. B a n c r o f t , C u s t omer S e r v i c e Manager w i t h C P A i r f o r t h e i r p e r m i s s i o n t o d i s t r i b u t e q u e s t i o n n a i r e s t o t h e i r m e m b e r s / p a s s e n g e r s . W i t h o u t t h e i r c o - o p e r a t i o n , t h i s t h e s i s c o u l d n o t have been u n d e r t a k e n . I n a d d i t i o n , g r a t i t u d e i s . o w e d t o Mr. B. Mayhew, S e n i o r M a r k e t A n a l y s t w i t h A i r Canada and Mr. T. Dyck, Customer S e r v i c e R e p r e s e n t a t i v e . w i t h C P A i r who, on many o c c a s i o n s , were k i n d enough1]':, t o t a k e t h e t i m e t o answer v a r i o u s i n q u i r i e s . A l s o , - t h e w r i t e r , w o u l d l i k e t o t h a n k Mr. W. Swanson, A s s i s t a n t P r o f e s s o r o f M a r k e t i n g , f o r h i s h e l p f u l a s s i s t a n c e i n d e v e l o p i n g t h e q u e s t i o n n a i r e s and i n o r g a n i z i n g t h e p r e s e n t a t i o n o f t h i s p a p e r - a n d t o Dr. J . W e l s b y , A s s i s t a n t P r o f e s s o r o f T r a n s p o r t a t i o n , f o r h i s i n v a l u a b l e a i d i n g i v i n g t h e a u t h o r a d d i t i o n a l i n s i g h t i n t o t h e a i r l i n e i n d u s t r y . ONE • . . . . . . . . . . . . . . . . • . . 1 Introduction . . . . . . . . 1 Purpose pf the Study . . . . . . . . . . . . 6 De f in i t ions of Terms . 6 Scope of the Study . 8 Organization of the Study 9 TWO • . . . . . . . . . . . . . . . . . . 10 Relevant L i t e ra ture 10 THREE - 14 Research Hypotheses 14 FOUR • 23 Research Methodology . . . . . . . . . . . . 23 L imita t ions of • the Methodology . . 28 FIVE 29 Research Findings . . . . . . . . 29 SIX . . . . . . . . . . . . . . . . . . . 43 Summary . . . . . . . . . . . 43 Conclusions 43 • Concluding Comments 46 Suggestions for Further Research . . . . . . 49 BIBLIOGRAPHY 52 APPENDICES. . . 54 TABLE' Page I. Interdependence of Income, Occupation, M a r i t a l Status, and Sex Variables 15 I I . Reasons for not Previously T r a v e l l i n g by A i r : Charter and Scheduled Passengers ' 31 I I I . Income Comparison: Charter and Scheduled Passengers . . . . . . . . 31 IV. Occupation Comparison: Charter and Scheduled•Passengers . . . . . . . . . . . 32 V. Age Comparison: Charter and Scheduled Passengers . . . . . . . . . . . . . . . . 34 VI . M a r i t a l Status Comparison: Charter and Scheduled Passengers . . . . . . 36 V I I . Sex Comparison: Charter and Scheduled Passengers . ' 36 V I I I . Ranking of Modes of Transportat ion According to Safety: Charter.Passengers. . 3 8 IX. Ranking of Modes of Transportat ion According to Safety: Scheduled Passengers . . . . . . . . . . . . . . . . 38 X. Charter Passengers' Wil l ingness to Pay the Scheduled Fare . . . . . . . . . . . . 40 LIST OF APPENDICES I. Destinations of Charters Or ig ina t ing i n Canada . , . . . . . . . . . . 54 I I . Destinations of A i r Canada's and C P A i r ' s , Internat ional Scheduled F l i g h t s • . 55 I I I . Charac te r i s t i c s of Passengers i n Se lec t ion Markets 56 IV. Questionnaire Di s t r ibuted to Charter Passengers 57 V. Quest ionnaire ,Dis tr ibuted to Scheduled Passengers 62 VI . Canadian Or ig ina t ing Charterers : Summer 1969 66 VI I ; Tota l A t l a n t i c Charter Passenger Flow: 1968 and 1969 67 INTRODUCTION In the e a r l y I960 1 s i n t e r n a t i o n a l c h a r t e r operations"*" i n v o l v i n g Canadian c a r r i e r s were q u i t e s p o r a d i c . During t h i s p e r i o d the m a j o r i t y of i n t e r n a t i o n a l . . c h a r t e r o p e r a t i o n s were conducted p r i m a r i l y by A i r Canada and CPAir. The other Canadian c a r r i e r s o p e r a t i n g i n t e r n a t i o n a l c h a r t e r f l i g h t s , n otably P a c i f i c Western A i r l i n e s , N o r d a i r , Wardair, and Worldwide, were unable a t . t h a t time to develop t h i s segment of demand f o r a i r t r a v e l . . They were unable to do so because of the outdated c r a f t they had".in o p e r a t i o n i n comparison to Canada's m a i n l i n e sched-u l e d o p e r a t o r s and f o r e i g n scheduled and non-scheduled o p e r a t o r s . However, by the mid s i x t i e s , the c h a r t e r , o p e r a t o r s , by o f f e r i n g j e t s e r v i c e , began to make s i g n i f i c a n t inroads i n t o the i n t e r -n a t i o n a l market segment of the a i r l i n e i n d u s t r y . With the i n f l u x of c h a r t e r operators i n t o the a i r l i n e i n d u s t r y , ...the composition of i n t e r n a t i o n a l a i r . t r a n s p o r t s e r v i c e s changed r a p i d l y d u r i n g the.seven year p e r i o d between 1961 and 1968, due to the phenomenal Author's Note: Whenever i n t e r n a t i o n a l a i r l i n e s e r v i c e s are r e f e r r e d to, exclude f l i g h t s to the c o n t i n e n t a l United S t a t e s . 2M. Rozumiah, "Canada's I n t e r n a t i o n a l C h a r t e r Market" (unpublished Bachelor's t h e s i s , F a c u l t y of Commerce, U n i v e r s i t y of B r i t i s h Columbia, 1970), p. 9. expansion of the c h a r t e r market. The number of -Pro Rata and E n t i t y : p a s s e n g e r s r e p r e s e n t e d by t r a n s - A t l a n t i c c h a r t e r f l i g h t s approved rose from 4 2 , 4 5 3 i n 1 9 6 1 to 3 5 3 , 5 5 3 i n 1 9 6 8 , an i n c r e a s e of 732.8 p e r c e n t . Over-the same p e r i o d , the number of u n i t t o l l revenue pas- . sengers l e a v i n g and e n t e r i n g Canada c a r r i e d by i n t e r n a t i o n a l scheduled c a r r i e r s grew from 2 , 0 0 5 , 6 4 0 i n 1 9 6 1 to an estimated 4 , 8 0 5 , 0 0 0 i n 1 9 6 8 , a growth of 1 3 9 . 6 p e r c e n t . These i n -creases are e q u i v a l e n t to a compounded average annual r a t e of growth of 35.4 p e r c e n t f o r c h a r t e r s e r v i c e s and-13.3 p e r c e n t f o r sched-, u l e d s e r v i c e s . As a r e s u l t , the c h a r t e r mar-ket has p r o g r e s s i v e l y grown from an i n s i g n i f i -cant segment i n i n t e r n a t i o n a l t r a f f i c to a r e l a t i v e l y s i g n i f i c a n t one i n l e s s than a decade.^ To demonstrate the impact t h a t the growth of the t r a n s - A t l a n t i c c h a r t e r market has had on Canada's m a i n l i n e scheduled c a r r i e r s , an A i r Canada Annual Report ( 1 9 6 9 ) s t a t e s , "While.the t o t a l Canada-Europe market grew by an estimated 27 p e r c e n t , scheduled t r a f f i c i n c r e a s e d by only 8 p e r c e n t . The d i s p a r i t y i n growth r a t e s was due to the severe inroads made by 4 • non-scheduled o p e r a t o r s . " A t t h i s p o i n t i n time, A i r Canada i s probably more concerned w i t h the growth of the i n t e r n a t i o n a l c h a r t e r market than i s CPAir. Appendix I on page 54 i l l u s t r a t e s t h a t the m a j o r i t y of i n t e r n a t i o n a l c h a r t e r t r a f f i c f l i e s over the North A t l a n t i c and South P a c i f i c and to the Caribbean. Appendix I I on page .55 p o i n t s out t h a t c h a r t e r f l i g h t s to these d e s t i n a t i o n s compete with 100 percent of A i r Canada's and 70 per-cent of CPAir's i n t e r n a t i o n a l scheduled - f l i g h t s . However, - i n 3 D.A.D. Saart y , Future of the I n t e r n a t i o n a l A i r Charter Market, A Report to the F i f t h Annual Meeting of the Canadian T r a n s p o r t a t i o n Research Forum, Toronto,.May 5-7, 1 9 6 9 , pp. 3,4. 4 A i r Canada, Annual Re p o r t , 1 9 6 9 , p. 5. the future,, as c h a r t e r f l i g h t s become more popular and as new d e s t i n a t i o n s are sought, some of CPAir's other i n t e r n a t i o n a l routes may face s t r o n g e r c o m p e t i t i o n from the c h a r t e r opera-t o r s . Canada's m a i n l i n e c a r r i e r s are concerned .with the growth of the i n t e r n a t i o n a l c h a r t e r market because i t jeopar-d i z e s t h e i r c r o s s - s u b s i d i z a t i o n system. T h i s c r o s s - s u b s i d i -z a t i o n dilemma can be o u t l i n e d as f o l l o w s : The scheduled c a r r i e r s operate a year-round rou t e system on a r e g u l a r b a s i s , p a r t s of which are p r o f i t a b l e and p a r t s of which are not. Some routes are n e v e r , p r o f i t a b l e , and some are only p r o f i t a b l e d u r i n g the peak season. To c a r r y such a system, the sched-u l e d ^ . a i r l i n e s r e q u i r e a complex system of c r o s s - s u b s i d y . I f u n p r o f i t a b l e routes are to be operated then excess p r o f i t s must be earned on other r o u t e s j otherwise the c a r r i e r would be i n a d e f i c i t . The c h a r t e r c a r r i e r s do not operate any.un-p r o f i t a b l e routes and, as a r e s u l t , they have no requirements f o r excess p r o f i t s with which to c r o s s - s u b s i d i z e . T h e r e f o r e they can, and do, o f f e r s i g n i f i c a n t l y l o w e r - f a r e s on what have been t r a d i t i o n a l l y the heavy p r o f i t routes of the scheduled a i r l i n e s . By doing t h i s , . t h e y are skimming the cream o f f the t r a f f i c and e v e n t u a l l y the,scheduled c a r -r i e r s w i l l l o s e t h e i r excess p r o f i t s and w i t h them the a b i l i t y to c r o s s - s u b s i d i z e to the. u n p r o f i t a b l e routes.5 As s t a t e d above, because the c h a r t e r c a r r i e r s do not operate u n p r o f i t a b l e r o u t e s , they can o f f e r s i g n i f i c a n t l y lower 5 L e t t e r from P.D. Watson, Market A n a l y s t , A i r Canada (Montreal), March„3, 1970. Author's Note: T h i s .argument w i l l be more f u l l y d i s c u s s e d :and a p p r a i s e d i n Chapter S i x . f a r e s than scheduled c a r r i e r s . The f a r e s the c h a r t e r c a r r i e r s . s e t are those which would guarantee f u l l c a p a c i t y w h i l e p r o v i -ding f o r a modest p r o f i t . The Canadian scheduled,operators cannot o f f e r competi-t i v e f a r e s on t h e i r scheduled f l i g h t s because they have, as i n d i v i d u a l companies, l i t t l e c o n t r o l over the s e t t i n g of i n t e r -n a t i o n a l f a r e s . The s e t t i n g of i n t e r n a t i o n a l f a r e s i s one of the f u n c t i o n s of the I n t e r n a t i o n a l A i r T r a n s p o r t A s s o c i a t i o n (IATA),,a c a r t e l of"104 a i r l i n e s from 84 c o u n t r i e s . Rates and • f a r e s are d i s c u s s e d a t annual IATA t r a f f i c conferences comprised of r e p r e s e n t a t i v e s of a l l member c a r r i e r s i n t e r e s t e d i n , the o p e r a t i o n of routes concerned. T h e r e f o r e , any r e s o l u t i o n r e g a r -d i n g f a r e s .would be, i n a l l l i k e l i h o o d , i n the form of a compro-mise and not n e c e s s a r i l y . i n the i n t e r e s t s of any one a i r l i n e . The a b i l i t y , o f the c h a r t e r : o p e r a t o r s to o f f e r lower f a r e s thereby d i v e r t i n g passenger t r a f f i c away from scheduled ope r a t o r s i s the crux of the argument presented by the,scheduled o p e r a t o r s . On the other hand, the c h a r t e r o p e r a t o r s c l a i m t h a t they serve a d i f f e r e n t market f o r i n t e r n a t i o n a l a i r t r a v e l . T h i s market demands i n e x p e n s i v e group t r a v e l . The c h a r t e r o p e r a t o r s b e l i e v e t h a t , "there i s a p u b l i c requirement f o r t h i s type of t r a v e l and t h a t the governing r e g u l a t i o n s should be d r a f t e d to ensure t h i s requirement i s met." Laidman remarks t h a t , "As ^In a l e t t e r . f r o m G.D. C u r l e y , E x e c u t i v e : t o the P r e s i -dent, Wardair (Edmonton), February 12., 1970. high -as s i x t y p e r c e n t of our passengers are t a k i n g t h e i r f i r s t f l i g h t and they would not have come aboard except f o r the 7 cheaper f a r e . " In the past , the scheduled operators have ign o r e d t h i s market.