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UBC Theses and Dissertations

The impact of charter carriers on scheduled operations Feldstein, Sidney

Abstract

The charter market of the airline industry has progressively grown from an insignificant segment in international traffic to a relatively significant one during the last decade. What affect has the growth of the international charter market had on scheduled operations? The scheduled operators state that charters divert a substantial amount of passenger traffic away from them thereby jeopardizing their cross-subsidization system. On the other hand, charter operators claim that not only do they serve an entirely different market segment of demand for air travel thereby causing no diversion but that they in fact generate additional business for the airline industry as a whole. The purpose of this paper then, is to attempt to determine the impact, if any, that charter carriers may have on scheduled operations. A number of hypotheses were developed which, when investigated, would indicate whether or not charter flights divert passengers away from scheduled flights. Data to test these hypotheses were obtained from questionnaires distributed, during the summer of 1970, to trans-Atlantic passengers on charter and scheduled flights. The sample size consisted of 182 charter passengers and 100 scheduled passengers. The general conclusion was that charter and scheduled passengers have different demographic characteristics. This implies that charter carriers may serve a different market segment of demand for international air travel. However, when the charter passengers, notwithstanding their demographic characteristics, were asked if they would still take this trip to Europe, either now or in the near future, if they had to fly on a scheduled airliner and pay the regular fare, almost fifty percent responded in the affirmative. Therefore, it appears that, over the trans-Atlantic route, charter carriers divert a substantial amount of passenger traffic away from scheduled carriers.

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