ABSTRACT
There are multiple markets in which an airline can choose to operate, but the primary question in choosing the markets in which to operate is 'Can a reasonable financial return be expected from participation in that market, or does that participation enhance the overall financial performance of other activities within the airline?' The first decision is in which network environment the carrier will operate – domestic, international or a combination of both. Each of the networks can be divided into three broad markets – passenger, freight, and servicing, with each having a number of sub-segments. Most airlines operate primarily in the passenger market, deriving more than eighty-five per cent of revenue from passenger operations, with freight and servicing activities providing additional sources of revenue. The passenger market can be split broadly on the basis of purpose of travel – business or leisure.
