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Article
Publication date: 31 October 2018

Seoki Lee, Bora Kim and Sunny Ham

Considering the increasing significance of corporate social responsibility (CSR) in the corporate world and the mixed findings of the financial implication of CSR…

Abstract

Purpose

Considering the increasing significance of corporate social responsibility (CSR) in the corporate world and the mixed findings of the financial implication of CSR investment in the financial economics literature, the purpose of this study is to examine the relationship between (im)material CSR investment and firm performance and the moderating role of airline type and economic conditions based on the stakeholder theory and institutional pressure argument.

Design/methodology/approach

This study uses a two-way random-effects model by firm and year along with using clustering coefficient estimation by firm to control for the possibility of inflated standard errors because of autocorrelation across years within a given firm.

Findings

This study finds that both material and immaterial CSR initiatives do not directly influence firm performance, but airline type and economic conditions do moderate the relationship. In specific, the study found that airlines’ investments in material CSR initiatives show an indifferent effect on firm performance between low-cost and full-service carriers and also between non-recessionary and recessionary periods. On the other hand, investments in immaterial CSR initiatives present different impacts on firm performance between low-cost and full-service carriers and between non-recessionary and recessionary periods. In details, the effect is more negative for low-cost carriers and recessionary periods than full-service carriers and non-recessionary periods.

Originality/value

This is the first empirical investigation of materiality for the airline industry in relation to firm performance using the industry-specific Materiality Map developed by the Sustainability Accounting Standards Board. Further, this study incorporates two additional moderators (airline type and economic conditions) to enhance the understanding of the proposed relationships between (im)material CSR and firm performance.

Details

International Journal of Contemporary Hospitality Management, vol. 30 no. 12
Type: Research Article
ISSN: 0959-6119

Keywords

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Article
Publication date: 7 September 2010

Mahour Mellat Parast and Elham (Ellie) H. Fini

This study aims to investigate the effect of productivity and quality on profitability in the US airline industry.

Abstract

Purpose

This study aims to investigate the effect of productivity and quality on profitability in the US airline industry.

Design/methodology/approach

Airlines operations and performance data were used to determine the effect of productivity and quality on profitability. Correlation and multivariate regression analysis have been used for data analysis.

Findings

The results show that labor productivity is the most significant predictor of profitability. On‐time performance has no relationship with profitability. The findings suggest that labor productivity, gas price, average annual maintenance cost and employee salary are significant predictors of profitability. The relationship between labor productivity and employee salary with profitability is positive, while gas price and average annual maintenance cost have a negative relationship with profitability.

Research limitations/implications

The research could be more detailed by taking into account measures of airline safety. Additional measures for service quality could be considered.

Practical implications

Operational performance (labor productivity) is the main source of profitability in the US airline industry followed by customer satisfaction and service quality.

Originality/value

The study captures the performance of the airline industry based on longitudinal data from 1989 to 2008. Previous studies have used either quarterly or monthly observations. Second, the study examines the significance of productivity and quality on profitability. Previous studies have provided little insight regarding the effect of productivity and quality on profitability.

Details

Managing Service Quality: An International Journal, vol. 20 no. 5
Type: Research Article
ISSN: 0960-4529

Keywords

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Article
Publication date: 3 June 2020

Pedram Fardnia, Thomas Kaspereit, Thomas Walker and Sizhe Xu

This paper investigates whether financial factors, which are presumed to influence an airline's maintenance, purchasing, and training policies, are associated with the air…

Abstract

Purpose

This paper investigates whether financial factors, which are presumed to influence an airline's maintenance, purchasing, and training policies, are associated with the air carrier's safety performance.

Design/methodology/approach

In this paper, we employ a series of univariate and multivariate tests (OLS and Poisson regressions) to examine whether an airline's financial well-being as well as a country's legal and economic environment affect the airline's accident rate. Our study is the first to employ an international sample that covers 110 airlines in 26 countries over the period 1990–2009.

Findings

We document an inverse relationship between the profitability of air carriers and their accident propensity. Other financial variables such as liquidity, asset utilization, and financial leverage also appear to affect an airline's safety record, although these findings do not reach significance in all models. Flight equipment maintenance and overhaul expenditures are negatively related to accident rates. In addition, our results show that country-level variables related to the legal and economic environment have a significant effect on airline safety. Specifically, airlines in countries with strong law enforcement, more stringent regulatory systems, and better economic performance have superior safety performance. A series of robustness tests confirms our results.

Originality/value

The unique contributions of the study are (1) that it is the first to explore the drivers of safety performance in a cross-country context and (2) that it introduces a novel index of capacity when computing accident rates. By using data from 110 airlines in 26 countries, the study does not only provide insights into the firm-level but also the country-level determinants of an airline’s safety performance. The results of this research should be of interest both to academics and to regulators who develop, oversee, and implement policies targeted at improving aviation safety on a national and supranational level.

