Airline Research Articles

Airline industry equities under external uncertainty shocks

We gauge the impact of news and other relevant external uncertainties facing airline firms via an equity market lens. Using local projections, we establish that rising investors’ fear shocks have long-lasting negative effects on airline industry equity returns, while increasing geopolitical, climate policy, and fuel cost uncertainties have comparatively short-lived impacts. Our results are robust to several alternative model specifications, including a pre-pandemic subsample. Based on our findings, we provide a promising avenue for future research in airline financial management.

Speed, Safety, and Comfort: The Origins of Delta Air Lines by James John Hoogerwerf (review)

Speed, Safety, and Comfort: The Origins of Delta Air Lines by James John Hoogerwerf (review)

Sky-High Style: An Overview and Research Agenda on Aesthetic Labour in the Airline Industry from a Gender Perspective

Sky-High Style: An Overview and Research Agenda on Aesthetic Labour in the Airline Industry from a Gender Perspective

Financial Impact on Aviation Industry Before and During Covid-19: Passenger Demand as Moderator

This study analyses the impact of the pandemic on the financial performance of airlines, with a specific focus on financial ratios. The travel limitations imposed as a result of the pandemic, coupled with a significant decline in passenger demand, resulted in significant financial losses. This study investigates how passenger demand moderates the relationship between financial ratios and the performance of the aviation industry. This study gathered data from 20 premier Asian airline companies, as acknowledged by Skytrax. The data was collected from 2016 to 2022, with the timeframe from 2016 to 2019 designated as the 'pre-Covid19' period, and the timeframe from 2020 to 2022 designated as the 'during Covid19' period. The study uses static panel data analysis to accomplish its objective by integrating cross-sectional and time series analysis. Based on this analysis, it was determined that the company's financial condition had a substantial impact on its performance and operating worth before the COVID-19 outbreak. This influence was observed across all variables, except TATO (Total Assets Turnover). However, the company’s financial condition does not affect its performance during the COVID-19 outbreak. This is due to the implementation of government initiatives and bailouts offered some respite, while also underscoring pre-existing structural weaknesses within the business. The results emphasize the crucial requirement for airlines to implement adaptable financial strategies and strong risk management techniques to successfully navigate future disruptions. Hence, the aviation sector should embrace a comprehensive strategy centered on minimizing expenses, expanding income sources, and implementing digitalization.

A privacy-preserving federated learning approach for airline upgrade optimization

PurposeA key issue of making upgrade decisions is to match the most relevant upgrade offers to the right customers at the right time. To optimize upgrade strategies and profitability, companies seek to break “data silos” between themselves and other business partners for a more holistic view of customers' consumption experiences. However, multi-source data fusion may lead to potential privacy leakage. To overcome these two challenges in data silos and privacy protection, this study introduced a privacy-preserving federated learning (FL) approach and explained the process of using FL in modeling airline passengers’ willingness to pay for upgrade offers. Design/methodology/approachFederated learning is a new confidential computing technique that allows companies to train a model cooperatively by exchanging model parameters instead of the actual raw data, which might include customers' privacy sensitive information. Using a case study of a Chinese airline company, this study demonstrated how FL-based upgrade models using multi-source data can be developed to improve the accuracy of predicting customers' willingness to pay for upgrades while preserving customers’ personal data privacy. FindingsComparing with traditional unilateral model using single-source data, the federated logistic regression and SecureBoost models demonstrate better model performance. This indicates that the proposed FL approach can enhance the accuracy of modeling airline passengers' willingness to pay for upgrade offers while preserving passengers’ data privacy. The findings also show that the FL-based models generally took longer running time than the traditional unilateral model due to the design of FL approach in ensuring data privacy. OriginalityThis study contributes to the literature of upgrade optimization by introducing the new FL approach for developing machining learning models to predict customers’ reaction to upgrade offers. Although we focus on the airline industry in our case study, the proposed FL approach can be applied to other industries with a similar issue of upgrade optimization such as hotels or cruise lines, and car rental.

The Interaction of Global Economy Mobility on the Financial Performance of Flagged Airlines

This study examines the impact of global economic mobility and domestic production on revenue and EBITDA, which are income statement performance indicators of flagged carrier’s airline companies. The research question is whether the global economic trade mobility and domestic production will lead to an effect in the number of individuals traveling, and thus eventually affect the revenue and profitability performance of airline companies. There are studies in the literature that have selected macroeconomic indicators as affecting travel volume and financials. In this study, trade openness and direct investments represent the global economy's mobility. Short-term interest rates, oil prices and exchange rates are included in the model as a control variable. The results of the panel model indicate that trade openness have a positive effect on firms' revenues. Airline companies should develop their financial forecasts by monitoring the macroeconomic indicators that have shown significant results from empirical analysis.

Workplace Romance: A Research on Flight Attendants in Aviation Industry

The aim of this research is to examine different aspects of workplace romance experienced by flight attendants in the aviation industry. Qualitative research method was used to examine the research subject in depth. The research was guided by using the phenomenology design, which is one of the qualitative research designs. The sample of the research was determined according to purposeful sampling and saturation point methods. In this context, the sample of the research consists of 11 flight attendants working in different airline companies in Turkey. Online interview method was used as a data collection tool. The data obtained was subjected to content analysis using MAXQDA 24 qualitative data analysis program with an inductive and descriptive approach. As a result of the content analysis, the research findings were collected under five themes. These themes include: factors affecting workplace romance, factors obstructing workplace romance, types of romantic relationships at workplace, results of workplace romance and management of workplace romance. According to the findings, the reasons why male and female employees have romantic relationships at work differ; It has been observed that different romantic relationships emerge depending on the position of the partners and the reasons for the relationship, and that workplace romance have positive and negative results individually/organizationally. It is thought that the research results will contribute to the literature on the concept of workplace romance and organizational behavior in the aviation industry.

