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Charter Airline

Charter airline

A charter airline is one that operates charter flights, that is flights that take place outside normal schedules, by a hiring arrangement with a particular customer. In the context of mass tourism, charter flights have acquired the more specific meaning of a flight whose sole function is to transport holidaymakers to tourist destinations. Such charter flights are contrasted with scheduled flights, but they do in fact operate to regular, published schedules. However tickets are not sold directly by the charter airline, but by holiday companies who have chartered the flight (sometimes in a consortium with other companies). Although charter airlines typically carry passengers who have booked individually or as small groups to beach resorts, historic towns, or cities where a cruise ship is awaiting them, sometimes an aircraft will be chartered by a single group such as members of a company, a sports team, or the military. Many charter flights are sold as part of a package holiday in which the price paid includes flights, accommodation and other services. At one time this was a legal requirement (or one enforced by the airlines' cartel), but this is no longer the case, and so-called "flight-only packages" can be bought by those who merely want to travel to the destination. Such packages are frequently cheaper than regular schedule airline fares. Furthermore charter airlines frequently operate on routes, or to airports, where there is no scheduled service. Much of the traffic through small and medium sized airports in the United Kingdom consists of charter flights, and the survival of these airports often depends on the airline landing fees they get from the charter companies. Many airlines operating regular scheduled services have set up charter divisions, though these have not always proved competitive with the specialist charter companies. In addition, some cargo airlines occasionally carry a few charter passengers on their jets. Conversely, some charter airlines have branched out into scheduled services when their charter operations have uncovered a need or a market niche. The economics of charter flights demand that the flights should operate on the basis of near 100% seat occupancy, and the standard of seating and service may be lower than on scheduled airlines (though this is by no means always the case). The airlines operating charter flights, and the holiday companies who are the initial purchasers of seats on them, have acquired an unhealthy reputation for financial instability. There have been a number of high-profile cases where holiday-makers have had their arrangements cancelled at short notice (and sometimes lost the substantial sums they have paid for package holidays), or have been left stranded at their destinations, by the collapse of airline or holiday company. A number of compulsory insurance and bond arrangements have been put in place to minimise at least the financial risk to the public from such events.

Charter operators

Some well known companies who specialise in chartered flights are:
- Regal Aviation
- Jet Aviation
- Air Royale
- Jet Direct
- Sentient Jet
- TXI Aviation
- Million Air
- Jet Concierge An online marketplace for companies offering chartered flights:
- [http://www.charterx.com CharterX] Among airlines who offer or have offered charter services are:
- ABX_Air
- Air Anatolia
- Air Atlanta Icelandic
- Air Japan
- Air Srpska
- Air Tindi
- Air Transat
- AOM French Airlines
- Arrow Air
- ATA
- Belavia
- Birgenair
- British Caledonian
- Britannia Airways
- Capitol Air
- Carnival Airlines (Owned by Carnival Cruise Lines)
- Cargolux
- Champion Air
- Citybird
- European Airlines
- First Choice Airways (formerly air2000)
- Frontier Flying Service
- Futura
- Germania
- Hapag-Lloyd
- Helios Airways
- Japan Airlines
- JMC
- Kenn Borek Air Ltd.
- Ladeco
- Lion Air
- Martinair
- Miami Air
- Monarch Airlines
- My Travel/Premiair
- Omni Air
- North American Airlines
- Palmair
- Skyservice
- Sterling European Airlines
- Sobelair
- Tango (a division of Air Canada)
- TransMeridian Airlines
- Travelcitydirect.com
- UPS Popular charter airline destinations include Palma De Mallorca, Tenerife, Alicante, San Juan, Puerto Rico, Honolulu and Miami, Punta Cana. Category:Airlines

Tourism

.]] , France ]] :"Tourist" redirects here; for the album by Athlete, see Tourist (album) Tourism is the act of travel for the purpose of recreation, and the provision of services for this act. A tourist is someone who travels at least eighty kilometres (fifty miles) from home for the purpose of recreation, as defined by the World Tourism Organization (a United Nations body). A more comprehensive definition would be that tourism is a service industry, comprising a number of tangible and intangible components. The tangible elements include transport systems - air, rail, road, water and now, space; hospitality services - accommodation, foods and beverages, tours, souvenirs; and related services such as banking, insurance and safety and security. The intangible elements include: rest and relaxation, culture, escape, adventure, new and different experiences. Many countries depend heavily upon travel expenditures by foreigners as a source of taxation and as a source of income for the enterprises that sell (export) services to these travellers. Consequently the development of tourism is often a strategy employed either by a Non-governmental organization (NGO) or a governmental agency to promote a particular region for the purpose of increasing commerce through exporting goods and services to non-locals. Sometimes Tourism and Travel are used interchangeably. In this context travel has a similar definition to tourism, but implies a more purposeful journey. The term tourism is sometimes used pejoratively, implying a shallow interest in the societies and places that the tourist visits.

Tourism Classification

Tourism may be classified into the following types:
- Inbound international tourism: Visits to a country by nonresident of that country
- Outbound international tourism: Visits by the residents of a country to another country
- Internal tourism: Visits by residents of a country to their own
- Domestic tourism: Inbound international tourism + internal tourism
- National tourism: Internal tourists + outbound international tourism

Required factors

The following are required, to make travel possible: # Discretionary income, i.e. money to spend on non-essentials # Time in which to do so. # Infrastructure in the form of accommodation facilities and means of transport. Individually, sufficient health is also a condition, and of course the inclination to travel. Furthermore, in some countries there are legal restrictions on travelling, especially abroad. Communist states restrict foreign travel only to "trustworthy" citizens. The United States prohibits its citizens from traveling to some countries, for example, Cuba.

History

Wealthy people have always travelled to distant parts of the world to see great buildings or other works of art; to learn new languages; or to taste new cuisine. As long ago as the time of the Roman Republic places such as Baiae were popular coastal resorts for the rich. The terms tourist and tourism were first used as official terms in 1937 by the League of Nations. Tourism was defined as people travelling abroad for periods of over 24 hours.

Health tourism & leisure travel

It was not until the 19th century that cultural tourism developed into leisure and health tourism. Some English travellers, after visiting the warm lands of the south of Europe, decided to stay there either for the cold season or for the rest of their lives. Others began to visit places with supposedly health-giving mineral waters, in hopes of relieving a whole variety of diseases from gout to liver disorders and bronchitis. Leisure travel was a British invention due to sociological factors. Britain was the first European country to industrialize, and the industrial society was the first society to offer time for leisure to a growing number of people. Initially, this did not apply to the working masses, but rather to the owners of the machinery of production, the economic oligarchy, the factory owners, and the traders. These comprised the new middle class. The British origin of this new industry is reflected in many place names. At Nice, one of the first and most well established holiday resorts on the French Riviera, the long esplanade along the seafront is known to this day as the Promenade des Anglais; in many other historic resorts in continental Europe, old well-established palace hotels have names like the Hotel Bristol, the Hotel Carlton or the Hotel Majestic - reflecting the dominance of English customers.

Winter tourism

Winter sports were largely invented by the British leisured classes initially at the Swiss village of Zermatt (Valais), and St Moritz in 1864. The first packaged winter sports holidays (vacations) followed in 1903, to Adelboden, also in Switzerland. Organized sport was well established in Britain before it reached other countries. The vocabulary of sport bears witness to this: rugby, football, and boxing all originated in Britain, and even Tennis, originally a French sport, was formalized and codified by the British, who hosted the first national championship in the nineteenth century, at Wimbledon. Winter sports were a natural answer for a leisured class looking for amusement during the coldest season.