- To quote Donald Jamieson, M i n i s t e r of Tr a n s p o r t , "In t h e . e a r l y days there was a tendency f o r the scheduled c a r r i e r s to s t a r t l o o k i n g down t h e i r noses a t t h i s b u s i n e s s , - t o f e e l t h a t i t r e a l l y wasn't f o r them and t h a t i n some way or other t h a t they were g i v i n g e x t r a b e n e f i t s of one g k i n d or another t h a t would keep the t r a f f i c going with,them." The c h a r t e r o p e r a t o r s , i n p r e s e n t i n g t h e i r argument, proceed to suggest t h a t c h a r t e r f l i g h t s are a market broadening d e v i c e i n t h a t they a i d scheduled o p e r a t o r s by i n t r o d u c i n g more people to a i r t r a v e l . Laidman comments t h a t , "Eighty p e r c e n t of the Canadian p o p u l a t i o n have never flown. But there i s com-f o r t f o r those making t h e i r f i r s t overseas t r i p i n the companion-sh i p of people they know. A f t e r they f i n d out how easy i t i s 9 to f l y , they are prone t o then take t r i p s on t h e i r own." To summarize, there are two p o i n t s of view as to the e f f e c t of the.growth of the i n t e r n a t i o n a l c h a r t e r market. Scheduled operators c l a i m t h a t c h a r t e r o p e r a t o r s compete d i r e c t l y with t h e i r scheduled f l i g h t s w h i l e c h a r t e r operators s t a t e t h a t they serve a d i f f e r e n t market segment. _ R.H. Laidman, quoted i n "Charter--Only Way- to F l y , " The Sun, (Vancouver-, Canada, March 29, 1969), p. 25. g D. Jamieson, quoted i n "The Charter R e v o l u t i o n , " The F i n a n c i a l Post . (November 28, 1970), p. 15. ^Laidman, l o c . c i t . Purpose of the Study The purpose of t h i s paper i s to i n v e s t i g a t e the impact of the growth of the i n t e r n a t i o n a l c h a r t e r market on.the scheduled a i r l i n e c a r r i e r s . S p e c i f i c a l l y , to a s c e r t a i n whether or not c h a r t e r c a r r i e r s d i v e r t passenger t r a f f i c away from scheduled c a r r i e r s on t r a n s - A t l a n t i c r o u t e s . D e f i n i t i o n s of Terms A i r C a r r i e r : -Any person or company which i s l i c e n s e d to operate a commercial a i r s e r v i c e . Scheduled C a r r i e r : . T r a n s p o r t s passengers, m a i l or cargo f o r renumeration i n such a manner t h a t each f l i g h t i s open to use by the p u b l i c and i s operated so as to serve t r a f f i c between the same two or more p o i n t s e i t h e r (a) a c c o r d i n g to a p u b l i s h e d t i m e t a b l e or (b) with f l i g h t s so r e g u l a r , o r f r e q u e n t t h a t they c o n s t i t u t e a r e c o g n i z a b l e s y s t e m a t i c s e r i e s . C h a r t e r or Non-Scheduled C a r r i e r : R e s t r i c t e d to. c a r r y -i n g passengers or f r e i g h t on a c h a r t e r b a s i s only.• The term " c h a r t e r " covers s e v e r a l d i f f e r e n t types; s i n g l e e n t i t y , a f f i n i t y or p r o - r a t a , and i n c l u s i v e tour c h a r t e r s . S i n g l e E n t i t y C h a r t e r : A c h a r t e r i n which the c o s t of t r a n s p o r t a t i o n of passengers or-cargo i s p a i d by one person, company - or o r g a n i z a t i o n . A f f i n i t y or Pro Rata C h a r t e r : A c h a r t e r i n which the passengers t r a n s p o r t e d share i n p a r t or i n f u l l the c o s t of t r a n s p o r t a t i o n . . That i s , the c o s t i s p r o - r a t e d to each member usi n g the t r a n s p o r t a t i o n . Space on a. c h a r t e r i s not a v a i l a b l e , per se, to the p u b l i c . A f f i n i t y ; C h a r t e r Group: A group c o n s i s t i n g s o l e l y of persons who w i l l have been f o r a p e r i o d of at l e a s t s i x months p r i o r t o the date of the commencement of the proposed c h a r t e r , f l i g h t , bona f i d e members i n good s t a n d i n g of a n . o r g a n i z a t i o n " ^ whose aims,. purposes, o b j e c t i v e s a n d a c t u a l a c t i v i t i e s are e s t a b l i s h e d to the s a t i s f a c t i o n of the A i r Tr a n s p o r t Committee to be other than t r a v e l , are pursued i n p r a c t i c e and are not merely t h e o r e t i c a l or f a n c i f u l . A l s o the o r g a n i z a t i o n . c a n n o t p u b l i c l y a d v e r t i s e the f l i g h t . . I n c l u s i v e Tour C h a r t e r : A c h a r t e r i n which the c h a r t e r p r i c e i n c l u d e s as a minimum, the c o s t of t r a n s p o r t a t i o n and accom-modation f o r the p e r i o d the p a r t i c i p a n t s are away from the s t a r t i n g p o i n t o f ' t h e t r i p and may i n c l u d e ;other s e r v i c e s and f a c i l i t i e s . C h a rter O r g a n i z e r : One who i s the i n t e r m e d i a r y between the c h a r t e r i n g . o r g a n i z a t i o n and the a i r l i n e company o f f e r i n g . t h e c h a r t e r . ' He can be e i t h e r an o f f i c i a l of the "^Author's Note: The o r g a n i z a t i o n i t s e l f must be one t h a t was formed a t l e a s t one year p r i o r to the commencement of the proposed f l i g h t . c h a r t e r i n g o r g a n i z a t i o n , a r e p r e s e n t a t i v e of the a i r l i n e company, or an independent t r a v e l agent. Ch a r t e r Timetable: •The l e n g t h of time between the departure from and r e t u r n to the p o i n t from which t h e , c h a r t e r o r i g i n a t e d . U n i t T o l l Passenger: • One who pays a n , i n d i v i d u a l regu-l a r f a r e . Scope of the Study As mentioned above, there are : t h r e e types of c h a r t e r s . However, only the impact of the a f f i n i t y c h a r t e r on scheduled operators' i s analyzed as i t - i s the one which most d i r e c t l y competes with scheduled s e r v i c e s . The e n t i t y : c h a r t e r i s excluded from the i n v e s t i g a t i o n as only one person or o r g a n i z a t i o n pays f o r the c h a r t e r and t h e r e f o r e , cannot be c o n s i d e r e d to compete with scheduled s e r v i c e s where each passenger or passenger group i s r e s p o n s i b l e f o r h i s / i t s own f a r e . Although the i n c l u s i v e ; t o u r . c h a r t e r i s d i s c u s s e d i n the f o l l o w i n g chapter, i t i s a l s o , omitted 'from the a n a l y s i s as the primary concern of t h i s paper i s the a i r t r a v e l p o r t i o n of a v a c a t i o n and not any subsequent N tours or accommodations. The t r a n s - A t l a n t i c • r o u t e i s the f o c a l p o i n t of t h i s study which was conducted d u r i n g the summer of 1970. . The t r a n s -A t l a n t i c r o u t e was chosen because the process .of g a t h e r i n g data c o u l d be e x p e d i t e d . I t c o u l d be expedited i n . the sense t h a t d u r i n g the summer p e r i o d , not only do scheduled o p e r a t o r s i n c r e a s e the number of scheduled f l i g h t s over the t r a n s - A t l a n t i c but a l s o there are more c h a r t e r f l i g h t s .to t r a n s - A t l a n t i c • d e s -t i n a t i o n s than to any other i n t e r n a t i o n a l d e s t i n a t i o n . O r g a n i z a t i o n of the Study Chapter Two d i s c u s s e s the l i t e r a t u r e t h a t was u s e f u l i n d e v e l o p i n g the r e s e a r c h hypotheses of t h i s study-. Chapter Three presents these hypotheses - and the reasons they must be i n v e s t i g a t e d i n order to a s c e r t a i n whether or not c h a r t e r opera-t o r s d i v e r t passenger t r a f f i c away- from scheduled o p e r a t o r s on t r a n s - A t l a n t i c r o u t e s . Chapter Four r e l a t e s and j u s t i f i e s the methodology used i n c o l l e c t i n g data to analyze the hypotheses. The l i m i t a t i o n s of t h i s methodology are a l s o noted. Chapter F i v e - t a b u l a t e s the f i n d i n g s of the q u e s t i o n -n a i r e s used i n t h i s study. Chapter S i x draws c o n c l u s i o n s and suggests, areas f o r f u r t h e r research.-RELEVANT LITERATURE The l i t e r a t u r e presented i n t h i s chapter was c o n s i d e r e d i n f o r m u l a t i n g the r e s e a r c h hypotheses of t h i s study and i n developing meaningful que s t i o n s asked of c h a r t e r and scheduled passengers on t r a n s - A t l a n t i c f l i g h t s . As r e c e n t s t u d i e s have concerned themselves with i n c l u s i v e tour c h a r t e r s and not a f f i n i t y c h a r t e r s , the r e s u l t s of i n c l u s i v e tour c h a r t e r s t u d i e s w i l l be d i s c u s s e d . A study conducted by the I n t e r n a t i o n a l C i v i l A v i a t i o n Organization"'""'" made a d i s t i n c t i o n between i n c l u s i v e tour pas-sengers on c h a r t e r s e r v i c e s and those on scheduled s e r v i c e s . I n c l u s i v e tour c h a r t e r passengers,tended to have average or below average income, were e i t h e r unmarried and between the ages of eight e e n to t h i r t y or married and over f o r t y - f i v e years of age, and were u s u a l l y craftsmen, o f f i c i a l s , c l e r k s , c i v i l s e r vants and the l i k e . On the others: hand, i n c l u s i v e tour scheduled pas-sengers tended to have average or above average income, were married and g e n e r a l l y between the ages of t h i r t y and s i x t y - f i v e , and were u s u a l l y business and p r o f e s s i o n a l people, i n c l u d i n g high r a n k i n g government o f f i c i a l s . "'""'"International C i v i l A v i a t i o n O r g a n i z a t i o n , I n c l u s i v e - 1  Tour S e r v i c e s i n I n t e r n a t i o n a l A i r T r a n s p o r t : A s e c r i t a r i a t  Study, (Montreal), Document 8244-AT/717, p. 12. A C i v i l Aeronautics Board research study revealed that i n c l u s i v e tour charter passengers v i s i t i n g Hawaii, when compared to. a l l v i s i t o r s to Hawaii were, on the average, o lder , more l i k e l y to be females, less a f f luent , and were taking t h e i r f i r s t t r i p to the Is lands. Appendix III on page 56 compares the c h a r a c t e r i s t i c s of charter and scheduled passengers on both f l i g h t s over the t r a n s - A t l a n t i c and to Hawaii . This study suggests that s ince the c h a r a c t e r i s t i c s of the i n c l u s i v e - tour. charter passenger .di f fer i n many-respects from those of the passenger using scheduled serv ices , i t i s an i n d i c a t i o n that the i n c l u s i v e tour charter passenger represents new business to the a i r l i n e s . This study concludes by claiming that newly generated a i r passengers tend to stay i n the market and continue to use a i r t ransportat ion for recurr ing t r i p s . In more s p e c i f i c terms Jack Dalby, Regional Sales Manager for A i r Canada, was quoted as s t a t i n g , "Once people s t a r t f l y i n g , they w i l l continue to t r a v e l that way. The more people that can be induced to f l y , 13 whether by charter or scheduled a i r l i n e s , the better for us . " There are two major deterrents to a i r t r a v e l : fear of 14 f ly ing-and the cost of a i r t r a v e l . I t has been s t a t i s t i c a l l y 12 C i v i l Aeronautics Board, Economic Impact.of Inc lu-s ive Tour Charters on Scheduled North A t l a n t i c Services , A Report Prepared by. the Bureau of Economics (Washington, D . C : C i v i l Aeronautics Board, January 1969), pp. "13-15. 13 J . . D a l b y , quoted i n "Group Travel Aids Major A i r -l i n e s , " The Sun, (Vancouver, Canada, January 30, 1970), p. 21. 14 Behavior Science Corporat ion, New Markets for A i r  T r a v e l , A Study Prepared for A i r Canada, (Van Nuys, C a l i f o r n i a ) , Summary Volume I, p . 16. shown t h a t " f e a r of f l y i n g drops to l e s s than one-fourth i t s normal i n t e n s i t y . i f the person has experienced only one to three round t r i p s by a i r . With i n c r e a s e d exposure to a i r t r a v e l , these f e a r s continue t o . d e c l i n e to r e l a t i v e l y unimportant l e v e l s . " "*"5 16 Saarty d i s c u s s e s the c o s t of a i r t r a v e l . . He makes the o b s e r v a t i o n t h a t there i s a str o n g p o s i t i v e r e l a t i o n s h i p between f a m i l y income l e v e l s and the ch o i c e of s e r v i c e i n non-business t r a v e l and-that the c h a r t e r i n d u s t r y s a t i s f i e s the needs of the r e l a t i v e l y more p r i c e e l a s t i c demand at the lower h a l f of the income curve. He s t a t e s t h a t as d i s c r e t i o n a r y i n -come r i s e s and the p r i c e of a i r t r a v e l , r e l a t i v e to t h a t of other goods and s e r v i c e s , decreases i n r e a l terms, a s h i f t i n consumer p r e f e r e n c e towards t r a v e l can be expected. As Hunter e x p l a i n s i t , "The m a j o r i t y o f passengers on c h a r t e r f l i g h t s are people of l i m i t e d means who simply would not t r a v e l i f they had to pay two or three times as much f o r a r e g u l a r scheduled 17 t i c k e t . " Saarty"*"^ and Williams"*"^ both c l a i m t h a t the t o t a l market scope f o r i n t e r n a t i o n a l a i r t r a v e l would widen' c o n s i d e r a b l y " ^ I b i d . , p. 17. 16 Sa a r t y , op. c i t . , p. 14. 