Five Things Learned Teaching Airline Economics To College Students – Forbes

by | Nov 22, 2022 | Financial

Airline Economics has proven to be a popular course for students George Mason University. Some even … [+] choose to work in the industry after taking the class. gettyI’ve been teaching a class called Airline Economics at George Mason University since 2017. The class is taught each semester, and has proven to be very popular with students because of its applied nature, no required textbook, and good feedback from the students who take it. The airline industry is always changing, so while the core content I teach has remained largely constant, I have kept things current with problem sets and businesses cases that relate to what is going on during the year. For example, shortly after the pandemic struck, the students were given a case about whether they should block middle seats on their fictitious airline.

While I teach the class, I have also learned from this experience. The class is an upper-level elective and is also cross-listed for graduate students. This means that the students want to be there, and that has created classes with good engagement and good questions. Here are five important lessons I have learned:

Language Is Important
Every business has its own, unique metrics and terms. Airlines have a lot of both, and spending time early in the semester reviewing these and their relationships has proven to be very helpful. Many readings on the industry presume knowledge of things like Revenue per ASM (RASM), Cost per ASM (CASM), Load Factor (percentage of seats filled), and more. Yield and RASM are often tricky to students, and equally to airline employees. This becomes important when learning Revenue Management basics, as this process tends to reduce yield while raising RASM.

Equally important are measures of operational and financial performance, like on-time, completion factor, aircraft utilization, margin, and various earnings metrics. Knowing these terms allows students to read analyst reports and public earnings reports with confidence and competence. It also makes it easier to learn about pricing, scheduling, alliances, and frequent flier programs when you can freely use these terms and metrics in a common …

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