Mass travel

Wimbledon, Italy.]] Mass travel could not really begin to develop until two things occurred.

- improvements in technology allowed the transport of large numbers of people in a short space of time to places of leisure interest, and
- greater numbers of people began to enjoy the benefits of leisure time. A major development was the invention of the railways, which brought many of Britain's seaside towns within easy distance of Britain's urban centres. The father of modern mass tourism was Thomas Cook who, on 5 July 1841, organized the first package tour in history, by chartering a train to take a group of temperance campaigners from Leicester to a rally in Loughborough, some twenty miles away. Cook immediately saw the potential for business development in the sector, and became the world's first tour operator. He was soon followed by others, with the result that the tourist industry developed rapidly in early Victorian Britain. Initially it was supported by the growing middle classes, who had time off from their work, and who could afford the luxury of travel and possibly even staying for periods of time in boarding houses. However, the Bank Holiday Act 1871 introduced a statutory right for workers to take holidays, even if they were not paid at the time. The combination of short holiday periods, travel facilities and distances meant that the first holiday resorts to develop in Britain were towns on the seaside, situated as close as possible to the growing industrial conurbations. For those in the industrial north, there were Blackpool in Lancashire, and Scarborough in Yorkshire. For those in the Midlands, there were Weston-super-Mare in Somerset and Skegness in Lincolnshire, for those in London there were Southend-on-Sea, Broadstairs, Brighton, Eastbourne and many others. In travelling to the coast, the population was following in the steps of Royalty. King George III is widely acknowledged as popularising the seaside holiday, due to his regular visits to Weymouth when in poor health. For a century, domestic tourism was the norm, with foreign travel being reserved for the rich or the culturally curious. A minority of resorts, such as Bath, Harrogate and Matlock, emerged inland. After World War II holiday villages such as Butlins and Pontins emerged, but their popularity waned with the rise of package tours and the increasing comforts to which visitors became accustomed at home. Towards the end of the 20th century the market was revived by the upmarket inland resorts of Dutch company Centre Parcs. Other phenomena that helped develop the travel industry were paid holidays:
- 1.5 million manual workers in Britain had paid holidays by 1925
- 11 million by 1939 (30% of the population in families with paid holidays)

Outside Britain

Similar processes occurred in other countries, though at a slower rate, given that nineteenth century Britain was far ahead of any other nation in the world in the process of industrialisation. In the USA, the first great seaside resort, in the European style, was Atlantic City, New Jersey. In Continental Europe, early resorts included Ostend (for the people of Brussels), and Boulogne-sur-Mer (Pas-de-Calais) and Deauville (Calvados) (for Parisians).

International mass tourism

Increasing speed on railways meant that the tourist industry could develop internationally. By 1901, the number of people crossing the English Channel from England to France or Belgium had passed 0.5 million per year. However it was with cheap air travel in combination with the package tour that international mass tourism developed after 1963. For the worker living in greater London, Brindisi today is almost as accessible as Brighton was 100 years ago.

Recent developments

There have been a few setbacks in tourism, the latest being related to the September 11, 2001 attacks and terrorist threats to tourist destinations such as Bali and European cities. Some of the tourist destinations, including the Costa del Sol, the Baleares and Cancun have lost popularity due to shifting tastes. In this context, the excessive building and environmental destruction often associated with traditional "sun and beach" tourism may contribute to a destination's saturation and subsequent decline. This appears to be the case with Spain's Costa Brava, a byword for this kind of tourism in the 1960s and 1970s. With only 11% of the Costa Brava now unblemished by low-quality development (Greenpeace Spain's figure), the destination now faces a crisis in its tourist industry. Attempts to move towards "quality tourism" are difficult given competition from cheaper, unspoilt holiday destinations on the one hand and the legacy of decades of over-exploitation on the other. Tenerife provides an example of the negative impact of mass tourism. Organizations like Greenpeace and [http://www.atan.org/en ATAN] are particularly critical of development on the island, arguing that Tenerife's current tourism industry is both economically and environmentally unsustainable. Receptive tourism is now growing at a very rapid rate in many developing countries, where it is often the most important economic activity in local GDP. In recent years, second holidays or vacations have become more popular as people's discretionary income increases. Typical combinations are a package to the typical mass tourist resort, with a winter skiing holiday or weekend break to a city or national park. On December 26 2004 a tsunami, caused by the 2004 Indian Ocean earthquake hit Asian countries bordering the Indian Ocean, and also the Maldives. Tens of thousands of lives were lost, and many tourists died. This, together with the vast clean-up operation in place, has stopped or severely hampered tourism to the area.

Special forms of tourism

For the past few decades other forms of tourism, also known as niche tourism, have been becoming more popular, particularly:
- Adventure tourism: tourism involving travel in rugged regions, or adventurous sports such as mountaineering and hiking (tramping).
- Agritourism: farm based tourism, helping to support the local agricultural economy.
- Armchair tourism and virtual tourism: not travelling physically, but exploring the world through internet, books, TV, etc.
- Bookstore Tourism is a grassroots effort to support independent bookstores by promoting them as a travel destination.
- Cultural tourism: includes urban tourism, visiting historical or interesting cities, such as London, Paris, Cracow, Rome, Prague, Beijing, Kyoto, Warsaw, and experiencing their cultural heritages. This type of tourism may also include specialized cultural experiences, such as art museum tourism where the tourist visits many art museums during the tour, or opera tourism where the tourist sees many operas or concerts during the tour.
- Dark tourism: is the travel to sites associated with death and suffering.
- Disaster tourism: travelling to a disaster scene not primarily for helping, but because it is interesting to see. It can be a problem if it hinders rescue, relief and repair work.
- Drug tourism: for use in that country, or, legally often extremely risky, for taking home.
- Ecotourism: sustainable tourism which has minimal impact on the environment, such as safaris (Kenya), Rainforests (Belize) and hiking (Lapland), or national parks.
- Educational tourism: may involve travelling to an education institution, a wooded retreat or some other destination in order to take personal-interest classes, such as cooking classes with a famous chef or crafts classes.
- Gambling tourism, e.g. to Atlantic City, Las Vegas, Macau or Monte Carlo for the purpose of gambling at the casinos there.
- Heritage tourism: visiting historical (Athens, Cracow) or industrial sites, such as old canals, railways, battlegrounds, etc.
- Health tourism: usually to escape from cities or relieve stress, perhaps for some 'fun in the sun', etc. Often to "health spas".
- Hobby tourism: tourism alone or with groups to participate in hobby interests, to meet others with similar interests, or to experience something pertinent to the hobby. Examples might be garden tours, ham radio DXpeditions, or square dance cruises.
- Inclusive tourism: tourism marketed to those with functional limits or disabilities. Referred to as "Tourism for All" in some regions. Destinations often employ Universal Design and Universal Destination Development principles.
- Medical tourism, e.g.:
- for what is illegal in one's own country, e.g. abortion, euthanasia; for instance, euthanasia for non-citizens is provided by Dignitas in Switzerland.
- for advanced care that is not available in one's own country
- in the case that there are long waiting lists in one's own country
- for use of free or cheap health care organisations
- Perpetual tourism: wealthy individuals always on vacation, some of them, for tax purposes, to avoid being resident in any country.
- Sport tourism: skiing, golf and scuba diving are popular ways to spend a vacation. Also in this category is vacationing at the winter home of the tourist's favorite baseball team, and seeing them play everyday.
- Space tourism
- Vacilando is a special kind of wanderer for whom the process of travelling is more important than the destination.

