ABSTRACT
The discussion so far has concentrated to a great extent on the supply aspects of international air transport and in particular on the costs of providing air services. There is a tendency among airline managers to concentrate on supply considerations at the expense of demand factors. Within many airlines great emphasis is placed on operational safety and efficiency and on reducing the costs of production. A large range of performance indicators are produced to enable the airlines to monitor various aspects of supply: engine shut-down rates per 1,000 hours, punctuality, annual utilisation of aircraft and crews, maintenance man hours per aircraft and unit costs per tonne kilometre are just a few of the indicators used to monitor supply conditions. By contrast, performance indicators on the demand or revenue side are relatively few and often less importance is attached to them. Too many airlines, among them smaller international carriers, assume that if their supply of services is efficient and low-cost that is enough: profitability should follow.