17 . . G. Hunter, quoted in. " C h a r t e r : F l i g h t s Add Business,"• The F i n a n c i a l Post, (February 7, 1970), p. 7. 18 Saart y , op. c i t . , p; 15. 19 J.-E-.D. W i l l i a m s , , "Holiday T r a v e l By A i r , " i n s t i t u t e of Tra n s p o r t J o u r n a l , (May, 1968), p. 371. i f one c o u l d b r i n g the i n c l u s i v e c o s t of a f o r e i g n h o l i d a y down to no more than the c o s t o f a h o l i d a y a t home, or c l o s e to the average p e r s o n a l d i s p o s a b l e income per family-head f o r h i s / h e r v a c a t i o n p e r i o d * The above l i t e r a t u r e i s i n c o r p o r a t e d i n t o some of the hypotheses.found i n the f o l l o w i n g chapter. These hypotheses w i l l be analyzed i n order t o determine the v a l i d i t y of t h i s l i t e r a t u r e . RESEARCH HYPOTHESES T h i s chapter p r e s e n t s , a number of hypotheses which must be i n v e s t i g a t e d i n order to a s c e r t a i n whether or not c h a r t e r c a r r i e r s d i v e r t p a s s e n g e r ' t r a f f i c away from scheduled c a r r i e r s on t r a n s - A t l a n t i c f l i g h t s . The f i r s t f i v e hypotheses d i s c u s s probable income," o c c u p a t i o n , age, m a r i t a l s t a t u s , and sex c h a r a c t e r i s t i c s , o f c h a r t e r and scheduled passengers. These hypotheses are i n v e s t i -gated i n order to determine whether or not c h a r t e r passengers are s i g n i f i c a n t l y d i f f e r e n t than scheduled passengers. I f they a r e - d i f f e r e n t , then i t can be s a i d t h a t c h a r t e r o p e r a t o r s serve a . d i f f e r e n t market segment of demand f o r i n t e r n a t i o n a l a i r t r a v e l . I f they are s i m i l a r , then i t can be assumed t h a t c h a r t e r opera-t o r s d i v e r t passenger t r a f f i c away from scheduled o p e r a t o r s . Table I on page 15 demonstrates the interdependence of these f i v e , v a r i a b l e s . However, 'to f a c i l i t a t e the a n a l y s i s , each v a r i a b l e w i l l be analyzed independently. The next two hypotheses are aimed a t determining the number of c h a r t e r passengers whose only, c o n s i d e r a t i o n was-to f l y c h a r t e r . One deals with the f e a r of f l y i n g and the other the c o s t of f l y i n g . Notwithstanding t h e i r demographic c h a r a c t e r i s t i c s , INTERDEPENDENCE OF INCOME, OCCUPATION, MARITAL STATUS, AND SEX VARIABLES M a r i t a l Income Occupation Age- Status Sex Income Occupation X Age X M a r i t a l Status X Sex X X X X X X X X - X X those, c h a r t e r passengers, who would only f l y to Europe on a c h a r t e r , cannot be c o n s i d e r e d to c o n s t i t u t e a d i v e r s i o n from scheduled c a r r i e r s . C h a r t e r operators c l a i m t h a t they c r e a t e a d d i t i o n a l b usiness f o r the a i r l i n e i n d u s t r y as a whole,. T h e - l a s t hypo-t h e s i s attempts to v e r i f y t h i s claim,. Hypothesis One: Income The m a j o r i t y of c h a r t e r passengers earn l e s s than $7,500 per year w h i l e the m a j o r i t y of scheduled passengers earn more than $10,000 per y e a r . Author's Note: Chi squared a n a l y s i s which i s d i s -cussed i n Chapter F i v e , was used to determine the interdependence of these v a r i a b l e s . Those v a l i a b l e s which are interdependent are designated with an "X". Cost has o f t e n been r e f e r r e d to as t h e , s i n g l e major d e t e r r e n t to a i r t r a v e l . As•the plane f a r e to an overseas d e s t i n a t i o n decreases, or as the c o s t of a v a c a t i o n abroad approaches t h a t of a v a c a t i o n a t home, the g r e a t e r the l i k e l i -hood t h a t those who p r e v i o u s l y have been unable to a f f o r d to f l y . a b r o a d may then be so i n c l i n e d . - G e n e r a l l y speaking, s i n c e c h a r t e r c a r r i e r s o f f e r lower f a r e s than scheduled c a r r i e r s , one would expect to f i n d p r o p o r t i o n a t e l y more passengers e a r n i n g l e s s than $7,500 per year on c h a r t e r f l i g h t s . The median annual income f o r c h a r t e r and - scheduled p a s s e n g e r s . i s $8,500. In completing the q u e s t i o n n a i r e s , sched-u l e d •passengers were asked to s t a t e t h e i r income w h i l e c h a r t e r passengers were asked to check (/),. t h e i r a p p r o p r i a t e income range. In order to compare the data o f these two.groups, the income range of $7,500 - $10,000 was deemed to be e q u i v a l e n t to the median income of $8,500 and was thus used f o r the purpose:?, of t h i s h y p o t h e s i s . Hypothesis Two:- Occupation The m a j o r i t y of c h a r t e r passengers tend to be e i t h e r unemployed or employed i n occu-p a t i o n s which permit extended v a c a t i o n s whereas the m a j o r i t y of scheduled passen-gers are employed i n occupations which do not permit extended v a c a t i o n s . For the .purposes of t h i s h y p o t h e s i s , t r a n s - A t l a n t i c passengers can be d i v i d e d i n t o two groups. One group (Group I) would comprise those who are unemployed or employed i n occupa-t i o n s which can be g e n e r a l l y c o n s i d e r e d not to r e s t r i c t t h e i r 21 a b i l i t y to enjoy extended v a c a t i o n s . Those who are c l a s s i f i e d as unemployed i n c l u d e housewives, s t u d e n t s , and those who are r e t i r e d . Occupations which are thought to permit extended vaca-t i o n s i n c l u d e t e a c h e r s , p r o f e s s o r s , and others who would be f r e e from business commitments f o r a number of c o n s e c u t i v e weeks (more than three) d u r i n g the y e a r . Since the d u r a t i o n of most c h a r t e r f l i g h t s is\Ythree to e i g h t weeks,.one would expect t h a t the m a j o r i t y of c h a r t e r passengers c o u l d be c l a s s i f i e d under t h i s group. The other group (Group II) would comprise those whose occupations are g e n e r a l l y c o n s i d e r e d to r e s t r i c t t h e i r a b i l i t y , to enjoy extended v a c a t i o n s . Craftsmen, p r o f e s s i o n a l s , those i n v o l v e d i n t e c h n i c a l and c l e r i c a l d u t i e s , and those who are self-employed could be p l a c e d i n t h i s group. As the m a j o r i t y of those who are c l a s s i f i e d under t h i s group are unable to enjoy extended v a c a t i o n s , they r e q u i r e a more f l e x i b l e schedule i n order to depart and r e t u r n on s p e c i f i c dates. Thus, i f they wish to f l y to Europe, they must do so on a scheduled a i r l i n e r . Author's Note: An extended v a c a t i o n i s c o n s i d e r e d to be a minimum of three weeks i n l e n g t h . As most c h a r t e r s are f o r a t h r e e . t o e i g h t week d u r a t i o n , the major b a r r i e r p r e v e n t i n g a person from f l y i n g c h a r t e r would be e l i m i n a t e d . Other b a r r i e r s i n c l u d e being a b l e to arrange the v a c a t i o n to c o i n c i d e with a c a r r i e r t i m e t a b l e and being a member of the c h a r t e r i n g o r g a n i -z a t i o n s i x months p r i o r to the departure date of -the c h a r t e r . Hypothesis Three: Age The m a j o r i t y of c h a r t e r passengers are younger than twenty-six o£ o l d e r than f i f t y - f i v e w h i le most scheduled passengers are between these ages. Those under twenty-six and over f i f t y - f i v e are more able to arrange t h e i r v a c a t i o n to meet the c h a r t e r t i m e t a b l e . The m a j o r i t y of those under twenty-six are e i t h e r students with. long summer v a c a t i o n s or people between jo b s . An a r t i c l e by Schein s t a t e s that,' "Almost every l a r g e company admits to l o s i n g w i t h i n f i v e years more than h a l f -of the new c o l l e g e graduates 22 who have been h i r e d . " T h i s s t a t i s t i c may.also be a p p l i e d to high s c h o o l graduates who, having - l e s s . e d u c a t i o n , have g r e a t e r job m o b i l i t y i n the sense t h a t they have i n f e r i o r but more jobs a v a i l a b l e to them., The p r o p o s i t i o n to be made here i s t h a t . those under twenty-six, being more mobile than those who are o l d e r , may be i n c l i n e d , when,between jobs, to t r a v e l . . The age of twenty-six was d e r i v e d by adding the " f i v e . y e a r s " r e f e r r e d to i n the above quote to the probable average age of high s c h o o l and u n i v e r s i t y graduates. Those over f i f t y - f i v e years of age have.minimum f a m i l y commitments, and are e i t h e r r e t i r e d or have been employed with the same -firm long enough to be p e r m i t t e d an extended v a c a t i o n . E.H. Schein, "The F i r s t Job Dilemma," Psychology Today, (March, 1968), p. 28. A telephone survey conducted by the Author r e v e a l e d t h a t a f t e r twenty years s e r v i c e the m a j o r i t y of people are.per-. 24 m i t t e d a three to five-week p a i d v a c a t i o n per year. There-f o r e , the age of f i f t y - f i v e was thought to be a t e s t a b l e upper age l i m i t , f o r the purpose of t h i s h y p o t h e s i s . On the other hand,- those between these ages are l e s s able to arrange t h e i r v a c a t i o n to meet the c h a r t e r t i m e t a b l e . G e n e r a l l y speaking, they are more t i e d • to the home because they e i t h e r have not worked f o r the same f i r m long enough to enjoy an,extended v a c a t i o n or have family.commitments. These people,, i f they wish to t r a v e l t o Europe, must f l y scheduled.. Hypothesis Four: M a r i t a l S tatus P r o p o r t i o n a t e l y more unmarried t r a v e l l e r s f l y c h a r t e r than scheduled. Since unmarried t r a v e l l e r s have fewer f a m i l y respon-s i b i l i t i e s , they would be more able than t h e i r c o u n t e r p a r t s to take an extended-vacation, other v a r i a b l e s being e q u a l . Author's Note: On November 6, 1970 the author spoke with the r e p r e s e n t a t i v e s of t h e • I n t e r n a t i o n a l Woodworkers A s s o c i a -t i o n , Canadian Union of P u b l i c Employees, C o n s t r u c t i o n Labour R e l a t i o n s A s s o c i a t i o n , . I n t e r n a t i o n a l Longshoremen's and Ware-housemen's Union, Royal -Trust Company and.The Toronto-Dominion Bank. ^ A u t h o r ' s Note: The author i s aware t h a t some employees of v a r i o u s o r g a n i z a t i o n s are i n a r e s p o n s i b l e p o s i t i o n such t h a t w h i l e they are p e r m i t t e d f o u r weeks p a i d v a c a t i o n per year, are asked to take no more than two weeks a t one time. However, the percentage of these employees i s r e l a t i v e l y i n s i g n i f i c a n t when compared to the t o t a l working p o p u l a t i o n . Hypothesis F i v e : -Sex P r o p o r t i o n a t e l y more female t r a v e l l e r s f l y c h a r t e r than scheduled. In a l l l i k e l i h o o d , female t r a v e l l e r s are more ab l e to f l y c h a r t e r than male t r a v e l l e r s . They a r e , e i t h e r (a) house-wives whose .husbands have allowed them to t r a v e l abroad f o r an extended v a c a t i o n o r (b) s e c r e t a r i e s and c l e r k s who, because of the nature of t h e i r work,' are more mobile than most men. They are more mobile because, as i n the case of the h i g h s c h o o l graduate p r e v i o u s l y mentioned, they have i n f e r i o r but more jobs, a v a i l a b l e . T h e r e f o r e , these s e c r e t a r i e s and clerk'sj. c o u l d be more i n c l i n e d to q u i t t h e i r p r e s e n t job to t r a v e l knowing t h a t upon t h e i r r e t u r n t h e y " c o u l d more e a s i l y f i n d a new job. Hypothesis S i x : Group T r a v e l C h a r t e r passengers a s s o c i a t e a g r e a t e r degree of f e a r w i t h a i r t r a v e l than do scheduled passengers. "Fear" i s reputed to be the second major d e t e r r e n t to 25 a i r t r a v e l . Laidman i m p l i e s t h a t f o r the person who has never flown, t r a v e l l i n g with f r i e n d s may l e s s e n h i s a n x i e t y with, regard to a i r t r a v e l . S ince a c h a r t e r f l i g h t i s , by d e f i n i t i o n , c h a r t e r e d by a c l u b o r o r g a n i z a t i o n , a person would have the o p p o r t u n i t y of t r a v e l l i n g w i t h f r i e n d s or acquaintances. There-f o r e , one can assume t h a t a person, whose f e a r has prevented him from f l y i n g , may be induced to f l y c h a r t e r , whereas f l y i n g scheduled would not be c o n s i d e r e d . 