Trends

The World Tourism Organization forecasts that international tourism will continue growing at the average annual rate of 4 percent [http://www.world-tourism.org/market_research/facts/market_trends.htm]. By 2020 Europe will remain the most popular destination, but its share will drop from 60 percent in 1995 to 46 percent. Long-haul will grow slightly faster than intraregional travel and by 2020 its share will increase from 18 percent in 1995 to 24 percent. Since e-commerce has taken of on the internet, tourism products have become one of the most traded item on the net. Tourism products and services have been made available on the net at bargain prices through intermediaries like expedia.com or travelocity.com. In recent time, tourism providers (hotels, airlines, etc.)have started to sell their services through the internet. This has put pressure on intermediaries from both the virtual and the traditional brick and mortar stores. Space tourism is expected to "take off" in the first quarter of the 21st century, although compared with traditional destinations the number of tourists in orbit will remain low until technlogies such as space elevator make space travel cheap. Technological improvement is likely to make possible air-ship hotels, based either on solar-powered airplanes or large dirigibles. Underwater hotels, such as Hydropolis, expected to open in Dubai in 2006, will be built. On the ocean tourists will be welcomed by ever larger cruise ships and perhaps floating cities. Some futurists expect that movable hotel "pods" will be created that could be temporarily erected anywhere on the planet, where building a permanent resort would be unacceptable politically, economically or environmentally.

External links

- [http://www.holidaysforum.com/ Holidays Forum] (Tourism discussion).
- [http://www.altaionline.ru./ Tourism in Siberia] (Tourism in Siberia). Category:Service industries Category:Recreation Category:Entertainment ko:관광 ms:Pelancongan ja:旅行 simple:Tourism th:การท่องเที่ยว

Cartel

A cartel is a group of legally independent producers whose goal it is to fix prices, to limit supply and to limit competition. Cartels are prohibited by antitrust laws in most countries; however, they continue to exist nationally and internationally, formally and informally. Note that a single entity that holds a monopoly by this definition cannot be a cartel, though it may be guilty of abusing said monopoly in other ways. As such, it is inaccurate to describe (for example) Microsoft or AT&T as cartels. In general, cartels are economically unstable in that there is a great incentive for members to cheat and to sell more than the quotas set by the cartel (see also game theory). This has caused many cartels that attempt to set product prices to be unsuccessful in the long term. Empirical studies of 20th century cartels have determined that the mean duration of discovered cartels is from 5 to 8 years. However, once a cartel is broken, the incentives to form the cartel return and the cartel may be re-formed. Publicly-known cartels that do not follow this cycle include the De Beers diamond cartel, and by some accounts, the Organization of Petroleum Exporting Countries (OPEC). Price fixing is often practiced internationally. When the agreement to control price is sanctioned by a multilateral treaty or protected by national sovereignty, no antitrust actions may be initiated. Examples of such price fixing include oil whose price is controlled by OPEC. Also international airline tickets have prices fixed by agreement with the IATA, a practice for which there is a specific exception in antitrust law. International price fixing by private entities can be prosecuted under the antitrust laws of more than 100 countries. Examples of prosecuted international cartels are lysine, citric acid, graphite electrodes, and bulk vitamins. (source: http://agecon.lib.umn.edu/cgi-bin/pdf_view.pl?paperid=5488&ftype=.pdf) See also Phoebus cartel. De Beers has long controlled diamond production and prices from its stronghold in South Africa. Recently they have been implicated in sectarian violence in several African countries, including Sierra Leone and Cote d'Ivoire. As its name suggests, OPEC is organised by sovereign states. It cannot be held to antitrust enforcement in other jurisdictions by virtue of the doctrine of state immunity under public international law. However, members of the group do frequently break rank to increase production quotas. De Beers has faced strong criticism recently (see articles on blood diamonds), and may be expected to face competition from synthetic diamonds in the next few years. Many trade organizations, especially in industries dominated by only a few major companies, have been accused of being fronts for cartels: :People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. :Adam Smith, The Wealth of Nations, 1776 Exactly the same applies to trade unions, which usually act like cartels (being a group of producers) with similar benefits and drawbacks. An example of a new international cartel is the one created by the members of the Asian Racing Federation and documented in the Good Neighbour Policy signed on September 1, 2003.

External links

- [http://www.let.leidenuniv.nl/history/rtg/cartels/ International Cartel History Site] Category:Commercial crimes Category:Anti-competitive behaviour
- ja:カルテル

Airport

An airport is a facility where aircraft can take off and land. At the very minimum, an airport consists of one runway (or helipad), but other common components are hangars and terminal buildings. Apart from these, an airport may have a variety of facilities and infrastructure, including fixed base operator services, air traffic control, passenger facilities such as restaurants and lounges, and emergency services. A military airport is known as an airbase in North American terminology (other countries may use the term airfield or air station in current parlance). The terms airfield and airstrip may also be used to refer to a facility that has nothing more than a runway. The term aerodrome refers to any surface used for take off or landing. The term airport refers to an aerodrome that is licensed by the responsible government organization (ie FAA, Transport Canada). Airports have to be maintained to higher safety standards. There is usually no minimum standards for a basic aerodrome.

Attributes

Airports vary in size, with smaller or less-developed airports often having only a single runway shorter than 1,000 m (3,300 ft). Larger airports for international flights generally have paved runways 2,000 m (6,600 ft) or longer. Many small airports have dirt, grass, or gravel runways, rather than asphalt or concrete. In the United States, the minimum dimensions for dry, hard landing fields are defined by the FAR Landing And Takeoff Field Lengths. These include considerations for safety margins during landing and takeoff. Typically heavier aircraft require longer runways. The longest public-use runway in the world is at Ulyanovsk-Vostochny International Airport, in Ulyanovsk, Russia. It has a length of 16,404ft. As of 2005, there were approximately 50,000 airports around the world, including 19,815 in the United States alone.

Airport structures

Russia Airports are divided into landside and airside areas. Landside areas include parking lots, tank farms and access roads. Airside areas include all areas accessible to aircraft, including runways, taxiways and ramps. Access from landside areas to airside areas is tightly controlled at most airports. Passengers on commercial flights access airside areas through terminals, where they can purchase tickets, clear security, check or claim luggage and board aircraft. The waiting areas which provide passenger access to aircraft are typically called concourses, although this term is often used interchangeably with terminal. The area where aircraft park next to a terminal to load passengers and baggage is known as a ramp. Parking areas for aircraft away from terminals are generally called aprons. Both large and small airports can be towered or uncontrolled, depending on air traffic density and available funds. Due to their high capacity and busy airspace, most international airports have air traffic control located on site.

International airports

Customs facilities for international flights define an international airport, and often require a more conspicuous level of physical security. International airports generally have a complex of buildings where passengers can embark on airliners, and where cargo can be stored and loaded. The largest international airports are often located next to freeways or are served by their own freeways. Often, traffic is fed into two access roads, designed as loops, one sitting on top of the other. One level is for departing passengers and the other is for arrivals. Many airports also have light rail lines or other mass transit systems directly connected to the main terminals.

