The overriding trend in transportation over the past century (see chapters 2 and 3) is the ascendancy of the car and the aeroplane at the expense of water- and rail-based transport. The technological and historical aspects of these trends have already been outlined in earlier chapters, and the sections that follow focus instead on contem- porary industry considerations.
air
As a commercial activity, air transportation is differentiated between scheduled air- lines (with standard and budget or low-cost variants), charter airlines and private jets.
The last category is by far the smallest and most individualised. The major difference between the first two is the flexibility of charter schedules and the ability of charters to accommodate specific requests from organisations or tour operators.
Airline alliances
A distinctive characteristic of the airline industry is the formation of alliances such as the Star Alliance, oneworld and SkyTeam. As of 2013, these alliances accounted for about three-quarters of all major airlines. Purportedly established on the premise that individual airlines can no longer provide the comprehensive array of services demanded by the contemporary traveller, these alliances offer:
• expanded route networks
• ease of transfer between airlines
• integrated services
• greater reciprocity in frequent flier programs and lounge privileges (Fyall & Garrod 2005).
However, more frequent code-sharing (i.e. two airlines sharing the same flight) also means fewer flight options, higher prices (because of reduced competition) and more crowded flights for consumers.
Deregulation
Deregulation (the removal or relaxation of regulations) is intended to introduce or increase competition within the air transportation sector. Associated with deregulation is the increased application of the so-called seventh, eighth and ninth freedoms of the air, which respectively allow a carrier based, for example, in Australia to carry passengers between two other countries and to carry passengers on domestic routes within another country (see figure 5.4). Illustrating the ninth freedom is Ryanair, a low-cost Irish airline that maintains an extensive network of routes within Italy.
Although not aimed at this level yet, the open skies aviation agreement signed in Feb- ruary 2008 between Australia and the USA effectively ended the trans-Pacific mon- opoly of United Airlines and Qantas by allowing the market rather than government to dictate the most efficient structure of the air transit network that connects the two countries.
First freedom
Flying over a country without landing
Australia NZ USA
Second freedom
Landing in a third country for technical reasons (e.g. refuelling)
Australia NZ USA
Third freedom
Dropping off passengers, cargo or mail (traffic)
Australia NZ USA
Fourth freedom
Picking up traffic
Australia NZ USA
Fifth freedom
Dropping off and picking up traffic in a third country
Australia NZ USA
Sixth freedom
Carrying traffic from one foreign country directly to another foreign country by way of the home country
Singapore Australia USA
Seventh freedom
Carrying traffic from one foreign country directly to another foreign country
Australia NZ USA
Eighth freedom
Ninth freedom
Carrying traffic on domestic routes within a foreign country before returning to home country
Australia USA (Honolulu) USA (Los Angeles)
Carrying traffic on domestic routes within a foreign country
Australia USA (Honolulu) USA (Los Angeles)
FIgURe 5.4 Freedoms of the air
Privatisation
Privatisation, or the transfer of publicly owned airlines to the private sector, is a trend closely related to deregulation. This can be undertaken (a) as a wholesale transform- ation, (b) as a partial measure achieved through the sale of a certain portion of shares, or (c) through the subcontracting of work. The main rationale for privatisation, as with open skies agreements, is the belief that the private sector is more efficient at pro- viding commercial services such as air passenger transportation. One potential concern in such developments is the increased likelihood that privatised airlines will eliminate unprofitable routes vital to regional or rural destinations. In contrast, national carriers are usually mandated in the broader ‘national interest’ to operate such marginal routes despite their unprofitable returns.
Low-cost carriers
The emergence of low-cost carriers (also known as ‘budget’ or ‘no-frills’ airlines) is another consequence of deregulation and one that has posed a substantial threat to the traditional full-service airlines as they account for a growing proportion of all passenger loads. Low fares, unsurprisingly, are the main reason why almost one-half of travellers cite a preference for low-cost carriers, which eliminate many traditional services (e.g. meals, free baggage allowances), tend to focus on short-haul routes, and rely heavily on internet bookings (Yeung, Tsang & Lee 2012). Some traditional air- lines have responded by forming their own low-cost subsidiaries. Scoot Airlines, for example, was established by Singapore Airlines in 2011 to compete in Asia with more established low-cost carriers such as AirAsia and Jetstar.
road
Only certain elements of the road-based transportation industry, including coaches, caravans and rental cars, are strongly affiliated with the tourism industry. Coaches remain a potent symbol of the package tour both in their capacity as tour facilitators and as transportation from airport to hotel. Caravans remain popular because of their dual accommodation and transportation functions. This mode of transport is highly appealing to grey nomads, or older adults who take extended recreational road trips during their retirement (Patterson, Pegg & Litster 2011). The car and the aeroplane in many contexts are seen as competing modes of transportation. However, the rental car industry (e.g. Hertz, National, Avis, Budget) has benefited from the expansion of air transportation, as many passengers appreciate the flexibility of having access to their own vehicle once they arrive at a destination.
railway
The rail industry as a whole now plays a marginal role in tourism, but there are two areas where this involvement is more substantial. The first concerns regions, such as Western Europe and East Asia, where concentrated and well-used rail networks facilitate mass tourism travel. Rail pass options that allow unlimited access over a given period of time are a popular product among free and independent travel- lers (FITs). Australia, among many such nationwide and state-specific options, offers the Austrail Pass, which provides unlimited economy travel within the entire net- work over consecutive days, and the Sunshine Rail Pass, which allows 14-, 21- or 30-day unlimited travel over the Queensland Rail network on either a first-class or economy basis. In future, trains could once again play a more important transit role as escalating fuel costs and environmental concerns curtail travel by air or road (Becken & Hay 2012).
The second perspective pertains to train tours as attractions. As with cruise ships, the trip itself is as much part of the ‘destination’ as the points of origin and terminus.
Train tours also attract the higher end of the market in terms of income. Well-known examples include the Orient Express between London and Istanbul and the Eastern Orient Express between Bangkok and Singapore. A notable Australian example is The Ghan, which connects Adelaide and Darwin (Winter 2007).
Water
The great ocean liners that once dominated the trans-Atlantic trade are now in a situation comparable to the great rail journeys — a high-end but residual niche product. Yet the resilience of this sector is indicated by the launching in 2004 of the
Queen Mary II, which is the first major liner to be launched on the trans-Atlantic route since the Queen Elizabeth II in 1969. The regional cruise market in areas such as the Caribbean and Mediterranean has been more robust, expanding continuously since the 1980s (Dowling 2006). Cruising has become increasingly popular in Australia as well, with P&O permanently basing ships in major ports, and lines from other countries basing vessels in Australia for three-to-four-month seasons. Important trends include the proliferation of ever larger mega cruise liners such as Royal Caribbean International’s Allure of the Seas and Oasis of the Seas, which each boast a capacity of more than 5000 passengers.