2 S; -See Laidman's f i r s t comment on page t>. Hypothesis Seven: , To Europe: Only by C h a r t e r The m a j o r i t y of c h a r t e r passengers would not f l y to Europe i f they c o u l d not f l y c h a r t e r C h a r t e r passengers, n o t w i t h s t a n d i n g the demographic-c h a r a c t e r i s t i c s mentioned p r e v i o u s l y , would not c o n s i d e r paying more than the c h a r t e r f a r e i n order t o f l y to Europe. I f t h i s i s the case, then c h a r t e r o p e r a t o r s would have l i t t l e d i v e r s i o n e f f e c t on scheduled o p e r a t o r s . Hypothesis E i g h t : New Business Charter c a r r i e r s c r e a t e new business f o r scheduled c a r r i e r s , both domestic and f o r e i g n . The purpose of t h i s hypothesis i s to i n v e s t i g a t e the p o s s i b i l i t y . t h a t , w h i l e a number of p o t e n t i a l t r a v e l l e r s are a f r a i d o f a i r t r a v e l and would not normally f l y , some may be induced to f l y c h a r t e r because of the s a v i n g i n a i r f a r e . These passengers, i f they enjoy-the a i r t r a v e l p o r t i o n of t h e i r t r i p , may be. more i n c l i n e d to f l y i n the f u t u r e i n s t e a d of u s i n g other c o m p e t i t i v e forms of t r a n s p o r t a t i o n . Two f a c t o r s l e a d to the f o r m u l a t i o n of t h i s h y p o t h e s i s . F i r s t , 60 per c e n t of the c h a r t e r passengers are t a k i n g t h e i r f i r s t f l i g h t and would not have 2 6 flown except f o r the reduced f a r e . Second, exposure to a i r 27 t r a v e l causes a d e c l i n e i n the f e a r . o f f l y i n g . I f these s t a t e -ments are t r u e , then c h a r t e r operators c o u l d be c r e d i t e d f o r "' 26 See Laidman's comment'on pages % 5 . See f i n d i n g s o f Behavior Science C o r p o r a t i o n on page 12 s t i m u l a t i n g more business f o r the a i r l i n e i n d u s t r y as a whole. A l s o , i t i s p o s s i b l e t h a t some of the c h a r t e r passen-gers who-would not t r a v e l to Europe, except by c h a r t e r , may use scheduled c a r r i e r s between some of the major European c i t i e s . I t f o l l o w s t h a t i f c h a r t e r f l i g h t s were not o f f e r e d , these passengers would not v a c a t i o n i n Europe and o b v i o u s l y c o u l d not a v a i l themselves of the s e r v i c e s of the European scheduled o p e r a t o r s . T h e r e f o r e , Canadian c h a r t e r c a r r i e r s c o u l d be c r e d i t e d f o r . c r e a t i n g , to an extent, a d d i t i o n a l t r a f f i c f o r the European scheduled o p e r a t o r s . Appendix IV and V on pages 57 and 62 r e s p e c t i v e l y o u t l i n e the q u e s t i o n s found i n the c h a r t e r and scheduled q u e s t i o n -n a i r e s from which data are obtained to i n v e s t i g a t e these hypo-theses. RESEARCH METHODOLOGY Although the c o n f l i c t between the c h a r t e r and sched-u l e d o p e r a t o r s i s not a new one, l i t t l e i n f o r m a t i o n has been p u b l i s h e d as to whether or not c h a r t e r operators d i v e r t pas-senger t r a f f i c away from scheduled o p e r a t o r s on i n t e r n a t i o n a l f l i g h t s . Many q u e r i e s were w r i t t e n to a i r l i n e companies and o r g a n i z a t i o n s . The t y p i c a l r e p l y was t h a t they have not con-ducted such s t u d i e s or t h a t they have but c o n s i d e r e d the r e s u l t s c o n f i d e n t i a l . T h e r e f o r e , primary r e s e a r c h had to be undertaken. Interviews were h e l d w i t h a i r l i n e . a n d t r a v e l agency o f f i c i a l s but a t b e s t c o u l d only o f f e r background i n f o r m a t i o n . Thus, i n order to o b t a i n a s u b s t a n t i a l amount of meaningful i n f o r m a t i o n , the author decided to approach the t r a n s - A t l a n t i c c h a r t e r and scheduled passengers. There were two b a s i c methods of e x t r a c t i n g i n f o r m a t i o n from-these passengers: the p e r s o n a l i n t e r v i e w and the q u e s t i o n -n a i r e . The a i r l i n e s were r e l u c t a n t to make t h e i r manifests 28 a v a i l a b l e and thus the respondents had to be c o n t a c t e d e i t h e r a t the a i r p o r t of a t the c h a r t e r p r e - f l i g h t meetings. Since 2 8 Author's Note: The a i r l i n e s wished to safeguard t h e i r g o o d w i l l by p r o t e c t i n g the p r i v a c y of t h e i r c l i e n t e l e . the amount of time f o r p e r s o n a l c o n t a c t a t the a i r p o r t and p r e -f l i g h t meetings was l i m i t e d , the q u e s t i o n n a i r e was the more ac c e p t a b l e method. D i f f e r e n t .procedures were used i n d i s t r i b u t i n g the q u e s t i o n n a i r e to c h a r t e r and scheduled passengers. The c h a r t e r respondent could be asked to complete the q u e s t i o n n a i r e a t . f o u r p o s s i b l e times: -(a) on board the plane/ (b) a t the c h a r t e r group's p r e - f l i g h t meeting which i s h e l d approximately two weeks p r i o r t o the departure date, (c) while w a i t i n g to board the plane or (d) when disembarking.from the plane upon r e t u r n to Vancouver. The l a t t e r two p o s s i b i l i t i e s were r e j e c t e d as the respondents would not have s u f f i c i e n t time to complete the q u e s t i o n n a i r e . They would be too engrossed with s a l u t a t i o n s which are an inte-f -g r a l p a r t of any f l i g h t . . N e v e r t h e l e s s , on one o c c a s i o n , q u e s t i o n n a i r e s were d i s t r i b u t e d to members of the B r i t i s h Colum-b i a Teachers' F e d e r a t i o n a t the baggage c h e c k - i n counter of the Vancouver I n t e r n a t i o n a l A i r p o r t . They were asked.to complete the q u e s t i o n n a i r e s b e f o r e boarding the p l a n e . As expected/ the response -was poor. Only f i f t e e n people (approximately twenty-f i v e percent) responded. At f i r s t , the author was unable to secure p e r m i s s i o n from, t h e . a i r l i n e companies to have the q u e s t i o n n a i r e s d i s t r i b u -t e d on board the p l a n e . The reason given was t h a t the h a n d l i n g of the q u e s t i o n n a i r e s by t h e i r p ersonnel may, impede customer s e r v i c e . A l s o , many group o r g a n i z e r s r e f u s e d p e r m i s s i o n to have the respondents complete the q u e s t i o n n a i r e a t c h a r t e r p r e - f l i g h t meetings. These o r g a n i z e r s claimed t h a t because o r g a n i z i n g c h a r t e r s was.a v e r y c o m p e t i t i v e b u s i n e s s , they would not a l l o w anything to j e o p a r d i z e t h e i r success. However, the o r g a n i z e r f o r the P a c i f i c . I n t e r n a t i o n a l Sea and S k i A s s o c i a t i o n allowed the author have the passen-gers , on two of h i s c h a r t e r s , complete the q u e s t i o n n a i r e s w h i l e on board the p l a n e . One c h a r t e r l e f t Vancouver on June 30, 197 0, for-London, England on P a c i f i c Western A i r l i n e s . Seventy-seven people (approximately.eighty percent) responded. The.other c h a r t e r l e f t Vancouver on J u l y 2, 1970 f o r F r a n k f u r t , Germany on T r a n s a v i a A i r l i n e s ( H o l l a n d ) . F o r t y - n i n e people ( a p p r o x i -mately f o r t y - f o u r percent) responded. A l s o , the o r g a n i z e r f o r the E n g l i s h Speaking Union and the Vancouver Supper Club granted p e r m i s s i o n t o d i s t r i b u t e the q u e s t i o n n a i r e s d u r i n g t h e i r concurrent p r e - f l i g h t meetings. However, p e r m i s s i o n was granted on, the understanding t h a t the number of q u e s t i o n s concerning the f e a r of f l y i n g would be reduced. The p r e - f l i g h t meeting was h e l d on August 18, 1970, at the H o l i d a y Inn (Vancouver). A l t o g e t h e r , forty-two people (approximately e i g h t y - f o u r percent) responded. As there are no p r e - f l i g h t meetings f o r scheduled pas-29 sengers paying the r e g u l a r i n d i v i d u a l f a r e , the scheduled 29 ~ Author's Note: A d i s t i n c t i o n i s made between sched-u l e d passengers paying the r e g u l a r or e x c u r s i o n f a r e and those-paying the group f a r e . Those paying the group f a r e were ignored respondents c o u l d o n l y complete the q u e s t i o n n a i r e s w h i l e on board the plane or a t the a i r p o r t t e r m i n a l . As p r e v i o u s l y . mentioned, the•. f i r s t a l t e r n a t i v e was not p e r m i s s i b l e . The author intended to d i s t r i b u t e the q u e s t i o n n a i r e s at the baggage check - i n counter a t the Vancouver I n t e r n a t i o n a l A i r p o r t . However, i t was suggested t h a t the q u e s t i o n n a i r e s be d i s t r i b u t e d t o the scheduled passengers as they entered t h e i r 30 departure lounge. The advantages of d i s t r i b u t i n g the ques-t i o n n a i r e s a t the departure lounge r a t h e r than a t the baggage eheck-in counter a r e : (a) l e s s time i s i n v o l v e d as t r a v e l l e r s a r r i v e at the baggage check - i n counter up to two and one h a l f hours p r i o r to the f l i g h t w h i l e they enter the departure lounge only one. hour p r i o r to the f l i g h t , (b) passengers are s t i l l i n v o l v e d i n l a s t - m i n u t e c o n v e r s a t i o n around the baggage c h e c k - i n area w h i l e a t the departure lounge they are separated from those saying f a r e w e l l and (c) there can.be up to f o u r baggage check-in counters i n use but only one departure gate. The q u e s t i o n n a i r e s were d i s t r i b u t e d to r e g u l a r paying passengers•on CPAir's Amsterdam f l i g h t s d u r i n g the p e r i o d June 15 to J u l y 6, 1970. The q u e s t i o n n a i r e s were not d i s t r i b u t e d to A i r Canada's t r a n s - A t l a n t i c passengers as A i r Canada was conducting i t s own survey d u r i n g the same p e r i o d data" were being c o l l e c t e d f o r t h i s paper. i n d i s t r i b u t i n g the q u e s t i o n n a i r e s as t h e i r c h a r a c t e r i s t i c s approached those of a c h a r t e r passenger. Where scheduled pas-sengers are mentioned, r e g u l a r or e x c u r s i o n paying passengers are r e f e r r e d t o . • ^ I n t e r v i e w w i t h G.V. Barlow, Customer S e r v i c e Manager, CPAir, June 15, 1970. The scheduled passengers were a b l e to complete the q u e s t i o n n a i r e s i n the departure lounge.as i t c o n s i s t e d of only two pages and the respondent had approximately f o r t y - f i v e minutes b e f o r e boarding the pla n e . On the other hand, c h a r t e r passen-gers would have been unable to complete the q u e s t i o n n a i r e as i t c o n s i s t e d o f - t h r e e pages and the respondent only had a p p r o x i -31 mately f i f t e e n minutes b e f o r e boarding the plane. The q u e s t i o n n a i r e s were d i s t r i b u t e d o n l y . t o c h a r t e r and scheduled passengers who a c t u a l l y p a i d f o r the plane f a r e ( s ) , t h a t i s , to the person who, i n a l l l i k e l i h o o d , made or a t l e a s t shared i n the d e c i s i o n to f l y e i t h e r c h a r t e r or scheduled. I f a f a m i l y group was t r a v e l l i n g , the s e n i o r member was asked t o complete the q u e s t i o n n a i r e . I f a person"-was t r a v e l l i n g alone, he was asked to complete the q u e s t i o n n a i r e . To i n s u r e t h a t the d e s i r e d respondents completed the q u e s t i o n n a i r e s , the author p e r s o n a l l y d i s t r i b u t e d them as the passengers entered the depar-t u r e lounge, the plane, and the p r e - f l i g h t meeting. The q u e s t i o n n a i r e s which were completed by the c h a r t e r passengers on board the plane were c o l l e c t e d by the stewardesses before the plane reached i t s d e s t i n a t i o n . The q u e s t i o n n a i r e s were then put on the f i r s t plane r e t u r n i n g to Vancouver. The 31 Author's Note: Scheduled passengers were asked to r e p o r t to the departure lounge one hour b e f o r e departure i n order to have t h e i r seats a s s i g n e d . However, c h a r t e r passengers have t h e i r seats p r e v i o u s l y a s s i g n e d and are asked to congregate a t -the departure gate only f i f t e e n minutes p r i o r to departure of the f l i g h t . c h a r t e r respondents answering the q u e s t i o n n a i r e s a t the pre-f l i g h t meeting and the scheduled respondents answering the q u e s t i o n n a i r e s i n the departure lounge r e t