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1 – 10 of over 12000Abstract
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.
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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.
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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.
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James Peoples, Muhammad Asraf Abdullah and NurulHuda Mohd Satar
Health risks associated with coronavirus disease 2019 (COVID-19) have severely affected the financial stability of airline companies globally. Recapturing financial stability…
Abstract
Health risks associated with coronavirus disease 2019 (COVID-19) have severely affected the financial stability of airline companies globally. Recapturing financial stability following this crisis depends heavily on these companies’ ability to attain efficient and productive operations. This study uses several empirical approaches to examine key factors contributing to carriers sustaining high productivity prior to, during and after a major recession. Findings suggest, regardless of economic conditions, that social distancing which requires airline companies in the Asia Pacific region to fly with a significant percentage of unfilled seats weakens the performance of those companies. Furthermore, efficient operations do not guarantee the avoidance of productivity declines, especially during a recession.
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Mahour Mellat Parast and Adegoke Oke
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…
Abstract
Purpose
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.
Design/methodology/approach
The authors test their hypotheses using panel data of the US domestic airline industry from 1998 to 2019.
Findings
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.
Originality/value
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.
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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.
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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…
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.
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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.
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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 capabilities…
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.
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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.
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