Sample Essay on Air Transport Economics & Finance

Qn. 1 Short Term and Long Term Financial and Political Delays in an ATC System

Delays in the ATC system to control the air traffic result in increased financial income in the short run for the aviation industry. The increases in revenue are derived from the increased ticket charges and an upsurge in the number of customers within a given period. However, the long-run of the purposeful delays contributes to revenue losses in the long run due to boycotts by the customers and the negative comments from political platforms. The escalation in the political legislations also results in relegation and retrenchment of the traffic controllers.

Qn. 2 Solutions to Overcrowded Airspace

The crowding in the skies can be solved through proper flight planning and creation of an integrated coordination strategy of different aviation industries. Besides, the technological upgrades should be financed through the provision of excise duties, and capital from Airways Trust funds. Additionally, users should be charged for airspace usage given that it has the capacity of sky traffic reduction. However, the limitation of the charges is portrayed in the overcharging of travelers by the firms.

Qn. 3 Implications of Airport Privatization

The denationalization of the airports has resulted in appropriate customer services, creates room for competition, and result in the economy development. However, the privatization of the airports also results in the barrier to new entries due to the monopolistic nature promoted by the privatization concept. Moreover, privatization requires large capital in its implementation and greedy politician harbor the effective operations of both the government and investors through various legislations.

Qn. 4Effects of Airport Monopoly

The monopoly in the airport is solved through the application of airline deregulation policies to allow new entries into the market. Additionally, the merging of various small airlines is effective in countering the monopoly introduced by governments and other private companies.

Qn. 5 Barriers to Trade

A state introduces a trade blockade by introducing specific tariffs on a unit quantity of imports. Furthermore, a state uses license provision and import quotas to prevent new market entrances. The free trade imposed in business increases competition thus resulting in the provision of quality services.

Qn. 6 US Subsidies

The US airlines such as Delta Airlines have a legitimate case in lobbying the government to remove subsidies for the non-US companies since subsidizations are provided illegally through the EXIM bank. Equally, subsidies result in unfair competitions, and the non-US airline contributes less to the development of the domestic economy. The legality of the grievances is also observed primarily on the legalization of domestic travels for the non-US companies. The airlines should therefore provide competitive prices and a proper customer relationship strategy in competing with other airlines.