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ECO2100 Aviation Economics

Semester 2, 2019 Online
Short Description: Aviation Economics
Units : 1
Faculty or Section : Faculty of Business, Education, Law and Arts
School or Department : School of Commerce
Student contribution band : Band 3
ASCED code : 091901 - Economics
Grading basis : Graded


Examiner: Shane Zhang

Other requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at


Air travel has become an essential part of our personal and business life. Air transport is an important component of a modern economy that impacts economic development and the welfare of populations. The aviation industry plays a pivotal role in supporting international trade and economic integration and contributing to long-term economic growth. Individuals aiming to be a professional within the aviation industry or an industry closely linked to aviation need to possess the knowledge of basic economic theories and concepts to understand the current economic issues and challenges facing the global aviation industry, as well as the underlying forces that have shaped the airline industry in the last three decades. This course is also of relevance to undergraduate students who wish to have a better understanding of the behaviour of aviation markets and the key stakeholders including passengers, airlines, airports, governments and regulators.


This course uses air transport examples to illustrate basic concepts related to supply and demand, costs, competition and market structures. Key topics in the field of aviation economics are explored, including areas such as regulation and deregulation, open skies, airline alliances, airline pricing and revenue management, and the emergence of low cost carriers. Topics are explored from an economic perspective, with the aim to help students understand core economic concepts and principles, giving them the chance to develop the types of problem-solving, critical thinking, research and communication skills required for success in the aviation industry.


On successful completion of this course students should be able to:

  1. identify the drivers of the evolution of the aviation industry and the factors influencing the supply of and demand for aviation services
  2. describe the costs and operational infrastructures of the aviation industry
  3. apply basic economic frameworks to issues in aviation including the role of government, deregulation, pricing, competition and anti-trust
  4. compare the benefits and costs of open skies policy, airline mergers and alliances
  5. develop problem-solving and critical-thinking skills through analysing how airlines can survive and improve financial and economic performance under varying economic conditions
  6. effectively communicate the results of an economic analysis to an audience of stakeholders regarding a potential project or decision.


Description Weighting(%)
1. Introduction: the evolution of aviation industry and principles of economics 10.00
2. Supply and demand analysis in the airline industry 10.00
3. Costs and aviation infrastructures 10.00
4. Competition in airline markets 20.00
5. Airline pricing and revenue management 20.00
6. Open skies, airline mergers and alliances 15.00
7. Low cost carriers and their impacts. 15.00

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (

Please contact us for alternative purchase options from USQ Bookshop. (

Vasigh, B, Fleming, K & Tacker, T 2018, Introduction to air transport economics: from theory to applications, 3rd edn, Routledge, New York.

Reference materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.

Student workload expectations

Activity Hours
Directed Study 39.00
Independent Study 126.00

Assessment details

Description Marks out of Wtg (%) Due Date Notes
ASSIGNMENT 1 10 10 12 Aug 2019
ASSIGNMENT 2 50 50 07 Oct 2019
EXAMINATION 40 40 End S2 (see note 1)

  1. This is a restricted examination. The total working time for the examination is 2 hours. The examination date will be available via UConnect when the official examination timetable has been released.

Important assessment information

  1. Attendance requirements:
    Online: There are no attendance requirements for this course. However, it is the students' responsibility to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

    On-campus: It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    Students should refer to the Assessment Procedure (point 4.2.4)

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must obtain at least 50% of the total weighted marks available for the course (i.e. the Primary Hurdle), and have satisfied the Secondary Hurdle (Supervised), i.e. the end of semester examination by achieving at least 40% of the weighted marks available for that assessment item.

    Supplementary assessment may be offered where a student has undertaken all of the required summative assessment items and has passed the Primary Hurdle but failed to satisfy the Secondary Hurdle (Supervised), or has satisfied the Secondary Hurdle (Supervised) but failed to achieve a passing Final Grade by 5% or less of the total weighted Marks.

    To be awarded a passing grade for a supplementary assessment item (if applicable), a student must achieve at least 50% of the available marks for the supplementary assessment item as per the Assessment Procedure (point 4.4.2).

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    Restricted - This is a restricted examination. The only materials that candidates may use in the examination for this course are:
    1. an unmarked non-electronic translation dictionary (but not technical dictionary). A student whose first language is not English may take a translation dictionary into the examination room. A translation dictionary with any handwritten notes will not be permitted. Translation dictionaries will be subject to perusal and may be removed from the candidate's possession until appropriate disciplinary action is completed if found to contain material that could give the candidate an unfair advantage.
    2. a calculator which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination).

  7. Examination period when Deferred/Supplementary examinations will be held:
    Any Deferred or Supplementary examinations for this course will be held during the next examination period.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at