Details

International Journal of Managerial Finance, vol. 17 no. 1
Type: Research Article
ISSN: 1743-9132

Keywords

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Publication date: 14 December 2018

Muhammad Asraf Abdullah and NurulHuda Mohd Satar

This chapter examines the influence of outsourcing on airlinesperformance from countries of the Asia Pacific region. Performance in the context of this study is drawn…

Abstract

This chapter examines the influence of outsourcing on airlinesperformance from countries of the Asia Pacific region. Performance in the context of this study is drawn from productivity growth and technical efficiency scores that are calculated using the standard data envelopment analysis (DEA) approach. We utilize data from airlines over the period 2003–2011 and estimate the impact of outsourcing on productivity and technical efficiency using generalized method of moments (GMM) estimators. The findings from DEA reveal an improvement in the technical efficiency score of airlines from Asia Pacific. Nonetheless, productivity estimates indicate fluctuations in the productivity growth trend of airlines, attributable to global economic recession in 2007/2008. GMM estimation results, however, suggest negative impacts of outsourcing on technical efficiency and productivity of the airlines from Asia Pacific countries. We offer several explanations for these outsourcing findings. Heavy outsourcing of airlines activities particularly maintenance of aircraft may negatively affect aircraft utilization and ultimately erode the service level of airlines. The erosion of the service level of airlines would affect the demand for air travel in a downward manner, thereby lowering the technical efficiency and productivity of airlines. Also, relatively low labor costs enjoyed by airlines in the Asia Pacific region would suggest that having many airline activities in-house would save operating expenses attributable to labor costs.

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Article
Publication date: 1 April 2005

Jackie Fry, Ian Humphreys and Graham Francis

This paper aims to explore the use of best practice benchmarking in civil aviation.

Abstract

Purpose

This paper aims to explore the use of best practice benchmarking in civil aviation.

Design/methodology/approach

Evidence was gathered from two international questionnaire surveys of the top 200 airlines and the top 200 airports. Supplementary evidence included interviews with airline and airport managers.

Findings

The profile of responses was a good match to the samples. Benchmarking was identified as the most used performance improvement technique for both airlines and airports. Larger airlines were more likely to engage in benchmarking. Ease of usage and the cost relative to other performance improvement techniques were important factors in determining benchmarking uptake. Problems of data comparability and competitive sensitivity were raised. Airports had a greater tendency to concentrate on benchmarking with similar organisations and placed a relatively greater emphasis on its use for performance measurement over process improvement.

Research limitations/implications

Further research should include a sample of detailed case studies to investigate exactly how different airlines and airports are using benchmarking.

Practical implications

Performance measurement has become increasingly important in aviation as markets become more competitive and the number of asymmetric shocks seems to increase.

Originality/value

The surveys revealed a very high utilisation of benchmarking, although a range of activities were actually being undertaken under the banner of benchmarking. The high uptake of benchmarking is probably due, to the turbulent nature of civil aviation that has placed significant economic pressures on managers.

Details

Benchmarking: An International Journal, vol. 12 no. 2
Type: Research Article
ISSN: 1463-5771

Keywords

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Article
Publication date: 1 April 2005

Peter Mackenzie‐Williams

This paper aims to describe the processes used to ensure that the comparisons made between airport and airline performance are as meaningful as possible, and to highlight…

Abstract

Purpose

This paper aims to describe the processes used to ensure that the comparisons made between airport and airline performance are as meaningful as possible, and to highlight a number of issues which need to be considered when making performance comparisons in aviation.

Design/methodology/approach

Evidence was gathered from an international data sample of airports and airlines. Operational and financial data was derived from published reports.

Findings

The research illustrates the scale of differences in airport performance levels, and it also highlights the considerable difference in performance levels between airports and airlines. It is clear that many factors can impact on an airport's ability to optimise its performance, and on its relative level of performance when compared to its peers.

Practical implications

The research highlights and demonstrates the need for a degree of understanding of contextual factors when comparing airport performance measures with each other and when comparing airline performance.

Originality/value

Insight into the process by which airport and airline performance measurements can be compared with each other.

Details

Benchmarking: An International Journal, vol. 12 no. 2
Type: Research Article
ISSN: 1463-5771

Keywords

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Article
Publication date: 1 April 2005

Paul D. Hooper and Andrew Greenall

This paper aims to present the findings of an investigation into environmental reporting practice in the airline sector.

Abstract

Purpose

This paper aims to present the findings of an investigation into environmental reporting practice in the airline sector.

Design/methodology/approach

Evidence was gathered from an international survey of 272 IATA Airlines. Responses accounted 65 per cent of the world's scheduled passenger traffic. Reports were assessed against a framework developed by UK's Association of Chartered and Certified Accountants.

Findings

The paper demonstrates that, despite an increase in the availability of quantitative data and some consistency in the use of key performance indicators, comparing social and environmental performance across the airline sector is fraught with difficulties. Variations in the exact definitions of the indicators used and the suite of functions embraced by the term “airline” are identified as fundamental obstacles to effective sector benchmarking.

