module specification

This module serves as a comprehensive exploration and elucidation of the fundamental principles that underpin both micro and macroeconomics, essential for grasping the intricacies of airport and airline operations. Within this framework, the module delves into the analysis of supply and demand, explores the principles governing costs, revenue, and pricing dynamics, and explains concepts related to the productivity and performance of airlines and airports. Additionally, the module will introduce the concept of market failure and look into the economic facets specific to the airline and airport industries, incorporating industry benchmarks crucial for evaluating their overall performance.
   

The module aims to provide students with the ability to:
1. Acquire systematic knowledge and a profound understanding of both microeconomic and macroeconomic principles, fostering the capability to adeptly apply these concepts within the unique context of the aviation sector.
2. Discern and differentiate between the diverse costs inherent to airlines and airports, with a keen awareness of how these costs intricately influence overall profitability.
3. Demonstrate proficiency in comprehending and manipulating data from diverse sources to critically evaluate performance within the aviation sector.

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An Overview of the Air Transport Industry

Challenges, threats and Opportunities
Financial condition of the industry
Economic factors affecting the industry
Global outlook for the industry

Key concepts in economics and their application to the Air Transport Industry

Principles of Economics
Supply and demand analysis, elasticity
Costs, revenues and profit maximisation
Theories of the firm: Perfect competition and monopoly
Introduction to imperfect competition
Market efficiency and market failure
Business Models of airline and airports 

Introduction to international trade.

Scope of economics as it relates to airlines
The role of the economic system within aviation
Market equilibriums
Pricing, load factors and yield management
Non – aeronautical revenues
Airport ownership and pricing
Aircraft leasing
International economics and aviation
Open skies
Competitive market structures
Airline and Airport Performance indicators
Shareholder and staff demands and how they can be managed

The formal delivery of teaching and learning for this module will comprise an average of three contact hours per week across 12 teaching weeks, supplemented by additional enrichment weeks throughout the semester. Each week will typically include a two-hour interactive session employing a range of teaching and learning strategies. These include workshops, lectures, guest speakers, case study discussions, panel debates, video analysis, as well as scenario-based activities and real-time simulations. Peer-to-peer learning is embedded within the module, as students collaborate to develop practical solutions and critically assess their impact.
Group work is a core component of the learning experience, encouraging active engagement as students share their knowledge and experience through discussion and collaboration. In addition, a one-hour seminar each week will adopt a more focused, discussion-led approach to explore current themes and emerging trends within the aviation industry. This will be further enriched through input from alumni, who will offer career insights, and guest lecturers who provide industry-specific context.
The module also makes extensive use of interactive learning spaces, supporting dialogue between students and staff, and facilitating access to a range of academic resources, including journal articles, professional websites, and external materials. Active participation in class discussions and debates is encouraged, recognising the diverse professional backgrounds and experiences that students bring to the programme.
Students are expected to prepare in advance for each session by reviewing the module schedule, which will be shared online and summarised by tutors at the end of each lecture. This preparation involves independent research and reading around the weekly themes to enable meaningful contributions to class discussions and Q&A activities.
Opportunities for reflective learning are embedded throughout the module. Students are encouraged to consider their approaches to tasks and discussions, and to reflect on informal feedback received during lectures and in relation to their submitted assessments.
 

On successful completion of this module students will be able to:
1. Demonstrate a comprehensive understanding and adept application of fundamental micro and macro-economic concepts, including but not limited to opportunity cost, elasticity, economic profit, and marginal analysis. They will showcase the ability to proficiently incorporate these concepts into coursework and examination problems, while also articulating a clear explanation of these principles from their foundational principles.
2. Develop a nuanced understanding of business models within the aviation industry, coupled with the ability to critically evaluate various types of competition. This will encompass a deep comprehension of the underlying principles governing pricing, costs, and load factors, demonstrating an awareness of their implications on industry dynamics.
3. Exhibit analytical and evaluative skills in addressing diverse economic challenges as they manifest within the transport industry. Students will showcase their ability to discern and assess responses to these challenges, recognizing the existence of both practical and theoretical approaches, thereby demonstrating a good grasp of the multifaceted nature of economic problem-solving in this specific domain.

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Core Texts
Bijan, V. (2018). Introduction to Air Transport Economics: From Theory to Applications. 3rd Edition
Wensveen, J.G (2018). Air Transportation. A management perspective. 8th Edition
Cowen, T and Tabarrok, A. (2018). Modern Principles of Economics. 4th Edition
Doganis, R. (2019). Flying Off Course: Airline Economics and Marketing. 5th Edition.
Holloway, S. (2008). Straight and Level. Practical airline economics. 3rd Edition.

Ancillary Reading
Belobaba, P. (2015). The Global Airline Industry. 2nd Edition.
Frank, R. (2009). The return of the Economic Naturalist: how economics makes sense of your world. 2ndEdition.
Graham, A. (2018). Managing Airports. 5th Edition
Pilarski, A. (2007). Why Can’t We Make Money in Aviation?. 3rd edition.