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The life span of an aircraft is usually around 30 years in the commercial aviation industry. During this time span, aircraft needs maintenance to stay in service. The cost of maintenance, repair and overhaul (MRO) activities in its pure nature is a significant portion of operations, accounting around 10 percent of all cost drivers. The purpose of this paper is to design/develop and critically assess a comprehensive model of operations at Turkish Technic – the MRO department of Turkish Airlines.

A comprehensive systems dynamics model is designed and developed to holistically represent and critically assess the different facets of MRO operations to help in analyzing various decision scenarios at Turkish Airlines.

The developed system dynamics (SD) model presented unique opportunities to test various MRO operations’ work load and aircraft fleet expansion policy alternatives. The model can also be used as a “learning laboratory” by altering various system parameters and testing different policies. The case study results suggested that MRO operations have a direct impact on the available number of airworthy aircrafts and hence, the usable fleet seat capacity; to sustain a profitable airline fleet, the airline companies should take into account the unique characteristics/needs of MRO operations for both existing and new/prospective aircrafts.

There are several SD studies in the literature focusing on the airline industry, but the MRO operations are virtually neglected in them. Hence, the proposed SD model contributed to the extant literature. The value of the developed model stems from its potential use in the critical analysis of decision scenarios as well as being leveraged as a training/learning laboratory.

The purpose of this paper is to explore the effective taxonomies of airline green operations strategy.

To this end, a sample of 23 airlines from five regions (North America, South America, Europe, Asia and the Middle East) was surveyed. The annual sustainability reports of the surveyed airlines for the period 2013‒2016 were retrieved from the Global Reporting Initiatives website. K-means clustering analysis was used to generate taxonomic clusters of airline green operations strategy. A special data analysis technique, called rank analysis, was also adopted to identify the significant green actions and develop indicative models.

This study revealed that three effective taxonomies were adopted by airlines: a low-effect strategic pattern, a low-to-moderate effect strategic pattern and a high-effect strategic pattern. A different combination of green operation actions characterized each strategic pattern.

The research contribution of taxonomies of green operations strategy has so far been limited, country focused and concentrated on the manufacturing sector. This study reported the taxonomies and performed an in-depth analysis of the categories of effective actions taken to promote green performance. Moreover, this study developed indicative models for the relationship between categories of action and green performance for each strategic pattern, an action that has seldom been reported by previous studies of green operations strategies for airlines.

This study aims to evaluate and rank green airlines by proposing a novel approach that integrates different multi-criteria decision-making (MCDM) techniques.

Three MCDM techniques were adopted: Decision-Making Trial and Evaluation Laboratory (DEMATEL) addressed the impact relationships between Airline Green Operations (AGOs) and classified them into cause and effect; analytical hierarchy process (AHP) prioritized these actions and found their global and local weights; and Techniques to Order Preferences by Similarity to Ideal Solution (TOPSIS) used the weighted actions to evaluate and rank 20 green airlines as a case study.

DEMATEL outcomes provide the first AGOs impact relationships map (IRM), classify AGOs into cause and effect actions and provide better understanding how these green operations affect each other. According to the AHP outcomes, “GHG1and fuel” and “GHG2 and Energy” were the most important set of actions, respectively. Finally, a new evaluation and ranking for 20 green airlines has been presented.

The AGOs IRM provides a better understanding of the airline green operations and how they affect each other. The new evaluation and ranking technique helps airlines to identify their green strength and weakness areas and supports their sustainability processes.

The increasing importance of AGOs evaluation and analysis highlights the importance of green airlines studies like this one. This study analyzed AGOs, their impact relationships, developed their IRM and provided a new worldwide green airline benchmarking base.

Based on our experience related to the passenger terminal re-design at Sydney airport and its impact on belly-hold freight chains at the airport, this chapter takes a more general view on managing freight chains at large international airports. We aim to review literature and documents related to this area and also to undertake a fleet/traffic analysis of the 100 largest multi-function airports (when measured in terms of scheduled cargo traffic) to get a better understanding of current practice, particularly in the light of potential conflicts or benefits of the joint production of passenger and freight services. While most literature has focused on hub-and-spoke aspects of international hubs, relatively little has been done on economies of scale and scope of passenger and freight airline operations (including timing) at such hubs. This chapter explores to what extent terminal organisation of international airports impacts on the use of dedicated freighter of combination airlines and hence airline efficiency. A key finding in terms of airline efficiency is that economies of scale of air cargo operation appear to exist at the aircraft level as dedicated freighters are used more often if a sufficient threshold of air freight demand is observed at the airport level.