u r n e d them to the author immediately upon completion. T h i s study analyzes the responses of 182 c h a r t e r and 100 scheduled passengers on t r a n s - A t l a n t i c f l i g h t s . L i m i t a t i o n s pf the Methodology T h i s study i s not wholly r e p r e s e n t a t i v e pf the c h a r t e r p o p u l a t i o n because of the l a c k of an adequate amount of co-o p e r a t i o n on the p a r t of c h a r t e r o r g a n i z e r s and a i r l i n e companies. Appendix VI on page - 66 c a t e g o r i z e s a l l Canadian o r i g i n a t i n g c h a r t e r e r s f o r the p e r i o d May to J u l y 1969. Compared to the t o t a l number of Canadian o r i g i n a t i n g c h a r t e r e r s -during t h i s p e r i o d , the r e l i g i o u s and.ethnic, a t h l e t i c and r e c r e a t i o n , s o c i a l , and e d u c a t i o n a l groups i n v e s t i g a t e d represented twenty-three, s i x t e e n , e i g h t and f i v e p e r c e n t r e s p e c t i v e l y . T h e r e f o r e , i t can be estimated t h a t only f i f t y - t w o p e r c e n t of a l l Canadian o r i g i n a t i n g c h a r t e r e r s were sampled. A l s o , except f o r the a t h l e t i c group,.only a token sample s i z e was o b t a i n e d from these groups. ; However, t h i s paper i s intended only to be a p r e l i m i n a r y study l o o k i n g a t some of the v a r i a b l e s which may be important i n d etermining whether or not c h a r t e r and scheduled passengers have d i f f e r e n t c h a r a c t e r i s t i c s . . Thus, the r e s u l t s obtained from t h i s sample should prove s u f f i c i e n t f o r . t h i s paper to i n d i c a t e the probable d i v e r s i o n e f f e c t , i f any, the c h a r t e r c a r r i e r s have on scheduled o p e r a t i o n s . . RESEARCH FINDINGS This chapter w i l l i n t e r p r e t the data produced by the q u e s t i o n n a i r e s d i s t r i b u t e d to 1 8 2 c h a r t e r and 100 scheduled passengers on t r a n s - A t l a n t i c f l i g h t s . The f i n d i n g s w i l l be analyzed i n terms of the v a r i o u s hypotheses o u t l i n e d i n Chapter Three. In order to f a c i l i t a t e the q u e s t i o n n a i r e a n a l y s i s . a U n i v e r s i t y of B r i t i s h Columbia packaged computer program c a l l e d the " M u l t i v a r i a t e Contingency T a b u l a t i o n s " was used. " C o n s i d e r i n g one^rquestion ( v a r i a b l e ) a t a time ( u n i v a r i a t e case), i t w i l l count,the number of people (subjects) who gave each response to the questiom,(and output the u n i v a r i a t e frequency t a b l e and u n i v a r i a t e t o t a l percentage t a b l e so d e r i v e d . C o n s i d e r i n g two, quest i o n s a t a.time ( b i v a r i a t e case) the program w i l l c o n s t r u c t a b i v a r i a t e frequency t a b l e of each p a i r of responses... and upon request, t a b l e s of h o r i z o n t a l and/or v e r t i c a l and/or t o t a l 32 percentages." An important f e a t u r e of t h i s program, i n the b i v a r i a t e case, i s the computer's a b i l i t y to undertake.chi-square a n a l y s i s . 3 2 J . B j e r r i n g e t a l , " M u l t i v a r i a t e Contingency Tabu-l a t i o n s ," (The U n i v e r s i t y of B r i t i s h Columbia Computing Centre, mimeograph, May 1970), pp. 3 , 4 . The c h i - s q u a r e d s t a t i s t i c i s used to decide whether observed d i f f e r e n c e s among 1two or more sample percentages are s i g n i f i c a n t or whether they can b e . a t t r i b u t e d to chance (whether or not two v a r i a b l e s are independent). I f the c h i - s q u a r e p r o b a b i l i t y (CHIPROB) value i s l e s s than 0.05 the user r e j e c t s the n u l l h y pothesis t h a t the two v a r i a b l e s are independent and concludes t h a t they are s i g n i f i c a n t l y r e l a t e d . Hypothesis. One: Income S u r p r i s i n g l y , " c o s t " does not appear to be a major reason people have not p r e v i o u s l y t r a v e l l e d by a i r . Table II on page 31 i l l u s t r a t e s t h a t the m a j o r i t y of people have not flown before e i t h e r because they found i t unnecessary or because they l a c k e d the o p p o r t u n i t y . The c o s t of a i r t r a v e l ranked t h i r d . N e v e r t h e l e s s , c h a r t e r passengers tend to earn l e s s income than scheduled passengers. Table I I I on page 31 demon-, s t r a t e s t h a t 63 p e r c e n t of those t r a v e l l i n g c h a r t e r earned under $7,500 per year w h i l e 37 percent earned over. $10,000. . In con-t r a s t , ,38 percent of those t r a v e l l i n g scheduled earned under $7,500 per year while 62 percent earned over $10,000. Hypothesis Two.: Occupation . As s t a t e d i n the Research Hypothesis chapter, passen-gers who were c l a s s i f i e d under Group I were thought to be un-employed or employed i n occupations which permit extended REASONS FOR NOT PREVIOUSLY TRAVELLING BY AIR CHARTER AND SCHEDULED PASSENGERS (In Percent) Reason Passenger Agree Neutral Disagree Never found i t Charter 69 .23 7 .69 23 . 08 necessary Scheduled 50 .00 50 .00 -Cost was too high Charter 60 . 00 40. 00 Scheduled 42 .86 28 .57 28 . 57 Had no t r a v e l - Charter 11 .11 33 .33 55. 56 l i n g companion Scheduled 50 .00 50. 00 Never had the Charter 60 .00 10 .00 30. 00 opportunity Scheduled 62 .50 37 .50 -Was a f r a i d of Charter 27 .27 18 .18 54. 55 f l y i n g Scheduled 60 .00 20 .00 20. 00 Preferred other Charter 27 .27 36 .36 36. 36 modes of t r a v e l Scheduled 20 .00 40 .00 40. 00 TABLE III INCOME COMPARISON: CHARTER AND SCHEDULED PASSENGERS (In Percent) Under $7,500 Over $10,000 Charter Passenger 62.86 37.14 Scheduled Passenger 38.46 61.54 CHIPROB: 0.00201 - Charter passengers have a lower l e v e l of income than scheduled passengers-v a c a t i o n s . Those who were c l a s s i f i e d under Group I I were thought to be employed i n occupations which r e s t r i c t extended v a c a t i o n s . A c c o r d i n g l y , i t was hypothesized t h a t the m a j o r i t y of c h a r t e r passengers .could be c l a s s i f i e d under Group I-whereas the m a j o r i t y of scheduled passengers could be c l a s s i f i e d under Group I I . Table IV; on .this'page shows t h a t although the above hy p o t h e s i s i s supported, i t s CHIPROB r e l a t e s t h a t the occupations of c h a r t e r and scheduled passengers are not s i g n i f i c a n t l y , d i f -f e r e n t . TABLE IV OCCUPATION COMPARISON: CHARTER AND SCHEDULED PASSENGERS (In Percent) Group I Group I I . Charter. Passengers 58.78 41.18 Scheduled Passengers 46.66 53.34 CHIPROB: .0 523 8 - The occupations o f - c h a r t e r and scheduled passengers are not s i g n i f i c a n t l y • d i f f e r e n t . The author would l i k e to s p e c u l a t e as t o . t h e probable reasons which would account f o r the f a c t t h a t a s i g n i f i c a n t number .of passengers c l a s s i f i e d under Group I f l y scheduled and a s i g n i f i c a n t number of passengers c l a s s i f i e d under Group I I f l y c h a r t e r . Although the occupations (or l a c k of an occupa-ti o n ) c l a s s i f i e d under each group were c o n s i d e r e d homogeneous to the e x t e n t t h a t they e i t h e r permit or r e s t r i c t extended v a c a t i o n s , within-..any one s p e c i f i c c l a s s i f i c a t i o n a c e r t a i n degree of h e t e r o g e n e i t y may e x i s t . T h i s h e t e r o g e n e i t y c o u l d be a t t r i b u t e d to d i f f e r e n t demographic c h a r a c t e r i s t i c s o r . o t h e r s p e c i a l • c i r c u m s t a n c e s which may e x i s t between those of the same oc c u p a t i o n . For example, w h i l e some teachers or housewives may have pre-arranged t h e i r v a c a t i o n to c o i n c i d e with a c h a r t e r f l i g h t , o t h ers may- have, (a) p r e f e r r e d to pay f o r the luxury of a f l e x i b l e t i m e t a b l e and thus flew scheduled, (b) n e g l e c t e d to p l a n t h e i r , t r i p f a r enough i n advance ( s i x months) and t h e r e f o r e w e r e - i n e l i g i b l e to take a c h a r t e r , (c) been u n s u c c e s s f u l i n f i n d i n g a s u i t a b l e c h a r t e r or (d) not been aware of the workings of a c h a r t e r and thus d i d not c o n s i d e r one a t a l l . S i m i l a r l y , w h i l e : a number of p r o f e s s i o n a l s , craftsmen or c l e r k s are unable to enjoy extended v a c a t i o n s ; some p r o f e s s i o n a l s may' conduct t h e i r own business and thus be a b l e to choose t h e i r own time and l e n g t h f o r a v a c a t i o n ; some craftsmen may be h i r e d f o r a s p e c i f i c p r o j e c t a f t e r the completion of which t h e i r time i s t h e i r own; some c l e r k s may have been employed by the,same f i r m long enough to be p e r m i t t e d an extended v a c a t i o n ; and any of the above may have been granted a leave of absence. To summarize, i t i s i m p o s s i b l e to c o n c l u s i v e l y d i f f e r e n t i a t e between c h a r t e r and scheduled passengers based on o c c u p a t i o n per se. Other i n t e r -vening v a r i a b l e s must be c o n s i d e r e d . Hypothesis Three:. Age Table V below shows t h a t the m a j o r - d i f f e r e n c e between the ages of c h a r t e r and scheduled passengers i s t h a t there i s a s u b s t a n t i a l l y higher percentage of c h a r t e r passengers under the age of twenty-six and a s u b s t a n t i a l l y h i g h e r percentage of scheduled passengers between the ages of twenty-six and f i f t y -f i v e . The percentage of c h a r t e r and scheduled passengers over f i f t y - f i v e i s almost i d e n t i c a l . TABLE V AGE COMPARISON: CHARTER AND SCHEDULED PASSENGERS (In Percent) Under 26 27-54 Over 55 C h a r t e r passenger 41.00 43.80 15.20 Scheduled passenger 22.10 60.00 17.90 CHIPROB: 0.00753 - The ages of c h a r t e r and scheduled passengers are s i g n i f i c a n t l y d i f f e r e n t . The average ages of the c h a r t e r and scheduled passen-gers are 35.9 and 39.6 r e s p e c t i v e l y . The f i g u r e f o r the c h a r t e r passengers might not be e n t i r e l y . r e p r e s e n t a t i v e of the c h a r t e r p o p u l a t i o n as 125 of the 180 c h a r t e r passengers i n v e s t i g a t e d were members of an a t h l e t i c o r g a n i z a t i o n . I t would not be erroneous to assume t h a t such,an o r g a n i z a t i o n would be comprised to a l a r g e extent, of ' r e l a t i v e l y young members. Hypothesis Four: M a r i t a l Status Table VI on page 36 i l l u s t r a t e s t h a t although an equal percentage of c h a r t e r passengers are e i t h e r s i n g l e or married, p r o p o r t i o n a t e l y more-single t r a v e l l e r s f l y c h a r t e r w h i l e propor-t i o n a t e l y more married t r a v e l l e r s f l y scheduled; Again, the f i g u r e f o r the c h a r t e r passengers might not b e - r e p r e s e n t a t i v e o f . t h e c h a r t e r p o p u l a t i o n f o r the r e a s o n . s t a t e d p r e v i o u s l y . Assuming t h a t a l a r g e number of members of-an a t h l e t i c group f a l l . i n t o a younger age b r a c k e t , i n a l l l i k e l i h o o d , a g r e a t e r percentage of them would not be married., Hypothesis F i v e : Sex As hypothesized, Table VII on page 36 shows t h a t there i s p r o p o r t i o n a t e l y more female t r a v e l l e r s on c h a r t e r f l i g h t s . As the q u e s t i o n n a i r e s were onl y d i s t r i b u t e d to the s e n i o r member of each f a m i l y group, the t a b l e must be a d j u s t e d f o r the wives who accompanied 50 p e r c e n t of the 31 p e r c e n t male charter passengers•and those who accompanied 30 percent of the 61 percent male scheduled passengers. TABLE VI MARITAL STATUS COMPARISON: -CHARTER AND SCHEDULED PASSENGERS (In Percent) S ingle Married Charter passenger 5 0 . 4 5 4 9 . 4 5 Scheduled passenger 3 5 * 8 0 6 4 . 2 0 CHIPROB: 0 . 0 4 9 0 0 - The mar i ta l status of charter and scheduled passengers i s s i g n i f i c a n t l y d i f f e r e n t . TABLE VII SEX COMPARISON:- CHARTER AND"SCHEDULED PASSENGERS (In Percent) Male - Female Charter passenger 3 0 . 7 7 6 6 . 4 8 Scheduled passenger 6 1 . 0 0 3 9 . 0 0 CHIPROB: 0 . 