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What type of organization is an airline?

American Airlines, like most other airlines, operates with both a hierarchical and a functional organizational structure whereby management is organized from the top down, with certain specialized departments or divisions based on the different functions of the business.



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The typical organizational structure of an airline includes operations, maintenance, marketing, and finance divisions. The operations division manages the day-to-day activities of the airline, overseeing the pilots and flight attendants, the flight dispatchers, flight scheduling, and ground crews.

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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.

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Several factors can affect an airline's operating costs, including:
  • fuel prices.
  • competition.
  • economic conditions.
  • the regulatory environment.
  • technological advances.


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Aviation is the backbone of the tourism industry.

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The aerospace industry encompasses the manufacture of a wide range of aircraft and spacecraft products (including passenger and military aeroplanes, helicopters, and gliders, as well as spacecraft, launch vehicles, satellites, and other space-related items).

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