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Open Access
Article
Publication date: 2 June 2021

Manuel E. Pascual and Lisa Nicole Cain

The airline industry has been severely impacted by COVID-19 due to widespread travel restrictions. Its current response is crucial to ensure continued operations after the…

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Abstract

Purpose

The airline industry has been severely impacted by COVID-19 due to widespread travel restrictions. Its current response is crucial to ensure continued operations after the global pandemic is resolved. One resource the airlines are leveraging is loyalty programs. This study aims to examine the viability of leveraging loyalty programs in times of crisis.

Design/methodology/approach

This study employs a case study methodology to examine how one company, American Airlines, has used its loyalty program to survive a pandemic and alleviate the financial costs associated with limited and restricted travel.

Findings

American Airlines' AAdvantage loyalty program structure may be used as a benchmark to understand how airlines can anchor their loyalty base to reinvigorate travel interest and use these programs as safeguards in critical instances that may arise in the future.

Research limitations/implications

The case was bound by the fact that the pandemic was still a threat during the time of analysis. The findings of this case study go beyond the airline industry and may inform other hospitality and tourism organizations on the benefits of loyalty programs in times of financial distress.

Originality/value

This is the first known case study examining the strengths and opportunities of the structure of the American Airlines' AAdvantage program as a means for surviving in a time of crisis. Moreover, understanding how to mitigate the long-term effects of crises may help to inform future short-term strategies of airlines and other hospitality and tourism organizations for navigating unexpected shocks to their ecosystem.

Details

International Hospitality Review, vol. 36 no. 1
Type: Research Article
ISSN: 2516-8142

Keywords

Article
Publication date: 1 February 2000

Stephan A. Vander Kraats

Alliances and code sharing have become increasingly popular among airlines of all sizes as costs associated with expansion become impractical. To remain cost efficient and…

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Abstract

Alliances and code sharing have become increasingly popular among airlines of all sizes as costs associated with expansion become impractical. To remain cost efficient and compete effectively in various markets, most airlines have formed alliances with other airlines to further strengthen their economic potential. Economic benefits of alliances and code sharing are examined. Either arrangement gives the airline a competitive advantage over those that do not enter into these agreements.

Details

Competitiveness Review: An International Business Journal, vol. 10 no. 2
Type: Research Article
ISSN: 1059-5422

Article
Publication date: 13 July 2015

Atul Arun Pathak

– This paper aims to explain how airlines in India and customers can both benefit by the unbundling of services.

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Abstract

Purpose

This paper aims to explain how airlines in India and customers can both benefit by the unbundling of services.

Design/methodology/approach

The paper explores how a recent regulatory change allowing unbundled services will affect the airline industry in India. Using illustrations, it highlights the benefits to the airlines and to the customers. It recommends the strategies that airlines can follow.

Findings

Airlines in India can now offer unbundled services. However, regulatory authorities need to allow greater flexibility to airlines. Given more flexibility, airlines can design offerings that will improve their profitability while simultaneously benefiting customers.

Practical implications

The government needs to go beyond the current regulatory changes. Providing increased flexibility will benefit both airlines and customers. Airlines would need to understand customers more intimately, experiment in the market, lobby for flexibility and develop strategic agility to benefit from the changed regulations on unbundled services.

Social implications

It concedes that airlines can now design unbundled services such that only those customers who value a service get charged for the service. Those customers who do not need a service can get away by paying a lower fare. The government has taken the first steps in the right direction. Once it provides greater flexibility, the airlines in India can benefit significantly.

Originality/value

The paper considers the unique context of the airline industry in India where recent regulatory changes are likely to make the industry more dynamic and improve profitability of airlines. It provides insights in to the challenges faced under the current system and recommends strategies for the government and companies to follow.

Details

Strategic Direction, vol. 31 no. 8
Type: Research Article
ISSN: 0258-0543

Keywords

Article
Publication date: 21 August 2007

Hamad Al‐kaabi, Andrew Potter and Mohamed Naim

This paper aims to evaluate the main business models used for airlines' maintenance, repair and overhaul (MRO) activities and determine the activities to which these relate.

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Abstract

Purpose

This paper aims to evaluate the main business models used for airlines' maintenance, repair and overhaul (MRO) activities and determine the activities to which these relate.

Design/methodology/approach

A critical literature review is used to develop a conceptual model of MRO activities. This is evaluated through a SWOT analysis before an exploratory study of eight airlines is used to confirm the applicability of the conceptual model.

Findings

Four levels of MRO outsourcing are identified; from fully outsourced to fully in‐sourced. From the exploratory study it is shown that critical MRO activities such as line maintenance are frequently in‐sourced, while activities with low demand at an airline level such as engine maintenance are often outsourced.

Practical implications

MRO represent around 10‐15 per cent of an airline's operational costs. By identifying the strength and weaknesses of different MRO models, it is possible to evaluate alternative MRO strategies.

Originality/value

Unlike other research in maintenance which was aimed mainly at the manufacturing sectors, this research provides insights into the maintenance practises in a service sector. In particular this research studies the different outsourcing levels existing in airlines' MRO. The knowledge gained by understanding the mechanism of outsourcing in airlines' MRO can be further extended to other industries and help in best configuring their maintenance units.

Details

Journal of Quality in Maintenance Engineering, vol. 13 no. 3
Type: Research Article
ISSN: 1355-2511

Keywords

Article
Publication date: 18 May 2012

Stephen D. Treanor

The purpose of this paper is to develop a simple model illustrating the benefits of operating a diverse fleet of aircraft.

1478

Abstract

Purpose

The purpose of this paper is to develop a simple model illustrating the benefits of operating a diverse fleet of aircraft.