Shops and food services

mass transits.]] Most international airports have shops and food courts. These services usually provide the passengers food and drinks before they board their flight. Many recognizable chain food restaurants have opened branches in large airports to serve often hungry passengers. London's Heathrow Airport, for example, is home to both a Harrods and a Hamleys Toy Shop, providing Duty Free for international passangers. International areas usually have a duty-free shop where travellers are not required to pay the usual duty fees on items. Larger airlines often operate member-only lounges for premium passengers. Airports have a captive audience, and consequently the prices charged for food is generally higher than are available elsewhere in the region. However, some airports now regulate food costs to keep them comparable to so-called "street prices". captive audience

Cargo and freight services

In addition to people, airports are responsible for moving large volumes of cargo around the clock. Cargo airlines often have their own on-site and adjecent infrastructure to rapidly transfer parcels between ground and air modes of transportation.

Support services

Aircraft maintenance, pilot services, aircraft rental, and hangar rental are most often performed by a fixed base operator (FBO). At major airports, particularly those used as hubs, airlines may operate their own support facilities.

History and development

The earliest airplane landing sites were simply open, grassy fields. The plane could approach at any angle that provided a favorable wind direction. Early airfields were often built for the purpose of entertainment. These aerodromes consisted of a grassy field, with hangar for storage and servicing of airplanes, and observation stands for the visitors. Increased aircraft traffic during World War I led to the construction of regular landing fields. Airplanes had to approach these from certain directions. This led to the development of aids for directing the approach and landing slope. Following the war, some of these military airfields added commercial facilities for handling passenger traffic. One of the earliest such fields was Le Bourget, near Paris. The first international airport to open was the Croydon Airport, in South London [http://www.sutton.gov.uk/leisure/heritage/croydon+airport.htm]. In 1922, the first permanent airport and commercial terminal solely for commercial aviation was built at Königsberg, Germany. The airports of this era used a paved "apron", which permitted night flying as well as landing heavier airplanes. The first lighting used on an airport was during the later part of the 1920s; in the 1930s approach lighting came into use. These indicated the proper direction and angle of descent. The colors and flash intervals of these lights became standardized under the ICAO. In the 1940s, the slope-line approach system was introduced. This consisted of two rows of lights that formed a funnel indicating an aircraft's position on the glideslope. Additional lights indicated incorrect altitude and direction. Following World War II, airport design began to become more sophisticated. Passenger buildings were being grouped together in an island, with runways arranged in groups about the terminal. This arrangement permitted expansion of the facilities. But it also meant that passengers had to travel further to reach their plane.

Airport designation and naming

Airports are uniquely represented by their IATA airport code and ICAO airport code. IATA airport codes are often, but not always, abbreviated forms of the common name of the airport, such as PHL for Philadelphia International Airport. Exceptions to this rule often occur when an airport's name is changed. O'Hare International Airport in Chicago, Illinois retains the IATA code ORD, from its former name of Orchard Field. In many countries airports are often named after a prominent national celebrity, commonly a politician, e.g. John F. Kennedy International Airport, Indira Gandhi International Airport or Charles de Gaulle International Airport.

Airport security

Airports are required to have safety precautions in most countries. Rules vary in different countries, but there are common elements worldwide. Airport security normally requires baggage checks, metal screenings of individual persons, and rules against any object that could be used as a weapon. Since the September 11, 2001 attacks, airport security has been dramatically increased worldwide.

Airport operations

Outside the terminal, there is a large team of people who work in concert to ensure aircraft can land, take off, and move around quickly and safely. These processes are largely invisible to passengers, but they can be extraordinarily complex at large airports.

Air traffic control

Air traffic control (or ATC) is system whereby ground-based controllers direct aircraft movements, usually via radio. This coordinated oversight facilitates safety and speed in complex operations where traffic moves in all three dimensions. Air traffic control responsibilities at airports are usually divided into two main areas: ground and tower. radio.]] Ground Control is responsible for directing all ground traffic in designated "movement areas," except the traffic on runways. This includes planes, baggage trains, snowplows, grass cutters, fuel trucks, and a wide array of other vehicles. Ground Control will instruct these vehicles on which taxiways to use, which runway they will use (in the case of planes), where they will park, and when it is safe to cross runways. When a plane is ready to take off it will stop short of the runway, at which point it will be turned over to Tower Control. After a plane has landed, it will depart the runway and be returned to Ground Control. Tower Control controls aircraft on the runway and in the controlled airspace immediately surrounding the airport. Tower controllers use radar to identify and accurately locate an aircraft's position in three-dimensional space. They coordinate the sequencing of aircraft in the traffic pattern and direct aircraft on how to safely join and leave the circuit. Aircraft which are only passing through the airspace must also contact Tower Control in order to be sure that they remain clear of other traffic and do not disrupt operations.

Traffic pattern

radar Smaller airports and military airfields use a traffic pattern to assure smooth traffic flow between departing and arriving aircraft. Generally, this pattern is a circuit consisting of five "legs" that form a rectangle (two legs and the runway form one side, with the remaining legs each form another side). Each leg is named (see diagram), and ATC directs pilots on how to join and leave the circuit. Traffic patterns are flown at one specific altitude, usually 1000 ft AGL. Most traffic patterns are left-handed, meaning all turns are made to the left. Right-handed patterns do exist, usually because of obstacles such as a mountain or to reduce noise for local residents. The predetermined circuit helps pilots look for other aircraft, and helps reduce the chance of a mid-air collision. At extremely large airports, a circuit is not usually used. Rather, ATC schedules aircraft for landing while they are still hours away from the airport. Airplanes can then take the most direct approach to the runway and land without worrying about interference from other aircraft. While this system keeps the airspace free and is simpler for pilots, it requires detailed knowledge of how aircraft are planning to use the airport ahead of time and is therefore only possible with large commercial airliners on pre-scheduled flights. The system has recently become so advanced that controllers can predict whether an aircraft will be delayed on landing before it even takes off; that aircraft can then be delayed on the ground, rather than wasting expensive fuel waiting in the air.

Navigational aids

Before takeoff, pilots usually check an Automatic Terminal Information Service (ATIS) for information about airport conditions where they exist. The ATIS contains information about weather, which runway and traffic patterns are in use, and other information that pilots should be aware of. When flying, there are a number of aids available to pilots, though not all airports are equipped with them. A VASI helps pilots fly a perfect approach for landing once they have found the airport. Some airports are equipped with a VOR to help pilots find the direction to the airport, VORs are often accompanied by a DME to determine the distance to the airport. In poor weather, pilots will use an Instrument Landing System to find the runway and fly the correct approach, even if they cannot see the ground. Larger airports sometimes offer Precision Approach Radar (PAR). The aircraft's horizontal and vertical movement is tracked via radar, and the controller tells the pilot his position relative to the approach slope. Once the pilots can see the runway lights, they may continue with a visual landing.