0 0 0 0 1 - Proport ionately more female t r a v e l l e r s f l y charter than scheduled. Hypothesis S i x : Group T r a v e l Table I I on page 31 demonstrated t h a t f e a r of f l y i n g d i d not rank as one of the major reasons one has not p r e v i o u s l y flown. I t a l s o appears t h a t the s e c u r i t y of-group t r a v e l i s not a major c o n s i d e r a t i o n i n t a k i n g a c h a r t e r . R e f e r r i n g . t o Table II again, o n l y 11 per c e n t of those who have not p r e v i o u s l y flown d i d not because they had no t r a v e l l i n g companion. A l s o , w h i l e 95 per c e n t of the c h a r t e r passengers responded t h a t they w e r e . f l y i n g c h a r t e r due to c o s t , only 23 percent were f l y i n g c h a r t e r to t r a v e l w i t h a group. To make t h i s f i g u r e appear i n s i g n i f i c a n t , -of these 23 perce n t , 7 4 percent would s t i l l f l y to Europe i f they c o u l d not t r a v e l w i t h a group. N e v e r t h e l e s s , assume t h a t a l a r g e number of those who have not p r e v i o u s l y . f l o w n because of t h e i r f e a r of a i r t r a v e l , do f l y , c h a r t e r with the e x p e c t a t i o n t h a t group t r a v e l would reduce t h i s f e a r . Then, one would expect these passengers, when ranking v a r i o u s methods, of t r a n s p o r t a t i o n , a c c o r d i n g to s a f e t y , would p l a c e the plane f u r t h e r down the l i s t than would passengers on scheduled c a r r i e r s who have (never flown b e f o r e . A l s o , not-w i t h s t a n d i n g t h i s , one would expect a l l those who have never flown b e f o r e , whether they f l y c h a r t e r or scheduled, would rank the plane as being l e s s s a f e than would experienced or i n e x -p e r i e n c e d persons. Tables V I I I and IX on page 3 8 i n d i c a t e t h a t the r e s -pondents, whether c h a r t e r or scheduled passengers, whether RANKING OF MODES OF TRANSPORTATION: ACCORDING-TO SAFETY, CHARTER PASSENGERS (By Rank Order) Experienced Passenger -.more than 6 f l i g h t s i n l a s t 2 years Inexperienced Passenger - n i l to 6 f l i g h t s i n l a s t two years Passenger experiencing his f i r s t f l i g h t Car Bus Plane Tra in Ship 5th 4th 2nd 3rd 1st 5th • 4th 2nd 3rd 1st 5th 4th 3rd 2nd 1st TABLE IX RANKING OF MODES OF TRANSPORTATION: ACCORDING TO SAFETY, SCHEDULED PASSENGERS (By Rank Order) Experienced Passenger - more than 6 f l i g h t s i n l a s t two years Inexperienced Passenger - n i l to 6 f l i g h t s i n l a s t two years Passenger experiencing his f i r s t f l i g h t Car , Bus Plane 'Tra in Ship 5th 4th •: 2nd 3rd 1st 5th 4th 2nd 3rd 1st 5th . 4th 1st 2nd 3rd experienced or i n e x p e r i e n c e d f l y e r s of those t a k i n g t h e i r f i r s t f l i g h t , almost gave the i d e n t i c a l rank to the v a r i o u s modes. However, a marked d i f f e r e n c e was noted i n the ranking of the plane by c h a r t e r and scheduled passengers e x p e r i e n c i n g t h e i r f i r s t f l i g h t . T h i s might p o s s i b l y support the p r o p o s i t i o n t h a t those who have never flown b e f o r e due to f e a r of a i r t r a v e l , might p r e f e r to f l y with a group (charter) of which they are a member, with the e x p e c t a t i o n t h a t i t would l e s s e n t h e i r a n x i e t y w i t h r e g a r d - to a i r t r a v e l . Due to the time and methodology c o n s t r a i n t s under which t h i s study.was conducted, the measurement of the c h a r t e r and scheduled passengers' f e a r of a i r . t r a v e l was handled as w e l l as p o s s i b l e . However, the reader should be c a u t i o n e d as to the r e l i a b i l i t y of the f i n d i n g s found under the hypothesis concer-n i n g group t r a v e l . Not only might a number of the respondents be r e l u c t a n t to acknowledge t h e i r f e a r of a i r t r a v e l , but, i n many cases, i n order to r e i n f o r c e t h e i r d e c i s i o n to f l y , might b i a s l y respond t h a t they do not f e a r a i r t r a v e l . Hypothesis Seven: ..To.Europe: Only by C h a r t e r A number of f i n d i n g s produced by t h e . c h a r t e r and scheduled q u e s t i o n n a i r e s seem to i n d i c a t e t h a t c h a r t e r operators d i v e r t a s u b s t a n t i a l amount of passenger t r a f f i c away from scheduled o p e r a t o r s on t r a n s - A t l a n t i c f l i g h t s . F o r t y-seven percent of the c h a r t e r passengers s t a t e d t h a t they would s t i l l t r a v e l to Europe i f they had to pay the r e g u l a r f a r e and 74 percent would s t i l l t r a v e l to Europe i f . t h e y c o u l d not t r a v e l with t h e i r c l u b or o r g a n i z a t i o n . Twenty-two p e r c e n t would have flown, scheduled i f they c o u l d not have arranged t h e i r v a c a t i o n to c o i n c i d e with e i t h e r t h e - c h a r t e r t i m e t a b l e or departure and a r r i v a l d ates. F o r t y - f i v e p e r c e n t of t h e , c h a r t e r passengers have p r e v i o u s l y p a i d f o r an overseas f l i g h t on a scheduled a i r l i n e r . A l s o , a s Table X below i l l u s t r a t e s , a p p r o x i -mately 23 p e r c e n t of the c h a r t e r passengers i n d i r e c t l y expressed 33 a w i l l i n g n e s s to pay the scheduled f a r e . TABLE X CHARTER PASSENGERS 1 WILLINGNESS TO PAY THE SCHEDULED FARE (In Percent) How much more would you be w i l l i n g t o pay to make t h i s f l i g h t on a scheduled a i r l i n e r ? NIL $l-$50 $51-$99 Over$100 21.93 27.77 27.77 22.73 I t a l s o should be p o i n t e d out t h a t 9 p e r c e n t of the c h a r t e r passengers, be f o r e t a k i n g t h e i r f l i g h t , c o n s i d e r e d Author's Note: A i r Canada's cheapest Vancouver to London summer f a r e i s $471 r e t u r n (29-45 day e x c u r s i o n ) . As the average c h a r t e r f a r e d u r i n g the same p e r i o d i s about $320, those c h a r t e r passengers who express a w i l l i n g n e s s to pay.more than $100 to f l y to Europe, c o u l d c o n s t i t u t e a d i v e r s i o n from scheduled c a r r i e r s . f l y i n g to a c o n t i n e n t ' o t h e r than Europe and another 9 p e r c e n t c o n s i d e r e d f l y i n g to other p a r t s of Canada and/or the c o n t i n e n -t a l U n i t e d S t a t e s . I t could be i m p l i e d from t h i s t h a t i f these passengers were unable to f l y c h a r t e r to Europe, they might' have gone to one of these o t h e r . d e s t i n a t i o n s . Since mainly scheduled c a r r i e r s operate between other c o n t i n e n t s and s i n c e only scheduled c a r r i e r s operate i n s i d e Canada and the c o n t i n e n -t a l U n i t e d S t a t e s , t h i s 18 percent c o u l d c o n s t i t u t e an i n d i r e c t d i v e r s i o n of t r a f f i c from scheduled c a r r i e r s on other r o u t e s . T h i r t y - o n e percent of the scheduled passengers, respon-ded t h a t they f i r s t attempted to f l y c h a r t e r . As more cl u b s and o r g a n i z a t i o n s o f f e r more c h a r t e r f l i g h t s , the number of d i f f e r e n t c h a r t e r t i m e t a b l e s and departure a n d - a r r i v a l dates w i l l i n c r e a s e and with i t the o p p o r t u n i t y of s i m i l a r scheduled passengers , who are able to take.an extended v a c a t i o n , to a r r a n g e - t h e i r v a c a t i o n to meet a , c h a r t e r t i m e t a b l e . Hypothesis E i g h t : New.Business T h i r t e e n percent of the c h a r t e r passengers were t a k i n g t h e i r f i r s t - f l i g h t . Sixty - r-seven p e r c e n t of them s t a t e d t h a t , ' although they were somewhat a f r a i d of f l y i n g , they c o u l d not pass up t h i s o p p o r t u n i t y to f l y to Europe at a reduced f a r e . Of these 67 p e r c e n t , 57 percent ( f i v e p e r c e n t of the popula-tion) responded'that i f they enjoyed the plane t r i p they would f l y more o f t e n . Therefore> i t appears t h a t c h a r t e r c a r r i e r s may create some additional business for.the a i r l i n e industry as.a whole. Also i t should be pointed out that 10 percent of the scheduled passengers took t h e i r f i r s t f l i g h t on a charter c a r r i e r . I t would be of relevance to obtain s i m i l a r information from scheduled passengers on domestic routes. Twenty percent of the charter passengers, who would no go to Europe i f they could not travel charter, planned-to use scheduled a i r l i n e s i n Europe. These passengers represent 12 percent of the charter population.and constitute additional business for foreign scheduled operators on t h e i r domestic routes. Therefore, given the above, we can assume that foreign charter operators would also create additional .business for North American scheduled operators on domestic,routes. SUMMARY AND CONCLUSIONS Summary The c h a r t e r a i r l i n e market has p r o g r e s s i v e l y grown from an i n s i g n i f i c a n t segment i n i n t e r n a t i o n a l t r a f f i c to a r e l a t i v e l y s i g n i f i c a n t one i n l e s s than a decade. The scheduled o p e r a t o r s , concerned with the inroads the c h a r t e r o p e r a t o r s have made i n the i n t e r n a t i o n a l . m a r k e t , c l a i m t h a t .these c h a r t e r o p e r a t o r s d i v e r t a s u b s t a n t i a l amount of passenger t r a f f i c away from them to j e o p a r d i z e t h e i r c r o s s - s u b s i d y system. On the o t h e r hand, the c h a r t e r o p e r a t o r s not only s t a t e t h a t they cause no d i v e r s i o n because they serve a d i f f e r e n t market segment of demand f o r i n t e r n a t i o n a l a i r t r a v e l but t h a t they i n f a c t c r e a t e new business f o r the scheduled o p e r a t o r s . In,order to c l e a r up t h i s i s s u e , the purpose of t h i s paper was to i n v e s t i g a t e whether or not, on t r a n s - A t l a n t i c f l i g h t s , c h a r t e r o p e r a t o r s d i v e r t passenger t r a f f i c from scheduled o p e r a t o r s . C o n c l u s i o n s The f i n d i n g s i n d i c a t e t h a t of the,demographic v a r i a b l e s t e s t e d , c h a r t e r and scheduled passengers appear to have d i f f e r e n t c h a r a c t e r i s t i c s . G e n e r a l l y speaking, the m a j o r i t y of c h a r t e r passengers had an annual income of l e s s than $7,500, were unemployed or had an occupation which allowed them an extended vacat ion , tended to f a l l in to a young age bracket, were single,, and were female t r a v e l l e r s . On the other hand, the majority of scheduled passengers had an annual income of more than $10,000, had an. occupation which did not allow them an extended vacat ion , tended to f a l l in to the middle-age bracket , were married, and were male t r a v e l l e r s . However, while the income, age, mar i ta l s tatus , and sex var iables were found to be s t a t i s t i c a l l y s i g n i f i c a n t , the occupation var iab le was.not.. This , implies that occupation alone i s not a r e l i a b l e ind ica to r as to whether or not a person w i l l f l y char ter . To take th i s point one step fur ther , th i s i s per-haps an i n d i c a t i o n that no one var iab le can be used e f f e c t i v e l y to d i s t i n g u i s h between a charter and scheduled passenger. The author bel ieves that the primary factor which, d i s t inguishes a charter passengersfrom a scheduled passenger i s h i s a b i l i t y to enjoy an extended vacat ion . In order . to ascer ta in one's a b i l i t y to take an extended ho l iday , the occupation, age, mar i t a l s ta tus , . and sex var iables must be considered i n conjunc-t i o n with each other. However, even then the resu l t s are not conclus ive . I t must be remembered that scheduled passengers could cons i s t of those-who are .able to enjoy an extended vaca-t i o n but (a)., could not arrange t h e i r vacat ion to coincide with a charter timetable or (b) preferred - the convenience of a f l ex-i b l e timetable and were w i l l i n g to pay for that conyenience. The assumption that a large number of people who have not previous ly flown, would prefer to f l y charter (to be i n the company of friends) i n the hope that i t would lessen t h e i r anxiety towards a i r t r a v e l appears to be i n v a l i d for two reasons. F i r s t , only a small percent of charter passengers responded that they never-have flown before because of t h e i r fear of a i r t r a v e l . And second, a l l t r a n s - A t l a n t i c passengers, whether f l y i n g . c h a r t e r or scheduled, whether experiencedfeor not, almost i d e n t i c a l l y ranked the f ive modes of t ranspor ta t ion . Given that a person can, take an extended vacat ion , then cost i s by far the major considerat ion i n f l y i n g charter/ not group t r a v e l . The hypothesis that charter passengers would not go to Europe i f - t h e y could not f l y charter was not substantiated. A l -most