In this paper, the authors draw from the concept of a “focused factory” to examine whether a focused strategy provides superior performance over a non-focused strategy in firms experiencing service disruptions.

The authors test their hypotheses using panel data of the US domestic airline industry from 1998 to 2019.

Overall, the study findings show that a focused strategy provides superior financial performance over a non-focused strategy in both stable environments and unpredictable environments. The authors also find that the effect of service disruptions on profitability is less pronounced for firms following a focused strategy. This shows that focused firms need to grow over time to sustain profitability. Their post hoc analysis shows that for a non-focused strategy (but not for a focused strategy), firm size moderates the effect of service disruptions on profitability. This suggests that a firm pursuing a non-focused strategy can mitigate the negative effect of service disruptions by increasing its size.

This is the first study that examines the effectiveness of the focused strategy in mitigating service disruptions. The results provide further support for the effectiveness of the focused strategy in responding to service disruptions in service organizations.

Air carriers and aircraft manufacturers are investing in technologies and strategies to reduce fuel consumption and associated emissions. This chapter reviews related issues to assess airline fuel efficiency and offers various empirical evidences from our recent work that focuses on the U.S. domestic passenger air transportation system. We begin with a general presentation of four methods (ratio-based, deterministic frontier, stochastic frontier, and data envelopment analysis) and three perspectives for assessing airline fuel efficiencies, the latter covering consideration of only mainline carrier operations, mainline–subsidiary relations, and airline routing circuity. Airline fuel efficiency results in the short run, in particular the correlations of the results from using different methods and considering different perspectives, are discussed. For the long-term efficiency, we present the development of a stochastic frontier model to investigate individual airline fuel efficiency and system overall evolution between 1990 and 2012. Insight about the association of fuel efficiency with market entry, exit, and airline mergers is also obtained.

The AirAsia India 2017 (AAI) case presents the situation faced by Tony Fernandes, the CEO of the AirAsia group of companies, in 2017, when he had to respond to the changes in aviation policy made by the Ministry of Civil Aviation (MCA). As per the changes, an airline operating in India could start its international operations without having five years of domestic flying experience provided it deployed 20 of its aircraft or 20% of the total capacity, whichever was higher, for domestic operations. The objective of this case is to help discuss issues relating to sustaining late entry and exploring new growth opportunities in the context of regulatory changes.

Following deregulation, the airline industry has dramatically changed. In addition to numerous mergers and bankruptcies, the industry has also seen an influx of small, “low-cost” carriers who offer differentiated competition to the traditional legacy carriers. These low-cost carriers traditionally avoided the hub-and-spoke networks of legacy carriers, offering point-to-point service often on adjacent routes. However, events of the past 10–15 years, including the terrorist attacks of 9/11, rising fuel prices, and economic recessions, have led to a shift in the operations of these airlines. The legacy carriers have unbundled many of their services, most notably through baggage fees, seeking to improve efficiency. Low-cost carriers have expanded services into major airports and have shifted to more direct route level competition with the legacy carriers as they use their cost efficiency advantages to their advantage. In this chapter, we examine airport and route choice decision to serve by legacy and low-cost carriers over time. Our descriptive and econometric models point to convergence of operations in terms of the airports and routes that low-cost and legacy carriers serve, with the implication that the current competitive atmosphere improves efficiency as the distinctions between legacy and low-cost carriers have become less obvious.

The case study highlights two strategic angles – that of the business unit (business strategy, profitability, market leadership. organizational culture, operational turnaround, industry structure and competitive dynamics) and the owner (returns, repositioning strategy and funding plan). By the end of this case study, students would be able to understand the changing competitive forces of a dynamic industry; analyse the circumstances leading to a change in the control of a firm from the state to the private sector; understand the logic of acquiring a perennially loss-making firm operating in a volatile environment without a unique strategy; identify a firm’s strategic and operational choices for financial turnaround, return to profitability and regaining market leadership; and learn about the actual strategic realities and choices confronting a troubled business organization in a difficult industry.

When the Tata Group took over Air India on 27 January 2022 from the state that had ownership for 68 years, Air India was under a long spell of poor performance, bleeding losses and unmanageable levels of debt. Unsatisfactory customer service, management issues and competition were the key reasons. Therefore, a crucial question facing the group’s Chairman N. Chandrasekaran was what workable strategy he could use to reposition Air India and make it profitable again so as to recover the $7.5bn of estimated investment involved in the acquisition and turnaround.

This case study is intended for undergraduate and graduate executive education levels in business administration and management and allied subjects, particularly for courses in strategic management, marketing, financial management, turnaround and transformation, mergers and acquisitions and organizational change.

Teaching notes are available for educators only.

CSS 11: Strategy.