ABSTRACT
The airline industry has three key characteristics. First, the demand for air services, whether for passengers or freight, is a derived demand. Second, the product is very homogenous and, third, it cannot be stored. In newspaper and television advertisements airlines often try to interest the reader or viewer in a particular destination or a particular type of trip, and only as an afterthought, almost, do they suggest the airline that might be used. In the United States, for somewhat different reasons, the larger airlines also developed hub-based radial networks though they often operated from two or more major hubs and several smaller hubs. The low-cost airlines launched fares that were often 40–60 per cent lower than those of the traditional, so-called legacy or network airlines, and they simplified the fare structures and rules. A few large international airlines, such as Federal Express and UPS or Cargolux, are exclusively concerned with the carriage of freight.