one .half of the charter passengers sa id they would s t i l l ; t r a v e l to Europe i f they.had to pay the regular fare or t r a v e l without t h e i r group. Charter operators appear to create new business for scheduled operators both domestic and foreign but the evidence i s not conclus ive . However, the author bel ieves that the new business generated does not compensate the scheduled operators . for the d iver s ion of t r a f f i c on the t r a n s - A t l a n t i c routes . To conclude, general ly speaking, charter passengers have ce r t a in d i f f e r e n t demographic c h a r a c t e r i s t i c s .than sched-uled passengers but approximately 47 percent of the charter passengers would s t i l l t r a v e l to Europe, i n the near f u t u r e , i f they had t o pay the r e g u l a r scheduled f a r e . Thus, i t appears t h a t , on t r a n s - A t l a n t i c r o u t e s , c h a r t e r c a r r i e r s d i v e r t a s i g -n i f i c a n t amount of passenger t r a f f i c away from scheduled c a r -r i e r s . Concluding Comments, On page 3, reference-was made to the c r o s s - s u b s i d i -z a t i o n argument put f o r t h . b y the scheduled c a r r i e r s . The author b e l i e v e s t h a t scheduled c a r r i e r s are u n j u s t i f i e d i n denouncing c h a r t e r o p e r a t o r s on the b a s i s t h a t they j e o p a r d i z e t h e i r c r o s s -subsidy system. The reasons are t w o f o l d . F i r s t , a system of c r o s s - s u b s i d y c a n n o t - e x i s t i n the long run. Whenever excess p r o f i t s c h a r a c t e r i z e a p a r t i c u l a r market or i n d u s t r y , new p a r t i -c i p a n t s w i l l b e . a t t r a c t e d or l e s s expensive s u b s t i t u t e s sought. In time, the excess p r o f i t s w i l l be e l i m i n a t e d thereby j e o p a r d i -z i n g the c r o s s - s u b s i d y system. Such i s the case on the t r a n s -A t l a n t i c r o u t e s . C h a r t e r f l i g h t s are a l e s s expensive s u b s t i t u t e 34 f o r scheduled f l i g h t s . ;'I"n a desperate b a t t l e to keep the passenger loads up.on scheduled f l i g h t s the I n t e r n a t i o n a l A i r T r a n s p o r t A s s o c i a t i o n has i n r e c e n t years co u n t e r a c t e d w i t h a 35 d a z z l i n g v a r i e t y of s p e c i a l i n c e n t i v e f a r e s . These f a r e s have 34 Author's Note: Although there have been no new Canadian e n t r a n t s i n t o the i n t e r n a t i o n a l c h a r t e r market i n the p a s t few y e a r s , no r e s t r i c t i o n s on entry have been imposed by the Canadian government. 35 B. Baxter, "The C h a r t e r R e v o l u t i o n , " The F i n a n c i a l  Post, (November 28, 1970), p. 16. been s u c c e s s f u l i n t h a t they a t t r a c t e d more people than ever b e f o r e . However, wit h regard to the i n d u s t r y . a s a whole, "The y i e l d has s t e a d i l y gone down over the l a s t f o u r y e a r s , q u i t e d r a m a t i c a l l y , as a r e s u l t of these f a r e s . " ^ Second,'some routes which operate a t a l o s s cannot be c o n s i d e r e d u n p r o f i t a b l e per se. I f a person wished to f l y from V i c t o r i a to Toronto, f o r example, he would have to t r a n s f e r to a t r a n s c o n t i n e n t a l f l i g h t a t Vancouver. As A i r Canada serves t h e . V i c t o r i a to Vancouver route he would, i n a l l l i k e l i h o o d , f l y both segments of h i s t r i p v i a A i r Canada,. However, i f only r e g i o n a l c a r r i e r s served the V i c t o r i a to Vancouver r o u t e , he may p o s s i b l y choose to f l y CPAir from Vancouver to Toronto and not A i r Canada. In t h i s case, A i r Canada, i f they operated the V i c t o r i a to Vancouver route at a l o s s , c o u l d not c l a i m t h a t the route was wholly u n p r o f i t a b l e . The reason i s t h a t t h i s r oute feeds a c e r t a i n amount of - t r a f f i c onto A i r Canada's t r a n s -c o n t i n e n t a l f l i g h t s , some of which may have gone to CPAir. Thus, the o v e r a l l route should be examined i n order to determine p r o f i t a b i l i t y and not any one segment. A l s o , the scheduled operators are u n j u s t i f i e d i n . c l a i m i n g t h a t a r o u t e , which pre-s e n t l y operates a t a l o s s but which i s expected to operate at a p r o f i t i n the f u t u r e , i s u n p r o f i t a b l e per se. 3 6 Z..Clark, quoted i n , "The C h a r t e r R e v o l u t i o n , " The F i n a n c i a l Post, (November 28, 1970), p. 15. To summarize, i f there i s a demand f o r i n e x p e n s i v e i n t e r n a t i o n a l a i r t r a v e l , and the f i n d i n g s i n d i c a t e t h e r e i s , then c h a r t e r o p e r a t o r s should be allowed to p r o v i d e t h e i r ser-.° v i c e s . At the same time, i f the scheduled o p e r a t o r s d i s c o n t i n u e or allow r e g i o n a l c a r r i e r s to take oyer t h e i r l e s s p r o f i t a b l e r o u t e s , then the c r o s s - s u b s i d y problem would be of l e s s concern to them. At p r e s e n t , t h i s i s the case. A i r Canada i s embarking on a r e g i o n a l c a r r i e r p o l i c y which w i l l , with the consent of 37 the A i r T r a n s p o r t Committee, ' r e l i n q u i s h some of t h e i r l e s s p r o f i t a b l e routes t o r e g i o n a l c a r r i e r s which, with s m a l l e r c r a f t , c o u l d make the route more p r o f i t a b l e . The routes from V i c t o r i a to S e a t t l e and L e t h b r i d g e to C a l g a r y have r e c e n t l y been turned over to P a c i f i c Western A i r l i n e s and Time Airways r e s p e c t i v e l y . O b v iously scheduled operators should be and are e a s i l y able t o compete i n the c h a r t e r market. Appendix VII on page 67 shows t h a t A i r Canada's and CPAir's 19 6 9 shares of the c h a r t e r market have s u b s t a n t i a l l y i n c r e a s e d ' o v e r - t h e i r 1968 market shares. This i n c r e a s e was due to t h e i r more a c t i v e p a r t i c i p a t i o n i n the c h a r t e r market. The scheduled a i r l i n e s do not c o n s i d e r t h e i r c h a r t e r o p e r a t i o n s to be i n d i r e c t c o m p e t i t i o n with t h e i r sched-u l e d o p e r a t i o n s . They have r e c e n t l y . a c c e p t e d the f a c t t h a t c h a r t e r f l i g h t s are here.to stay and t h e r e f o r e have entered the c h a r t e r market to compete with other o p e r a t o r s , both c h a r t e r and scheduled who o f f e r c h a r t e r f l i g h t s . 37 Author's Note: The A i r T r a n s p o r t Committee, under the Canadian Department of T r a n s p o r t , c o n t r o l s a l l route l i c e n c i n g and f a r e schedules. However, i n the f u t u r e , the scheduled operators w i l l have to r e l y on the businessman to support t h e i r scheduled 3 8 t r a n s - A t l a n t i c f l i g h t s . As mentioned b e f o r e , as the a v a i l - -a b i l i t y of c h a r t e r f l i g h t s i n c r e a s e s , so w i l l the o p p o r t u n i t y of p r o s p e c t i v e scheduled passengers to f l y c h a r t e r . These passengers, who co u l d a f f o r d to f l y scheduled but who- can arrange t h e i r v a c a t i o n to f i t a c h a r t e r t i m e t a b l e , w i l l f l y c h a r t e r and use the s a v i n g i n plane f a r e to he l p pay f o r the other c o s t s of t h e i r h o l i d a y abroad. Suggestions f o r F u r t h e r Research T h i s paper has been a p r e l i m i n a r y study to i n v e s t i g a t e whether or not c h a r t e r o p e r a t o r s d i v e r t passenger t r a f f i c away from scheduled o p e r a t o r s on t r a n s - A t l a n t i c r o u t e s . As such, i t has o u t l i n e d a workable framework which can be used as a base from which f u t u r e s t u d i e s can proceed. For the person conducting a p r i v a t e study, t h i s paper- has recounted some of the problems of methodology which would have to b e . r e c o n c i l e d . For the p r i v a t e r e s e a r c h e r and t h e , r e s e a r c h e r who has the complete co-o p e r a t i o n of an a i r l i n e company, t h i s paper has suggested r e l e -vant areas to be i n v e s t i g a t e d and the p o s s i b l e design and content of q u e s t i o n n a i r e s which,can be d i s t r i b u t e d to c h a r t e r and scheduled passengers. The w r i t e r has r e f e r r e d to t h i s paper as a p r e l i m i n a r y study because the l a c k of adequate c o - o p e r a t i o n on the p a r t of 38 the a i r l i n e i n d u s t r y has l e d to the two major weaknesses of .this paper. F i r s t , as mentioned b e f o r e , o n l y f o u r of the t h i r t e e n major- c a t e g o r i e s of Canadian o r i g i n a t i n g c h a r t e r e r s were ab l e to be i n v e s t i g a t e d . Except f o r the a t h l e t i c category, only a token sample s i z e was obtained from the o t h e r three c a t e g o r i e s . A l s o , as approximately seventy p e r c e n t of the sample was d e r i v e d from an a t h l e t i c group, the r e s u l t s o b tained from the sample-p o p u l a t i o n might not b e . r e p r e s e n t a t i v e o f the e n t i r e c h a r t e r passenger p o p u l a t i o n . Second, a i r l i n e c o m p a n y . s t a t i s t i c s were not made a v a i l a b l e . Given* t h a t about f o r t y - s e v e n p e r c e n t of the c h a r t e r passengers were d i v e r t e d away from scheduled c a r -r i e r s , the w r i t e r was unable to determine p r e c i s e l y the impact t h i s d i v e r s i o n had on the o p e r a t i o n s of the scheduled c a r r i e r s . S i m i l a r l y , i t would have been r e l e v a n t to examine the v a r i a t i o n s i n the y i e l d s of the scheduled c a r r i e r s ' o p e r a t i o n s on t r a n s -A t l a n t i c f l i g h t s b e f o r e and a f t e r (a) c h a r t e r f l i g h t s gained prominence (b) scheduled o p e r a t o r s i n i t i a t e d promotional f a r e s to compete w i t h . c h a r t e r f a r e s and (c) scheduled o p e r a t o r s took an a c t i v e r o l e i n the c h a r t e r market. I t i s apparent from these two weaknesses of t h i s paper t h a t the environment, i n which a study o f t h i s type i s undertaken, should i n c l u d e the u n l i m i t e d c o - o p e r a t i o n of a t l e a s t one of the major scheduled a i r l i n e s . F uture s t u d i e s should endeavor to make a more compre-hensive . i n v e s t i g a t i o n i n t o two s p e c i f i c a reas. F i r s t , a more r e l i a b l e method of measuring f e a r of a i r t r a v e l should be c o n s i d e r e d . P e r s o n a l i n t e r v i e w s , i f they can be arranged, would be i d e a l . Second, scheduled passengers on t r a n s - A t l a n t i c f l i g h t s were asked i f they took t h e i r f i r s t f l i g h t on a c h a r t e r c a r r i e r . The same q u e s t i o n should be asked of scheduled pas-sengers on domestic r o u t e s . In both cases the respondents, who took t h e i r f i r s t f l i g h t on a c h a r t e r c a r r i e r , should a l s o be asked i f t h e i r experience with the c h a r t e r f l i g h t was i n s t r u - -mental i n i n d u c i n g them to f l y more o f t e n a n d , i f so, they should be asked to i n d i c a t e the number of subsequent t r i p s on a sched-u l e d a i r l i n e . In asking these q u e s t i o n s , a more ac c u r a t e i n d i c a t i o n of whether or not c h a r t e r c a r r i e r s c r e a t e new business f o r scheduled c a r r i e r s would be o b t a i n e d . A i r Canada. Annual Report, 1969. Baxter, C l i v e . "The Charter Revolution," ' The F i n a n c i a l Post,-(November 28, 1970) . . Behavior Science Corporat ion. New Markets for A i r T r a v e l , A Study.Prepared for A i r Canada, (Van Nuys, C a l i f o r n i a ) , Summary Volume I. B j e r r i n g , J . e t - a l . "Mul t ivar i a te Contingency Tabula t ions , " The Univers i ty of B r i t i s h Columbia Computing Centre, (Mimeographed)> May, 1970. Canadian Transport Commission., ATC Approved Charter Passenger  Flow—Total A t l a n t i c , 1969/1968. . Trans-At lant ic Charter F l i g h t s Approved by the,ATC Transport Committee, 1969; C i v i l Aeronautics Board. Economic Impact of Inclus ive Tour  Charters on Scheduled;North A t l a n t i c Services , A Report Prepared by the Bureau of Economics (Washington, B.C.: C i v i l Aeronautics Board), January 1969. C l a rk , Z. quoted i n "The Charter Revolut ion , " The F i n a n c i a l  Post , (November'28, 1970). Dalby, J . quoted i n "Group Travel Aids M a j o r . A i r l i n e s , " The Sun, (Vancouver,.Canada, January 30, .1970). Dominion Bureau of S t a t i s t i c s . Internat ional A i r Charter  S t a t i s t i c s , January-March 1970, V o l . 