Guidance signs

approach slope Airport guidance signs provide direction and information to taxiing aircraft and airport vehicles and assist in safe and expedient movement of aircraft. Smaller airports may have few or no signs, relying instead on airport diagrams and charts. There are two classes of signage at airports, with several types of each:

Operational guidance signs

- Location signs - yellow on black background. Identifies the runway or taxiway currently on or entering.
- Direction/Runway Exit signs - black on yellow. Identifies the intersecting taxiways the aircraft is approaching, with an arrow indicating the direction to turn.
- Other - Many airports use conventional traffic signs such as stop and yield signs throughout the airport.

Mandatory instruction signs

Madatory instruction signs are white on red. They show entrances to runways or critical areas. Vehicles and aircraft are required to stop at these signs until the control tower gives clearance to proceed.
- Runway signs - White on a red. These signs simply identify a runway intersection ahead.
- Frequency Change signs - Usually a stop sign and an instruction to change to another frequency. These signs are used at airports with different areas of ground control.
- Holding Position signs - A single solid yellow bar across a taxiway indicates a position where ground control may require a stop. If a two solid yellow bars and two dashed yellow bars are encountered, this indicates a holding position for a runway intersection ahead; runway holding lines must never be crossed without permission. At some airports, a line of red lights across a taxiway is used during low visibility operations to indicate holding positions.

Lighting

Many airports have lighting that help guide planes using the runways and taxiways at night or in rain or fog. On runways, green lights indicate the beginning of the runway for landing, while red lights indicate the end of the runway. Runway edge lighting is white lights spaced out on both sides of the runway, indicating the edge. Some airports have more complicated lighting on the runways including lights that run down the centerline of the runway and lights that help indicate the approach. Low-traffic airports may use Pilot Controlled Lighting to save electricity and staffing costs. Along taxiways, blue lights indicate the taxiway's edge, and some airports have embedded green lights that indicate the centerline.

Wind indicators

Planes take-off and land into the wind in order to achieve maximum performance. Wind speed and direction information is available through the ATIS or ATC, but pilots need instantaneous information during landing. For this purpose, a windsock is kept in view of the runway.

Safety management

Air safety is an important concern in the operation of an airport, and almost every airfield includes equipment and procedures for handling emergency situations. Commercial airfields include one or more emergency vehicles and their crew that are specially equipped for dealing with airfield accidents, crew and passenger extractions, and the hazards of highly flammable airplane fuel. The crews are also trained to deal with situations such as bomb threats, hijacking, and terrorist activities. Potential airfield hazards to aircraft include debris, nesting birds, and environmental conditions such as ice or snow. The fields must be kept clear of debris using cleaning equipment so that loose material doesn't become a projectile and enter an engine duct. Similar concerns apply to birds nesting near an airfield, and crews often need to discourage birds from taking up residence. In adverse weather conditions, ice and snow clearing equipment can be used to improve traction on the landing strip. For waiting aircraft, equipment is used to spray special deicing fluids on the wings. During the 1980s, a phenomenon known as microburst became a growing concern due to accidents caused by microburst wind shear. (For example, see Delta Air Lines Flight 191.) Microburst radar was developed as an aid to safety during landing, giving two to five minutes warning to aircraft in the vicinity of the field of an microburst event.

Environmental concerns

The traffic generated by airports both in the air and on the surface can be a major source of aviation noise and air pollution which may interrupt nearby residents' sleep or, in extreme cases, be harmful to their health . The construction of new airports, or addition of runways to existing airports, is often resisted by local residents because of the effect on the countryside, historical sites, local flora and fauna. As well, due to the risk of collision between birds and airplanes, large airports undertake population control programs where they frighten or shoot birds to ensure the safety of air travellers. The construction of airports has been known to change local weather patterns. For example, because they often flatten out large areas, they can be succeptible to fog in areas where fog rarely forms. In addition, because they generally replace trees and grass with pavement, they often change drainage patterns in agricultural areas, leading to more flooding, run-off and erosion in the surrounding land.

Military Airbase

An Airbase, sometimes referred to as a military airport or airfield, provides basing and support of military aircraft. Some airbases provide facilites similar to their civilian counterparts. For example, RAF Brize Norton in Oxfordshire, England has a terminal which caters to passengers for the Royal Air Force's scheduled Tristar flights to the Falkland Islands. A special military airfield is an Aircraft Carrier.

Aircraft Carriers

An aircraft carrier is a warship that functions as a floating airport for military aircraft. Aircraft carriers allow a naval force to project air power great distances without having to depend on local bases for land-based aircraft. After their development in World War II, aircraft carriers rapidly replaced the battleship as the centrepiece of a modern fleet. Unescorted carriers are considered vulnerable to missile or submarine attacks and therefore travel as part of a carrier battle group that includes a wide array of other ships with specific functions.

Airports in Entertainment

Airports have occasionally played major roles in motion pictures and television shows due to being transportation hubs, but also because of their unique characteristics. One such example of this is the movie The Terminal, a film about a man who becomes permanently grounded in an airport terminal and must survive only on the food and shelter provided by the airport. If nothing else, this movie demonstrates the sustaining properties of airport terminals. Movies such as Airplane!, Airport, Die Hard II, Jackie Brown, and Get Shorty also revolve around the unique culture of the major city airports.

Airport Directories

Each national aviation authority has its own system for pilots to be able to keep track of information about airports in their country.
- The United States uses the Airport/Facility Directory (A/FD), seven volumes that contain information such as elevation, airport lighting, runway information, communications, hours of operation, nearby NAVAIDs and much more.
- In Canada, a single publication, the Canada Flight Supplement (CFS) provides equivalent information.

External links

- [http://www.airnav.com/airports/ AirNav.com] - complete list of U.S. airports, with detailed airport information
- [http://www.pspda.com/efad.html eFAD] - the most powerful electronic airport directory (A/FD) on earth!
- [http://www.fly.faa.gov/flyfaa/usmap.jsp ATCSCC Real-time Airport Status page] - shows airport delay times for major U.S. airports
- [http://www.africaspotter.at.tt AFRICASPOTTER.at.tt] - Airports in Southern Africa
- [http://www.fortliberty.org/american-politics/airport-security.shtml U.S. airport security]
- [http://www.dft.gov.uk Department for Transport] (United Kingdom)
- [http://www.centennialofflight.gov/essay/Government_Role/landing_nav/POL14.htm History of Aircraft Landing Aids]
- [http://www.numlink.com Airport satellite images] Category:Aviation Category:Transport infrastructure Category:Buildings and structures ko:공항 ms:Lapangan terbang ja:空港 simple:Airport th:สนามบิน

Cargo airline

]] Cargo airlines are airlines dedicated to the transport of cargo. Some cargo airlines are divisions or subsidiaries of larger passenger airlines.

Aircraft used

Larger cargo airlines tend to use new or recently built aircraft to carry their freight, but many use older aircraft, like the Boeing 707, Douglas DC-8, Ilyushin 76. Examples of the 60-year-old Douglas DC-3 are still flying around the world carrying cargo (as well as passengers). Short range turboprop airliners such as the Fokker Friendship and British Aerospace ATP are now being modified to accept standard air freight pallets to extend their working lives. This normally involves the replacement of glazed windows with opaque panels, the strengthening of the cabin floor and insertion of a broad top-hinged door in one side of the fuselage. A number of cargo airlines carry a few passengers from time to time on their flights, and UPS once unsuccessfully tried a passenger charter airline division.