Design/methodology/approach

The paper is theoretical. It describes how real options are beneficial to the firm in both capital budgeting and risk management. It illustrates the use of real options in the airline industry, and how real options are used as a risk management tool. Then the model is developed which illustrates how a diverse fleet can provide an airline protection against fuel price risk.

Findings

The results of the model show that a diverse fleet is value enhancing to an airline during periods when fuel prices are high or uncertain. Furthermore, this paper shows that a diverse fleet provides an airline with an operational hedge to jet fuel prices. Though the paper focuses on the airline industry, the results are applicable to those industries vulnerable to volatile input costs, and prohibitive abandonment and re‐entry costs.

Originality/value

The paper uses real option analysis to show the benefits for an airline deriving from operating a diverse fleet of aircraft.

Details

Management Research Review, vol. 35 no. 6
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 1 August 1996

Hannu Seristo

Summarizes European airline executives’ views on the reasons for the cost problem in major airlines and on the potential areas and measures of cost reduction in airline

4000

Abstract

Summarizes European airline executives’ views on the reasons for the cost problem in major airlines and on the potential areas and measures of cost reduction in airline operations. Presents a survey where 28 executives from 17 European airlines were respondents. In the executives’ opinion the cost problem in major European airlines is primarily due to high salaries and inflexible work rules. Of the various functions in airlines, general administration was seen as the least cost efficient, whereas flight operation was seen as an area with most potential for cost reduction. Most respondent airlines had made route and fleet changes after the beginning of 1991 to reduce costs. Concludes from the survey results that privatization would be an important step towards more efficient airline operations. Also, flexibility from the labour unions would be very much welcomed.

Details

European Business Review, vol. 96 no. 4
Type: Research Article
ISSN: 0955-534X

Keywords

Article
Publication date: 1 March 1995

Vasanthakumar N. Bhat

Customer service is of significant concern to an airline passenger.The on‐time performance of an airline is one of the important indicatorsof customer service. Analyses…

4290

Abstract

Customer service is of significant concern to an airline passenger. The on‐time performance of an airline is one of the important indicators of customer service. Analyses whether there is any relationship between airline flight delays and the financial situation of an airline. Identifies association between the probability of delay and financial factors of an airline using logistic regression. Indicates that the revenue growth and current ration reduce and leverage, airline size and operating revenue per employee increase the likelihood of a flight being delayed. Suggests the model presented should be of use to quality control professionals to identify causes of (binary) outcomes such as good and bad, on‐time and late, acceptable and not acceptable and so on.

Details

International Journal of Quality & Reliability Management, vol. 12 no. 2
Type: Research Article
ISSN: 0265-671X

Keywords

Case study
Publication date: 1 January 2011

Gaunette Sinclair-Maragh

Hospitality and tourism management; strategic management; marketing, transportation system management and human resource management.

Abstract

Subject area

Hospitality and tourism management; strategic management; marketing, transportation system management and human resource management.

Study level/applicability

Undergraduate in business and management and hospitality and tourism management.

Case overview

This teaching case outlines the historical background, successes and challenges of the national airline of Jamaica. It shows how a national airline, which is a heritage asset and one that has provided nostalgic and sentimental value to the Jamaican people and its passengers, had to be divested. The airline has been faced with several challenges; the major one being high-operating costs, especially in light of the global economic recession. The case also highlights the various procedures carried out by the Government of Jamaica before and after the divestment arrangement and also by the acquirer, Caribbean Airlines.

Expected learning outcomes

The student should be able to: first, differentiate among the various strategic management terms and concepts used in the case; second, explain the importance of strategic decisions versus emotional decisions; third, assess the environmental factors that impacted Air Jamaica's operation; fourth, analyse the environmental factors that should have been considered by Caribbean Airlines before making the decision to acquire Air Jamaica; fifth, carry out a comparative analysis of the various corporate-level strategies to identify the best option for the Government of Jamaica; sixth, propose reasons why Caribbean Airlines acquired Air Jamaica.

Supplementary materials

Teaching note.

Details

Emerald Emerging Markets Case Studies, vol. 1 no. 1
Type: Case Study
ISSN: 2045-0621

Keywords

Book part
Publication date: 1 January 2012

Ian Savage

Safety is arguably the most important “quality” attribute of commercial aviation, yet it rarely figures into overt interfirm rivalry. Usually, airlines do not even allude…

Abstract

Safety is arguably the most important “quality” attribute of commercial aviation, yet it rarely figures into overt interfirm rivalry. Usually, airlines do not even allude to their safety record vis-à-vis rivals in their advertising and press statements. Moreover, statistical analysis by independent parties usually indicates that peer airlines within the same geographic region and segment of the industry have indistinguishable safety records (Barnett, 2010).

Details

Pricing Behavior and Non-Price Characteristics in the Airline Industry
Type: Book
ISBN: 978-1-78052-469-6

Book part
Publication date: 25 August 2014

Bruce Prideaux and Randall Whyte

In recent decades there have been substantial changes in the structure of the global airline industry commencing with deregulation closely followed by the emergence of…

Abstract

In recent decades there have been substantial changes in the structure of the global airline industry commencing with deregulation closely followed by the emergence of Low-Cost Carriers (LCCs). LCCs have greatly increased the opportunities for affordable air travel by generating considerable opportunities for many destinations to tap into new markets. This paper examines a range of issues related to the operation of LCCs and how destinations may be adversely affected when problems emerge. Specifically the paper examines problems that arose in Australia in 2011 when Tiger Airways Australia was grounded for an extended period. Until its grounding the airline, while having a poor reputation for on-time service and customer service, did have a significant impact on airfares which rose on average by 15% during the period of it was grounded.

Details

Advances in Hospitality and Leisure
Type: Book
ISBN: 978-1-78190-746-7

Keywords

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