Five Things Learned Teaching Airline Economics To College Students

I’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, understood vernacular.

Students Can Be Brutally Honest

In some earlier classes, I would begin the class with a short quiz based on the reading assigned for the week. After bombing a few of these, one young woman looked at me and asked, ‘What’s the hack for the reading quizzes?” Somewhat surprised, I answered, “Try actually reading the assigned piece.” Most students have flown and George Mason has a large international population, so often my students are not only familiar with flying but also with long distance flying. Few complain about baggage fees but many complain about spotty wifi onboard.

It’s hard to be a student, and while I assign a lot of work with deadlines I also tend to be liberal about allowing late submissions. I often hear surprisingly honest answers about why an assignment wasn’t turned in on time, relating to family issues or challenges from other classes, or work. On some assignments, I ask for opinions on sometimes controversial topics and am often delighted that the students take strong stands and defend them aggressively.

Success In Airlines Is Highly Transferable

Since the Airline Economics class is highly applied economics, many of the ideas discussed in the class have good transferability to many other businesses. Consider ideas like managing revenues, controlling costs, finding ways to measure incremental profitability, and contracts within partnerships. Each of these is discussed in a specific airline context in the class, but also each have direct application in many businesses.

This is why the class, while taught within the school of economics, is also popular with students majoring in business, finance, and engineering. In real life, this is also true, as many airline managers have gone on to successful opportunities at other businesses. It’s less common to see movement the other way. The thin margins of airlines, the complex nature of the business, the government regulation, strong need for labor, and capital intensity all create disciplines that are valuable for many business situations. I’ve had multiple students go work in other businesses but say what they learned in the airline class helped them more than any other single class they took.

There Are No Shortcuts

Just like in the real world, there is no way to “check the box” to a good grade in the Airline Economics class. There is a lot of work to do, plenty to read, and getting behind is a very bad strategy. In the first class each semester, I tell students that the difference between A’s and D’s in the class is largely related to actually submitting all of the required work. While not part of the formal syllabus, there is probably no more important lesson taught in the class.

Another shortcut some try to take is not to read carefully. If the assignment says there are three clear deliverables, I’ve learned to expect that some students still submit just one or two. Or, if they don’t know an answer, they might just write down detail from a related topic that they understand. I recognize that many of my students also work, or are taking a full course load. So, I don’t expect them to take a lot of time between classes on their airline work. But the time they spend needs to be on the actual work assigned. Again, another good life lesson.

The Airline Industry Talent Future Is Bright

The students who take the Airline Economics class are smart, industrious, and willing to take a stand. Each semester, my faith in the future generally, and in airlines specifically, increases. That’s because these students are a tiny subset of a generation that often gets criticized for being too thin-skinned, or unwilling to work hard. My experience is the opposite of this, as most of the students show immense aptitude to understand complex ideas. They also are good communicators and willing to take a stand on issues and support it with facts, data, and analysis.

My idea to teach this class was rooted in my goal to give back a bit, and to share my work experience in an important industry. Yet, in doing this, I have learned at least as much as my students. As part of each semester’s final exam, I ask the students to give me an idea to make the class better for the next group. These ideas have been helpful and make each semester stronger. And every semester, I learn more and thank everyone who has taken the class for this, and thank George Mason for offering the class.