Noteable cargo airlines, in the history of air cargo

- ABX_Air
- Airborne Express
- Air Hong Kong
- American International Airways/Kalitta
- Atlas Air
- Burlington Air Express
- Cargolux
- Challenger Air Cargo
- DAS Air Cargo
- DHL Aviation
- Emerald Air
- Emery Worldwide
- FedEx
- Fine Air
- Flying Tiger Line
- Gemini Air Cargo
- Heavylift Cargo Airlines
- Kalitta Air
- KLM Cargo
- Lufthansa Cargo
- Martinair
- National Air Cargo
- Nippon Cargo Airlines (NCA, an associate of ANA)
- Polar Air Cargo
- Purolator
- Seaboard World Airlines
- Singapore Airlines Cargo
- TNT
- Tol Air
- UPS
- United States Postal Service
- Volga-Dnepr

World's largest freight carriers by scheduled freight tonne-kilometres flown

2004 total scheduled freight tonne-kilometres flown

#Federal Express 14.579 million #Korean Air 8.264 million #Lufthansa 8.040 million #United Parcel Service 7.353 million #Singapore Airlines 7.143 million #Cathay Pacific 5.876 million #China Airlines 5.642 million #Eva Airways 5.477 million #Air France 5.388 million #Japan Airlines 4.924 million

2004 international scheduled freight tonne-kilometres flown

#Korean Air 8.164 million #Lufthansa 8.028 million #Singapore Airlines 7.143 million #Cathay Pacific 5.876 million #China Airlines 5.642 million #Federal Express 5.595 million #Eva Airways 5.477 million #Air France 5.384 million #British Airways 4.771 million #Cargolux 4.670 million

2004 domestic scheduled freight tonne-kilometres flown

#Federal Express 8.984 million #United Parcel Service 4.260 million #Northwest Airlines 0.949 million #China Southern Airlines 0.860 million #American Airlines 0.576 million #Delta Air Lines 0.557 million #Air China 0.531 million #United Airlines 0.525 million #Cargojet Airways 0.517 million #China Eastern Airlines 0.458 million Source for 2004 data: International Air Transport Association. Note that it only includes data for member airlines. Category:Commercial item transport and distribution Category:Airlines

Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of potential financial loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a reasonable fee and duty of care.

Principles of insurance

The timing or occurrence of the loss must be uncertain. The rate of losses must be relatively predictable: In order to set premiums (prices) insurers must be able to estimate them. If the coverage is unique, the insured will pay a correlatingly higher premium. Lloyd's of London often accepts unique coverages. (e.g. the insuring of Tina Turner's legs) The losses must be predictable on a macro level: Insurers need to know how much it would be required to pay when the insured event occurs. Most types of insurance have maximum levels of payouts, but not all do, notably health insurance. The loss must be significant: The legal principle of De minimis dictates that trivial matters are not covered. Furthermore, rational insurance uses existing insurance when the transaction costs dictate that filing a claim is not rational. The loss must not be catastrophic: If the insurer is insolvent, it will be unable to pay the insured. Note that, in the United States, there exists a little-known system of Guaranty Funds to reimburse insured people whose insurance companies have become insolvent. [http://www.ncigf.org] This program is run by the National Association of Insurance Commissioners (NAIC). [http://www.naic.org/]

Indemnification

An entity seeking to transfer risk (an individual, corporation, or association of any type) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, defined as an insurance 'policy'. This legal contract sets out terms and conditions specifying the amount of coverage (compensation) to be rendered to the insured, by the insurer upon assumption of risk, in the event of a loss, and all the specific perils covered against (indemnified), for the term of the contract. When insured parties experience a loss, for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the amount of loss as specified by the policy contract. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many clients are used to fund accounts set aside for later payment of claims - in theory for a relatively few claimants - and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses, the remaining margin becomes their profit.

Example: home insurance

For example, let us assume a home is purchased for $100,000. Knowing the loss of the home from a peril would cause significant financial loss, insurance coverage is ordinarily acquired in the form of a homeowner's policy. The insurance company charges the insured a premium, of perhaps $1,000 a year in this example, for assuming liability for the risk. At this point, the risk of loss has been transferred from the insured to the insurance company. In the event of a covered peril, the insurer pays the claimant the amount of loss according to the terms of the contract, in ordinary circumstances, which may amount to the cost of replacing or repairing the home.

How an insurance company makes money

A customer might pay one or more premium payments over time. The company collects these payments from one or more customers. If something happens which triggers a claim, the company then pays out a certain amount of money. If, during the lifetime of all of the company's insurance contracts, it pays out less than it has taken in, it makes what is known as an underwriting profit. One measure of an insurance company's performance is their loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium). The loss ratio is added to the expense ratio (underwriting expenses divided net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates a profit, while anything over 100 is a loss. Two companies that are famous for achieving underwriter profit are American International Group and Berkshire Hathaway. In many cases a company's combined ratio is greater than 100 percent, however the company still manages to make money. This is because in between the time the company collects premiums and when it pays out claims, it can invest that money. The return from these investments can offset an underwriting loss resulting in profit. For example, if a company has to pay out 10 percent more than it took in, but made a 20 percent return on its investment, then it made a 10 percent profit. However, since most insurance companies consider it only prudent to invest in risk-free government bonds, or other lower risk and lower return forms of investments, it's important that the extra amount it has to pay out compared to what it has to take in is less than the percent return of these investments. If it isn't, the company loses money. The extra amount that a company has to pay out can be considered a "cost of funds" and be compared to an interest rate of the same company borrowing money. Because of this, most insurance companies don't have a goal just to have any amount of profit over the cost of funds, but rather to have this cost of funds to be lower than what they would have been able to get by borrowing somewhere else. If this isn't the case, the insurance company does not add any value to their owners, who theoretically could have borrowed money from somewhere else and made the same investments themselves.

Determination of rate structures

The insurer uses actuarial science to quantify the risk they are willing to assume. Data is generated to approximate future claims, ordinarily with reasonable accuracy. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used by insurers, in conjunction with additional factors, to determine rate structures. For example, many individuals purchase homeowner's insurance policies by signing a contract paying a premium to an insurance company. If a covered loss occurs, the insurer is obliged by the terms of the contract to honor the insured's claim. For some policyholders, the amount of insurance benefits received from their insurer will greatly exceed the expense of premiums paid. Others may never make a claim or receive any benefit other than the peace of mind rendered by the security of an insurance policy. When averaged, the total claims expense paid by an insurer should be less than the total premiums paid by their policyholders, with the difference allocated to overhead and profit. Insurance companies also earn investment profits. These are generated by investing premiums received until they are needed to pay claims. This money is called the 'float'. The insurer may make profits or losses from the value change in the float as well as interest or dividend on the float. In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, at the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well.