1, No. 1. Hunter, G. quoted i n "Charter F l i g h t s Add Business , "- The  F i n a n c i a l Post , , (February 7, 1970). Internat iona l C i v i l Av ia t ion Organizat ion. Inclus ive Tour Services i n Internat ional -Air Transport : A Secre tar ia t  Study, (Montreal), Document 8244-AT/717. J amie son ,D . quoted i n "The Charter Revo lu t ion , " The F i n a n c i a l  Post , (November 28, 1970). Laidman, R.Hi quoted i n "Charter^—Only Way to F l y , " The Sun, (Vancouver, Canada), March 29, 1969. Rozumiah, M. "Canada'.s Internat ional Charter Market ," (unpublished Bachelor ' s the s i s , Faculty of Commerce, Univer s i ty of B r i t i s h Columbia), 1970. Saarty, D . A . D . Future of the Internat ional A i r Charter Market, A Report to the F i f t h Annual Meeting of the Canadian Transportat ion Research Forum, (Toronto, Ontar io ) , May 5-7, 1969. Schein, E . A . "The F i r s t Job Dilemma," Psychology Today, (March, 1968). Wi l l i ams , J . E . D . "Holiday Travel by A i r , " In s t i tu te of  Transport Journa l , (May 1968). Other Sources A i r Canada. Personal interviews .with B. Mayhew, Market Ana lys t , Vancouver, Summer and F a l l , 1970. • . A l e t t e r from P. D. Watson, Market Analys t , Montreal , March 3, 197 0. CPAir . Personal interviews with T. Dyck, Customer Services , Vancouver, Summer and F a l l , 1970. _________ Personal interview with G.V. Barlow, Customer Service Manager, Vancouver, June 15, ,1970. Wardair. A l e t t e r from G.D. Cur ley , Executive to the Pres ident , Edmonton, February 12, 1970. A P P E N D I X DESTINATION OF CHARTERS ORIGINATING IN CANADA North P a c i f i c 2,196 Trans -At l an t i c 24,462 South P a c i f i c 16,337 L a t i n America 4,491 Caribbean 21,081 Source: Dominion Bureau of S t a t i s t i c s , • Internat iona l A i r  C h a r t e r . S t a t i s t i c s , January-March 1970, V o l . 1, No. pp.- 23-24 . DESTINATIONS OF AIR CANADA'S AND C P A i r ' s INTERNATIONAL SCHEDULED FLIGHTS (Number Per Week - Peak -Period) North Trans- South L a t i n P a c i f i c A t l a n t i c P a c i f i c America Caribbean A i r Canada - 8 8 - - 3 0 CPAir 4 16 10- 1? Source: Telephone interview with T. Dyck, Customer Services , CPAir (Vancouver) and B. Mayhew, Market Ana lys t , A i r Canada (Vancouver), December 17, 1970. CHARACTERISTICS-OF PASSENGERS IN SELECTED MARKETS Touring or v i s i t i n g resort Age 50 or more 10,000 annual income or less Male Trans-At lant ic Passengers Mainland-Hawaii Passengers 1963/1964 1966/67 -_ 1967  Scheduled Scheduled Inclus ive A l l V i s i t o r s Economy Charter Economy Charter Tour-Charter to Passengers Passengers Passengers Passengers Passengers i;~Lj Hawaii  24% 30% 43% 41% N/A 32% 66% 56% 38% 35% 3 5% 44% 55% 36% 42% 52% N/A 55% 56% 69% 75% 35% N/A 60% F i r s t trans-A t l a n t i c t r i p i n 5 years F i r s t t r i p to Hawaii 45% 62^  45% 50! 93% 71! Never.flown before N/A N/A N/A' N/A 32% N/A Source: C i v i l Aeronautics Board-, Economic Impact of Inclus ive Tour Charters on. Scheduled North-At lant ic Services , A Report Prepared by the Bureau of Economics (Washington, D . C . : C i v i l Aeronautics Board, January, 1969), p. APPENDIX,-IV QUESTIONNAIRE DISTRIBUTED TO CHARTER PASSENGERS QUESTION ANSWER lo. Is this your f i r s t f l ight on a commercial air l iner? Yes No 2, If you have flown before: How many flights (count a return tr ip as 2 flights) have you flown in the last 2 years (include both domestic and international flights)? Previous to this t r ip , have you ever personally paid for a f l ight on.a commercial airl iner? If "no", please proceed to question #4. Was your f i r s t f l ight , for which you paid for the fare yourself, on as Previous to this t r ip , have you ever personally paid for an overseas trip on a: Scheduled Ai r l iner . . Chartered Ai r l iner . . Number Yes No Scheduled Air l iner Chartered Air l iner Yes No Yes No If you have not flown before, please check (-/) how much you agree or disagree with the following statements, I have not flown before because: I never"found i t necessary to f l y . . . . The cost was too high . . I had no travelling companion I never had the opportunityI I was afraid of f ly ing. I preferred other methods . of travel . . . . . If I enjoy this plane t r ip , I w i l l travel by a ir more often Neither Strongly Slightly Agree Nor Slightly Strongly Agree Agree Disagree Disagree Disagree — ; — . — •• U. Using the numbers 1 through 5> please rank these methods of travel according to their : . safety (the"safest would be given a " l"e 0 . . and the least safe a "5"). Car Bus Air l iner Train 5. Please check (vO whether or not you agree or disagree w i t h the f o l l o w i n g statements. Agree (Yes) Neutral (Maybe) Disagree (No) I am taking t h i s charter f l i g h t because: (a) The fare was lower than a scheduled f a r e (b) I wanted to t r a v e l with t h i s club. Pleasure i s the main purpose of t h i s t r i p i Chartered a i r l i n e r s are safer than scheduled a i r l i n e r s . . . . . . . . I would s t i l l take t h i s - t r i p to Europe, e i t h e r now or i n the near f u t u r e , i f : (a) I had to pay the regular f a r e (b) I could not t r a v e l with t h i s club. • — -Although I am somewhat a f r a i d of f l y i n g , I could not pass up t h i s opportunity to f l y to Europe at such a low cost . I f I could not have f i t t e d my vacation to meet the charter timetable (length of time between the departure from and return to Vancouver) I would have flown on a scheduled a i r l i n e r at the regular fare . . . . . . I f I could not have f i t t e d my vacation to meet the departure and a r r i v a l dates I would have flown on a scheduled a i r l i n e r at the regular I would rather pay a lower fare and have a f i x e d timetable than pay a higher fare and have a f l e x i b l e timetable . . . # 6. In Europe, w i l l you use scheduled a i r l i n e r s between any of the c i t i e s ? Yes - Number of times No^ 7. I f your organization d i d not o f f e r charter f l i g h t s , would you s t i l l take t h i s t r i p to Europe paying the regular fare> e i t h e r now or i n the. near future? Yes No 8. For how many people on this f l i g h t are you paying the plane fare (include yourself)? Number 9. How much i s the single plane fare f o r th i s return f l i g h t ? Amount $ How much more would you be w i l l i n g to pay to make this f l i g h t on a scheduled a i r l i n e r ? Amount $ 10. Please check {/) those alternatives which you considered before deciding to take this f l i g h t . - vacationing by car, bus, or t r a i n . . . - t r a v e l l i n g to Europe by ship . . . . - purchasing other goods, services and/or investments (savings). . . , . , - vacationing by plane to other parts of Canada or the continental United States . , . - f l y i n g to Europe on a scheduled a i r l i n e r - f l y i n g to a continent other than Europe . , - other . . 11. Age Male Single Occupation: Female Married Other 12. Please indicate your annual income from a l l sources. (If married, include husband and wife combined income.) under $4,999 $5,000 - $7,499 $7,500 - $?,999 $10,000 - $12,499 $12,500 - $14,999 ' $15,000 - $19,999 _ over $20,000 AGAIN, THANK YOU VERY MUCH FOR YOUR COOPERATION, HOPE YOU HAVE A MEMORABLE VACATION. APPENDIX V QUESTIONNAIRE DISTRIBUTED TO SCHEDULED-PASSENGERS QUESTION ANSWER 1» Is this your f i r s t flight on a commercial airliner? Yes No 2, If you have flown before: How many flights (count a return trip as 2 flights) have you flown in the last 2 years (include both domestic and international flights)? Previous to this trip, have you ever personally paid for a flight on. a commercial airliner? If "no", please proceed to question #4. Was your f i r s t flight, for which you paid for the fare yourself, on a: Previous to this t r i p , have you ever personally paid for an overseas trip on a: Scheduled Airliner. . Chartered Airliner. . Number Yes No Scheduled Airliner Chartered Airliner Yes No Yes No 3» If you have not flovm before* please check (vO how much you agree or disagree with the . following statements, I have not flovm before because; I never found i t necessary to f l y . . . . The cost was too high . . • I had no travelling companion I never had the opportunity, I was afraid of flying. , I preferred other methods of travel . . . . . If I enjoy this plane trip, I will travel by air more often Neither Strongly Slightly Agree Nor Slightly Strongly Agree Agree Disagree Disagree Disagree . — — _ 4. Using the numbers 1 through 5> please rank these methods of travel according to their " safety (the"safest would be given a "l"...'.and the least safe a "5"). Car Bus Airliner Train QUESTION ANSWER 5. Please check (•.) how much you agree or disagree with the -following statements. Pleasure i s the main purpose of this t r i p . . Scheduled a i r l i n e r s are safer than chartered a i r l i n e r s . Previous to taking t h i s f l i g h t , I t r i e d to f i t my vacation to coincide with a charter timetable (length of time between the departure from and return to Vancouver). I would rather pay a higher fare and have a f l e x i b l e timetable than pay a lower fare and have a fixed timetable. . . Neither Strongly S l i g h t l y Agree Nor S l i g h t l y Strongly Agree Agree Disagree i Disagree Disagree 6. For how many people on this f l i g h t are you paying the plane fare (include yourself)? Number 7. Please check (^ ) those alternatives which you considered before deciding to take this f l i g h t . . . '• - vacationing by bus, car, or t r a i n . . . . . . . - tra v e l l i n g to Europe by ship . . . . . . . . - purchasing other goods, services and/or investments (savings) - f l y i n g to a continent other than Europe. . . . . . - vacationing by plane to other parts of. Canada or the continental United States . . . -. - other 8. Age Male Single Female Married Other Occupation! Please indicate your annual income from a l l sources. (If married, include husband and wife combined income) $_ AGAIN, THANK YOU VERY MUCH FOR YOUR CO-OPERATION. * ' ' ' HOPE YOU HAVE A MEMORABLE VACATION. CANADIAN ORIGINATING CHARTERERS: SUMMER 1969 May June Ju ly Average C l a s s i f i c a t i o n Number .% Number o, , "O Number . % Number Q. "5 Miscellaneous 27 12.7 71 25. 5 81 22.9 179 20. 8 Company Employees 11 . 4.8 5 1.8 3 • .8 19 2.2 Soc i a l Club 29 12.8 21 7.6 25 7.1 75 8.2 Students 18 7.9 11 4.0 11 3.1 40 4.7 Profess ional 10 4.4 5 1.8 0 0 0 0 Rel ig ious-Ethnic 41 18.0 64 23.0 91 25.7 196 22.8 A t h l e t i c 39 17.1 38 13.7 ' 64 18.1 141 16. 4 Government Employees 8 3.5 9 3.2 5 1.4 22 2.6 Union 13 5.7 7 2.5 15 4 . 2 35 4.1 Teachers 3 1.3 17 6.1 21 5.9 41 4.8 Credi t Union 13 5.7 21 7.6 19 5.4 53 6.2 Auto Club 11 4.8 6 3.2 11 3.1 28 3.3 Hostel 3 1.3 3 1.1 7 3.0 13 1.5 228 278 353 858 * S p l i t charters counted as two charterers . Source: Canadian Transport Commission, Trans-At lant ic Charter F l i g h t s  Approved by the.ATC Transport Committee (Pro Rata and E n t i t y ) , May-July 1969. -TOTAL ATLANTIC CHARTER PASSENGER FLOW - 1969 AND 1968 1969 1968 Number of. % of Number of % of Passengers. Charter Passengers Charter • :. Market -• .Market Wardair 9 5,671 16.3 60,746 17.5 A i r Canada 71,270 12.1 26,770 7.7 Caledonian 67,560 11.5 , 27,000 7.8 CP A i r . 50,010 8.5 58 4 .2 P a c i f i c Western 33,807 • 5.'8 22,982 6.6 BOAC • 32,645 5.6 13,522 3.9 C a p i t o l 29>320 . 5.0 18,872 5.4 B r i t i s h United 26,252 4.5 5,449 1.6 A i r France 22,035 . 3:7 15,378 4.4 World Airways 21,510 3.7 17.756 5.1 KLM 20,177 3.4 13,545 3.9 Martin 1 s . 19/398 3.3 9,-67 8 • 2.-8 Overseas Nat ional - 17 ,870 3.0 7,920 2.3 American F lyers 11,033 1.9 375 . .1 Modern A i r Transport 10,008 1.7 Donaldson 8,125 1.4 A t i l a l i a 7,732 1.3 3,030 .9 Transavia Holland 6,640 1.1 Sabena ' . 6,133 1.0 9,778. 2.8 PAA 5,678 1.0 7,587 2.2 Trans. Internat ional 4,285 .7 250 .1 Lufthansa 2,024 .7 4,406 1.3 F i n n a i r . 2,590 .4 Aer Lingas 2,518 .4 3,776 1.1 Saturn 2,435 .4 3,483 1.0 Iber ia 2,304 .4 Kar A i r 1,344 .2 1,352 .4 Standard 1,280 .2 E l A l 1,230 .2 800 .2 A t l a n t i s 832 .1 TWA 672 .1 Swissair 429 .1 : :.2,569 .7 SAS 388 .1 382 . .1 Monarch 90 -A i r India 568 .2-Yugoslav 3,608 1.0 Adr ia 164 B r i t i s h Eagle 18,746 5.4 Icelandic 189 _ Lloyd Internat ional 8,875 2.5 Nordair 11,340 3.3 Sudflug 6 48 .2 Transglobe 25,988 7.5 Tota l 587,295- 100.0 348,116 100.0 Source: Canadian Transport Commission, ATC Approved Charter Passenger Flow - Tota l A t l a n t i c , 1969/1968. 

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