Practical implications

Insight into an understanding of some of the pros and cons of comparisons between airline environmental performance data.

Originality/value

The research highlights the limitations of inter airline comparisons regarding environmental data and confirms the need for environmental and social impacts to be reported in a more standardised manner in order to facilitate meaningful dialogue with stakeholders in communities adjacent to airports.

Details

Benchmarking: An International Journal, vol. 12 no. 2
Type: Research Article
ISSN: 1463-5771

Keywords

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Article
Publication date: 14 June 2013

Alka Ashwini Nand, Prakash J. Singh and Damien Power

The purpose of this paper is to test the integrated model of operations strategy as proposed by Schmenner and Swink to explain whether firms trade‐off or accumulate…

Abstract

Purpose

The purpose of this paper is to test the integrated model of operations strategy as proposed by Schmenner and Swink to explain whether firms trade‐off or accumulate capabilities, taking into account their positions relative to their asset and operating frontiers.

Design/methodology/approach

The four major airlines based in Australia were studied. The paper is based on longitudinal data obtained from secondary sources. The four operations capabilities cost, quality, delivery and flexibility, and asset and operating frontiers, were all measured with proxy variables.

Findings

The study provides some support for the integrated model. Firms do appear to trade‐off capabilities when their asset and operating frontiers are close to each other. Firms show signs of accumulation when the asset frontiers are expanding significantly over time. There is indirect evidence that firms could be accumulating capabilities when the gap between the two frontiers is large.

Practical implications

The study provides insights into when firms trade‐off or accumulate capabilities. A good understanding of asset and operating frontiers is important in this regard. Managers need to better identify, establish and combine their firms' capabilities in response to varying internal and external contingencies.

Originality/value

The paper provides an original and detailed empirical validation of Schmenner and Swink's integrated model. In doing so, this study contributes to informing and clarifying the debate in the operations strategy area relating to the circumstances in which firms trade‐off and/or accumulate capabilities.

Details

International Journal of Operations & Production Management, vol. 33 no. 7
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 5 June 2007

K.L. Choy, Harry K.H. Chow, W.B. Lee and Felix T.S. Chan

To develop a performance measurement system (PMS) in the application of supplier relationship management operated under a supply chain benchmarking framework. Acting as a…

Abstract

Purpose

To develop a performance measurement system (PMS) in the application of supplier relationship management operated under a supply chain benchmarking framework. Acting as a monitoring tool for evaluating the performance of maintenance logistics providers against the defined performance levels stated in the contract, and facilitating the application of benchmarking approach in maintenance logistics activities.

Design/methodology/approach

A six tiers collaborative management model is designed in building the PMS, by which information sharing of performance history of suppliers is made possible. By following the work flow of the PMS, performance of suppliers is benchmarked with the best‐in‐class supplier, resulting in the identification of the most appropriate supplier for the particular requirement.

Findings

PMS helps a company and its suppliers to understand the performance gap between its service levels with the best‐in‐class practice. The resulting performance gap provides valuable information in the formulating of a new supply chain and strategic plan in solving problems and challenges in aviation industry. By means of PMS, a company can make decisions with the basis of a good relationship with its business partners, especially in the maintenance logistics area.

Research limitations/implications

The design of PMS must take into consideration of the data sources, the duration of taking the required data, and the focal point on collecting information. Moreover, findings from the study have to be revised every two years.

Originality/value

By applying PMS in one of the leading airlines in Hong Kong, suppliers' deficiencies in the logistics performance are identified easily. Moreover, current operational service level is effectively enhanced and the combination of the best‐in‐class supplier service package is accurately selected.

Details

Benchmarking: An International Journal, vol. 14 no. 3
Type: Research Article
ISSN: 1463-5771

Keywords

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Publication date: 31 May 2016

Chunyan Yu

This chapter provides a survey of alternative methodologies for measuring and comparing productivity and efficiency of airlines, and reviews representative empirical…

Abstract

This chapter provides a survey of alternative methodologies for measuring and comparing productivity and efficiency of airlines, and reviews representative empirical studies. The survey shows the apparent shift from index procedures and traditional OLS estimation of production and cost functions to stochastic frontier methods and Data Envelopment Analysis (DEA) methods over the past three decades. Most of the airline productivity and efficiency studies over the last decade adopt some variant of DEA methods. Researchers in the 1980s and 1990s were mostly interested in the effects of deregulation and liberalization on airline productivity and efficiency as well as the effects of ownership and governance structure. Since the 2000s, however, studies tend to focus on how business models and management strategies affect the performance of airlines. Environmental efficiency now becomes an important area of airline productivity and efficiency studies, focusing on CO2 emission as a negative or undesirable output. Despite the fact that quality of service is an important aspect of airline business, limited attempts have been made to incorporate quality of service in productivity and efficiency analysis.

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