Gambling analogy

Some people erroneously consider insurance a type of wager (particularly as associated with moral hazard) that executes over the policy period. The insurance company bets that you or your property will not suffer a loss while you put money on the opposite outcome. The difference in the fees paid to the insurance company versus the amount for which they can be held liable if an accident happens is roughly analogous to the odds one might expect when betting on a racehorse (for example, 10 to 1). For this reason, a number of religious groups including the Amish and Muslims avoid insurance and instead depend on support provided by their communities when disasters strike. This can be thought of as "social insurance", as the risk of any given person is assumed collectively by the community who will all bear the cost of rebuilding. In closed, supportive communities where others will actually step in to rebuild lost property, this arrangement can work. Most societies could not effectively support this type of system and the system will not work for large risks. For very large risks, Western insurance can also run into difficulties. This is the reason why most homeowner's insurance does not cover floods. A company that sells homeowner's insurance in a given city can fairly accurately estimate how many fires, tornadoes, and so forth it can expect to pay out. However, a flood may impact a large percentage of the city and the company might be unable to deal with this. An example of this is what happened with Hurricane Katrina. However, since in gaming or gambling the game is supposed to be fixed at the start so that the odds are not supposed to be affected by no-game elements by the players. In fire insurance on the other hand, insurers require that policyholders do risk mitigation like installing sprinklers thereby reducing the odds of loss. In addition, after a loss, say disability, insurers specialize in providing rehabilitation to reduce the loss after it occurs. It is only when the odds of the bad outcome nor the severity of loss can be mitigated that insurance is not true insurance. That is when the existence of the fire policy entices a criminal into arson insurance is not truly insuring anything. The gambling analogy holds with insurance in terms of risk and reward. The difference is in the motivation behind the process. When gambling, you are assuming risk that you would not otherwise be exposed to that has the possibility of either a loss or a gain (speculative risk). With insurance, you are managing risk that you could not otherwise avoid, and which does not present the possibility of gain (pure risk). In other words, gambling is not an insurable risk.

History of insurance

Early methods of transferring or distributing risk were practiced by Babylonian traders as long ago as the 2nd millennium BCE. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen. A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage. The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which acted to care for the families and funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed. Toward the end of the seventeenth century, the growing importance of London as a centre for trade led to rising demand for marine insurance. In the late 1680s, Mr Edward Lloyd opened a coffee house which became a popular haunt of ship owners, merchants and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyds of London remains the leading market for marine and other specialist types of insurance, but it works rather differently to the more familiar kinds of insurance. (See Lloyd's of London). Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster Nicholas Barbon opened an office to insure buildings. In 1680 he established England's first fire insurance company, "The Fire Office", to insure brick and frame homes. The first insurance company in the United States provided fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the [http://www.contributionship.com/ Philadelphia Contributionship for the Insurance of Houses from Loss by Fire]. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual State insurance departments. Whereas insurance markets have become centralized nationally and internationally, State insurance commissioners operate individually, though at times in concert through a national insurance commissioner's organization. In recent years, some have called for a federal regulatory system for insurance similar to that of the banking industry. In the State of New York, which has unique laws in keeping with its stature as a global business center, attorney general Eliot Spitzer has been in a unique position to grapple with major national insurance brokerages. Spitzer alleged that Marsh & McLennan steered business to insurance carriers based on the amount of contingent commissions that could be extracted from carriers, rather than basing decisions on whether carriers had the best deals for clients. Several of the largest commercial insurance brokerages have since stopped accepting contingent commissions and have adopted new business models.

Types of insurance

Any risk that can be quantified probably has a type of insurance to protect it. Among the different types of insurance are:
- Automobile insurance, also known as auto insurance, car insurance and in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the vehicle itself. Over most of the United States purchasing an auto insurance policy is required to legally operate a motor vehicle on public roads. Recommendations for which policy limits should be used are specified in a number of books.
- Casualty insurance insures against accidents, not necessarily tied to any specific property.
- Credit insurance pays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death.
- Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase cover to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover failure of a creditor to pay money it owes to the insured. Fidelity bonds and surety bonds are included in this category.
- Health insurance covers medical bills incurred because of sickness or accidents.
- Liability insurance covers legal claims against the insured. For example, a homeowner's insurance policy provides the insured with protection in the event of a claim brought by someone who slips and falls on the property, and brings a lawsuit for her injuries. Similarly, a doctor may purchase liability insurance to cover any legal claims against him if his negligence (carelessness) in treating a patient caused the patient injury and/or monetary harm. The protection offered by a liability insurance policy is two-fold: a legal defense in the event of a lawsuit commenced against the policyholder, plus indemnification (payment on behalf of the insured) with respect to a settlement or court verdict.
- Life insurance provides a cash benefit to a decedent's family or other designated beneficiary, and may specifically provide for burial and other final expenses.
- Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance.
- Total permanent disability insurance insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
- Locked Funds Insurance is a little known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorised parties. In special cases, a government may authorise its use in protecting semi-private funds which are liable to tamper. Terms of this type of insurance are usually very strict. As such it is only used in extreme cases where maximum security of funds is required.
- Marine Insurance covers the loss or damage of goods at sea. Marine insurance typically compensates the owner of merchandise for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier.
- Nuclear incident insurance - damages resulting from an incident involving radioactivive materials is generally arranged at the national level. (For the United States, see Price-Anderson Nuclear Industries Indemnity Act.)
- Political risk insurance can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.
- Professional Indemnity Insurance is normally a mandatory requirement for professional practitioners such as Architects, Lawyers, Doctors and Accountants to provide insurance cover against potential negligence claims. Non licensed professionals may also purchase malpractice insurance, it is commonly called Errors and Omissions Insurance and covers a service provider for claims made against them that arise out of the performance of specified professional services. For instance, a web site designer can obtain E&O insurance to cover them for certain claims made by third parties that arise out of negligent performance of web site development services.
- Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance.
- Terrorism insurance
- Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records done at the time of a real estate transaction.
- Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses and theft.
- Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred due to a job-related injury. A single policy may cover risks in one or more of the above categories. For example, car insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from say, causing an accident). A homeowner's insurance policy in the US typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of health insurance for medical expenses of guests who are injured on the owner's property. Potential sources of risk that may give rise to claims are known as "perils". Examples of perils might be fire, theft, earthquake, hurricane and many other potential risks. An insurance policy will set out in details which perils are covered by the policy and which are not.

Types of insurance companies

Insurance companies may be classified as
- Life insurance companies, who sell life insurance, annuities and pensions products.
- Non-life or general insurance companies, who sell other types of insurance. In most countries, life and non-life insurers are subject to different regulations, tax and accounting rules. The main reason for the distinction between the two types of company is that life business is very long term in nature — coverage for life assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover usually covers a shorter period, such as one year. Insurance companies are generally classified as either mutual or stock companies. This is more of a traditional distinction as true mutual companies are becoming rare. Mutual companies are owned by the policyholders, while stockholders, (who may or may not own policies) own stock insurance companies. Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves. Captive Insurance companies may be defined as limited purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short terms, it is an in-house self-insurance vehicle. Captives may take the form of a "pure" entity (which is a 100% a subsidiary of the self-insured parent company); of a "mutual" captive (which insures the collective risks of industry members) and of an "association" captive (which self-insures individual risks of the members of a professional, commercial or industrial association). Captives represent commercial, economic and tax advantages to their sponsors due to the reductions on costs they help create, the ease for insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which are neither available nor offered in the traditional insurance market at reasonable prices. The types of risk that a captive can underwrite for the parent include property damage, public and products liability, professional indemnity, employee benefits, employers liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance. Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:
- heavy and increasing premium costs in almost every line of coverage;
- difficulties in insuring certain types of fortuitous risk;
- differential coverage standards in various parts of the world;
- rating structures which reflect market trends rather than individual loss experience;
- insufficient credit for deductibles and/or loss control efforts. There are also companies known as 'insurance consultants'. Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies . Similar to an insurance consultant, an 'insurance broker' also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client. Third Party Administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have.

