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1 – 10 of over 16000Alliances 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…
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.
– This paper aims to explain how airlines in India and customers can both benefit by the unbundling of services.
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.
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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.
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.
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The purpose of this paper is to develop a simple model illustrating the benefits of operating a diverse fleet of aircraft.
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.
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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…
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.
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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 whether…
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.
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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 global…
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.
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Amin Mojoodi, Saeed Jalalian and Tafazal Kumail
This research aims to determine the ideal fare for various aircraft itineraries by modeling prices using a neural network method. Dynamic pricing has been studied from the…
Abstract
Purpose
This research aims to determine the ideal fare for various aircraft itineraries by modeling prices using a neural network method. Dynamic pricing has been studied from the airline’s point of view, with a focus on demand forecasting and price differentiation. Early demand forecasting on a specific route can assist an airline in strategically planning flights and determining optimal pricing strategies.
Design/methodology/approach
A feedforward neural network was employed in the current study. Two hidden layers, consisting of 18 and 12 neurons, were incorporated to enhance the network’s capabilities. The activation function employed for these layers was tanh. Additionally, it was considered that the output layer’s functions were linear. The neural network inputs considered in this study were flight path, month of flight, flight date (week/day), flight time, aircraft type (Boeing, Airbus, other), and flight class (economy, business). The neural network output, on the other hand, was the ticket price. The dataset comprises 16,585 records, specifically flight data for Iranian airlines for 2022.
Findings
The findings indicate that the model achieved a high level of accuracy in approximating the actual data. Additionally, it demonstrated the ability to predict the optimal ticket price for various flight routes with minimal error.
Practical implications
Based on the significant alignment observed between the actual data and the tested data utilizing the algorithmic model, airlines can proactively anticipate ticket prices across all routes, optimizing the revenue generated by each flight. The neural network algorithm utilized in this study offers a valuable opportunity for companies to enhance their decision-making processes. By leveraging the algorithm’s features, companies can analyze past data effectively and predict future prices. This enables them to make informed and timely decisions based on reliable information.
Originality/value
The present study represents a pioneering research endeavor that investigates using a neural network algorithm to predict the most suitable pricing for various flight routes. This study aims to provide valuable insights into dynamic pricing for marketing researchers and practitioners.
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Hamed Khadivar, Miles Murphy and Thomas Walker
This study investigates the impact of financial health and corporate governance on aviation safety, aiming to fill a critical gap in existing research. The purpose of this study…
Abstract
Purpose
This study investigates the impact of financial health and corporate governance on aviation safety, aiming to fill a critical gap in existing research. The purpose of this study is to identify how these factors influence the safety records of airlines and provide insights for regulators, airlines and stakeholders to enhance aviation safety.
Design/methodology/approach
Using a comprehensive international sample spanning 1950–2009 and later, this empirical analysis draws on diverse databases. The authors examine 372 airlines across 70 countries from 1990 to 2016. The research uses statistical models to analyze the relationship between financial indicators, corporate governance quality and aviation safety, addressing limitations of prior single-country studies.
Findings
The findings reveal a significant inverse relationship between financial health and accident propensity, with profitable airlines exhibiting lower accident rates. Additionally, airlines with higher corporate governance quality, characterized by qualified directors and stable leadership, experience fewer accidents. The study identifies key factors such as pilot errors, mechanical failures and adverse weather, contributing to approximately 75% of accidents, emphasizing the importance of organizational control.
Practical implications
This research has crucial implications for aviation safety policies and practices. Regulators and international organizations, such as International Civil Aviation Organization and International Air Transport Association, should allocate resources to supervise financially vulnerable airlines and those with lower governance quality. Governments might consider incentivizing safety practices through tax deductibility for relevant expenses. Shareholders are encouraged to prioritize qualified, younger and less busy directors, recognizing their impact on safety performance.
Originality/value
This study contributes to existing literature by addressing methodological biases and offering a comprehensive international perspective. The identification of a link between financial health, corporate governance and accident rates in the aviation industry provides valuable insights. The research informs policymakers, regulators and industry stakeholders on effective strategies to improve safety by considering financial and governance factors under their control.
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This study aims to investigate the potential impact and passenger perceptions of integrating multimedia books within airline services, aiming to elucidate the evolving landscape…
Abstract
Purpose
This study aims to investigate the potential impact and passenger perceptions of integrating multimedia books within airline services, aiming to elucidate the evolving landscape of in-flight entertainment and reading experiences.
Design/methodology/approach
A quantitative research methodology was used, using a structured questionnaire distributed to presenters at the International Federation of Library Associations.
Findings
Analysis revealed varying passenger interest in multimedia books, with approximately 57.7% displaying engagement, while 40.4% demonstrated limited interest or none. However, a notable majority (60.6%) preferred multimedia books over traditional print books during flights. Furthermore, 90.4% perceived a positive impact of multimedia books on flight reading experiences, leading to increased satisfaction (81.7%) and a high likelihood of recommending airlines offering such content (91.3%).
Research limitations/implications
The study's limitations include a specific focus on International Federation of Library Associations and Institutions (IFLA) World Library and Information Congress (WLIC) presenters, potentially limiting broader generalisations. Further research might explore the preferences of a wider demographic range and incorporate qualitative aspects to deepen understanding. Airlines could leverage multimedia books to enhance passenger satisfaction, attract diverse audiences and foster cultural inclusivity within in-flight entertainment.
Originality/value
This study contributes insights into the evolving landscape of in-flight entertainment, emphasising the significant potential and positive impact of integrating multimedia books within airline services. It underscores the importance of catering to diverse passenger preferences and enhancing overall satisfaction during air travel.
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