Life insurance and saving

Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. See life insurance. In many countries, such as the US and the UK, tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death.

Financial viability of insurance companies

Financial stability and strength of the insurance company should be a major consideration when purchasing an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future. For that reason, the viability of the insurance carrier is very important. In recent years, a number of insurance companies have become insolvent, leaving their policyholders with no coverage (or coverage only from a government-backed insurance pool with less attractive payouts for losses). A number of independent rating agencies, such as Best's, provide information and rate the financial viability of insurance companies.

Controversies

Insurance insulates too much

By creating a "security blanket" for its insureds, an insurance company may inadvertently find that its insureds may not be as risk-averse as they should be (since the insured assumes the risk belongs to the insurer). This problem is known to the insurance industry as moral hazard. To reduce their own financial exposure, insurance companies have contractual clauses that mitigate their obligation to provide coverage if the insured engages in some kind of behavior that grossly magnifies their risk of loss or liability. For example, liability insurance providers do not provide coverage for liability arising from intentional torts committed by the insured. Even if a provider was irrational enough to try to provide such coverage, it is against the public policy of most countries to allow such insurance to exist, and thus it is usually illegal.

Complexity of insurance policy contracts

Insurance policies can be complex and some policyholders may not understand all the fees, regulation and coverages included in a policy. As a result, people could buy policies at unfavorable terms. In response to these issues, governments often make detailed regulations that set down minimum standards for policies and govern how they may be advertised and sold. Many individuals purchase policies through an insurance broker. The broker can counsel the policyholder on which coverage to purchase and limitations of the policy. A broker generally holds contracts with many insurers which allows the broker to "shop" the market for the best rates and coverage possible.

Redlining

Redlining is the practice of some insurance companies to deny the issuance of coverage in specific geographic areas, usually due to an increased likelihood of risk; the validity of the assessment may be real or perceived, though it is often attributed to discrimination. Evaluation of risk, when an insurer determines a premium or premium rate structure, considers quantifiable factors, including location, credit scores, gender, occupation, marital status, and education level. However, the use of these essential factors, whether inappropriately or not, are often considered to be 'unfair' or discriminatory by some consumers and their advocates, sometimes leading to political disputes about insurers' determination of premiums and possible government intervention to limit the factors used. A refutation to this is that the job of an insurance underwriter is to properly categorize a given risk as to the likelihood that the loss will occur. Any factor that causes a greater likelihood of loss should in theory, be charged a higher rate. This is a basic principle of insurance and must be followed for insurance companies or groups to operate properly, even for non-profit organizations. Thus, discrimination of potential insureds by legitimate factors is central to insurance. Therefore the only thing that can be considered legitimately "unfair" are practices that discriminate against a given group without actual factors that show that the group is a higher risk. So, eliminating real factors discriminates against other insureds by forcing them to bear part of the cost of the disallowed perceived factors.

Health insurance

Health insurance, which is coverage for individuals to protect them against medical costs, is a highly charged and political issue in the United States, which does not have socialized health coverage. In theory, the market for health insurance provision should function in a manner similar to other insurance coverages, but the skyrocketing cost of health coverage has disrupted markets around the globe, but perhaps most glaringly in the US. Please see health insurance for a discussion of this category.

Dental insurance

Dental insurance, like health insurance, is coverage for individuals to protect them against dental costs. Dental insurance usually goes hand-in-hand with health insurance, with most people in the United States receiving it included in their health insurance plan from their employer. Along with receiving dental insurance from your employer, there are ways to receive dental insurance through resellers and companies for individuals and families; although this way tends to be too expensive for most people.

Insurance Patents

New insurance products can now be protected from copying with a business method patent. This may lead to the more rapid introduction of new insurance products as insurance companies will invest more heavily in new product development if they can be reasonably assured that their patents will keep those products from being copied. A recent example of a new insurance product that is patented is telematic auto insurance. It was independently invented and patented by a major US auto insurance company, Progressive Auto Insurance ([http://www.freepatentsonline.com/5797134.html US patent 5,797,134]) and a Spanish independent inventor, Salvador Minguijon Perez ([http://v3.espacenet.com/origdoc?DB=EPODOC&IDX=EP0700009&F=8&RPN=EP0700009&DOC=cca34af1984f0dc47b32e9a9722ad1a148 European Patent EP0700009B1]). The basic idea of telematic auto insurance is that a driver's behavior is monitored directly while the person drives and this information is transmitted to an insurance company. The insurance company then assesses the risk of that driver having an accident and charges insurance premiums accordingly. A driver that drives a lot of distance at high speed, for example, will be charged a higher rate than a driver that drives small distances at low speed. A British auto insurance company, Norwich Union, has taken a license to both the Progressive patent and Perez patent. They have made additional investments in infrastructure to developed a commercial offering called "Pay As You Drive" or PAYD. Many independent inventors are in favor of patenting new insurance products since it gives them protection from big companies when they bring their new insurance products to market. Independent inventors account for 70% of the new US patent applications in this area. Many insurance executives are opposed to patenting insurance products because it creates a new risk for them. [The Hartford] insurance company, for example, had to recently pay US$80 million to an independent inventor, Bancorp Services, in order to settle a patent infringement and theft of trade secret lawsuit for a new type of corporate owned life insurance product invented and patented by Bancorp.

The insurance industry and rent seeking

Certain insurance products and practices have been described as rent seeking by critics. That is, insurance companies have been alleged to have certain products or practices that are only useful due to certain government laws (especially tax laws), and that the insurance industry in these cases generally adds no economic value but instead supports politicians who will continue the legal regime which gives the insurance company these benefits. For example, in the United States the current tax rules generally allow owners of variable annuities and variable life insurance to invest in the stock market and defer paying any taxes until withdrawals are made. Often this tax avoidance is the only benefit gained from purchasing these products instead of a mutual fund. Another example is the legal infrastructure which allows life insurance to be held in an irrevocable trust which is used to pay an estate tax while the proceeds itself are immune from the estate tax.

Glossary

- 'Combined Ratio' = loss ratio + expense ratio. Loss Ratio is calculated by dividing the amount of losses by the amount of written premium. Expense ratio is calculated by dividing the amount of operational expenses by the amount of earned premium. A lower number indicates a better return on the amount of capital placed at risk by an insurer.

Quote

- Hank Greenberg told his board of directors, "you can't even spell 'insurance'"[http://editor.slate.msn.com/default.aspx/id/2116167/nav/ais/] (hearsay, April 2005)

External links

- [http://www.iii.org/media/facts/statsbyissue/industry Insurance industry statistics in the U.S.]
- [http://www.insuranceonline.org.uk UK Insurance company reviews and links]
- [http://www.1click-insurance.co.uk/ Insurance directory for buying insurance in the UK]
- [http://www.eh.net/encyclopedia/?article=murphy.life.insurance.us Life Insurance in the United States through World War I]
- [http://www.encyclopedia.com/html/section/insuranc_TheHistoryofInsurance.asp Columbia Encyclopedia: The History of Insurance]
- [http://www.life-assurance-bureau.co.uk/faq-general/faq-home.htm Huge list of insurance based topics - also includes general finance]
- [http://www.insurance-owl.com Insurance information Centre]
- Category:Service industries ja:保険

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Jet Aviation