The Alchemy of Leadership: Crafting a Symphony of Workplace Happiness

In today’s fast-evolving business world, workplace happiness is no longer seen as a mere bonus—it’s recognized as a cornerstone of success. Companies are beginning to understand that happy employees aren’t just more productive; they are more creative, engaged, and loyal. Central to this realization is the role that leadership plays. Leaders are not just tasked with driving results, but also with fostering a culture where happiness is prioritized as much as performance. This paper explores the profound connection between leadership and workplace happiness. It dives deep into how different leadership styles can either nurture or hinder employee well-being. By examining real-world examples from organizations like Google, Zappos, Patagonia, and Southwest Airlines—companies renowned for their positive work cultures—we can see how the right kind of leadership can create environments where happiness flourishes. These companies show us that when leaders truly value the happiness of their teams, the result isn’t just happier employees; teams are more engaged, innovative, and ultimately, more successful. The discussion doesn’t stop at the surface-level practices of these companies. It goes further to highlight the importance of emotional intelligence in leadership. Leaders who are emotionally aware and empathetic are better equipped to understand their employees' needs and create a supportive, positive atmosphere. This emotional intelligence is a critical ingredient in building a workplace where happiness isn’t just a goal but a driving force for both personal and organizational growth. Ultimately, this paper underscores that leadership and workplace happiness are deeply intertwined. When leaders create a space where people feel valued and fulfilled, it improves individual well-being and drives the entire organization toward greater success.

Incumbents’ marketing deterrence strategies and potential entrants’ time-to-entry: evidence from the US airline industry

Purpose The purpose of this study is to investigate how incumbent firms’ marketing deterrence strategies, price-cuts and quality improvement, influence potential entrants’ (PEs) entry timing into incumbents’ markets and examine the moderating role of incumbents’ market-level resources and capabilities (R&Cs). Design/methodology/approach To test the hypotheses, an accelerated failure time model is applied to a rich data set of entry threats between 1997 and 2019 in the US airline industry. Findings The findings show that while quality improvements delay PEs’ entry, price-cuts expedite it. Furthermore, PEs are more likely to be deterred by price-cuts when incumbents possess high market-level R&Cs. However, such R&Cs do not moderate the link between incumbents’ quality improvement and PEs’ entry timing. Research limitations/implications Market entry in this research is conceptualized and defined as a large resource deployment into a market and operationalized as a binary variable. However, PEs might rather choose a minor resource deployment instead to establish a foothold in new markets. It would be fruitful for future research to examine various levels of participation in a new market and examine how the incumbents’ marketing deterrence strategies affect PEs’ entry timing. Doing so would provide us with a deeper understanding of the difference between actual/full market entry and micro/minor market entry. Practical implications This research examines the impact of incumbents’ marketing deterrence strategies in a contingency framework and highlights the crucial role of R&Cs in implementing such deterrence strategies. Doing so provides actionable insights to managers who craft strategies to protect their markets against PEs. Originality/value Previous research illustrates that incumbent firms commonly respond to competitors’ entry threats by cutting prices and improving quality. While antecedents of these deterrence strategies have been extensively investigated, the consequences have yet to be empirically examined.

Persistent and transient inefficiencies in the U.S. airline industry

The competitive advantage of airlines depends on their technical efficiency. Efficiency analysis models now differentiate between persistent and transient inefficiencies. Persistent inefficiencies stem from fundamental flaws in production processes or ongoing managerial shortcomings, requiring long-term strategic interventions. Transient inefficiencies, however, result from irregular setbacks that can be swiftly addressed, causing temporary efficiency dips. Focusing on the decade from 2010 to 2019, we investigated how business models, mergers, and upgauging influence these inefficiencies. Our results reveal that 21.2% of the overall technical inefficiency can be accounted for by persistent inefficiency. Despite the U.S. airline industry improving transient inefficiency during the sample period, prevailing persistent inefficiency hindered any significant rise in overall efficiency. The research shows that full-service airlines (FSA) and low-cost carriers (LCC) often exhibit higher persistent and transient efficiency than ultra-low-cost carriers (ULCC). However, there seem to be no significant differences in transient and persistent inefficiency between FSA and LCC. Additionally, the results suggest that the upgauging and higher ramp-to-ramp hours may lead to higher transient efficiency. Finally, we could not find any influence of mergers and stage length on transient inefficiency.

A Comparative Analysis of Leadership Styles on Organizational Performance in the Airline Industry

Background The 21st century has witnessed several changes in the airline industry, owing to many factors, including the leadership styles adopted. Recently, there have been many successful and unsuccessful airlines (Zhang, 2017) attributed to different leadership styles that have significantly impacted organizational performance in the airline industry (Kamisan and King, 2013). This is because of its impact on employees' satisfaction (Asrar-ul-Haqa and Kuchinkeb, 2016) and the organization's ability to outperform others within the industry (Anderson and Birrer, 2011). However, Madanchain et al. (2016) argued that for organizations to remain viable through compelling performances, employee satisfaction, competitive advantage, and the role of leadership remains critical. As a result, Nanjundeswaraswamy and Swamy (2014) lamented the need for further studies to understand how leadership influenced organizational performance in the airline industry. As such, this study embarked on a study to underpin leadership's impact on organizational performance using Southwest and Malaysia Airlines and to recommend the best leadership style for airlines. D. Rationale This research was undertaken with three rationales. Firstly, the literature on the importance of leadership on organizational performances in the airline industry should be enhanced, focusing on Southwest and Malaysia Airlines models. Secondly, the study will identify and link the effects of transactional and transformational leadership styles on organizational performance using the two airlines. Finally, it will recommend the best leadership style for airlines based on the research conducted on the two aforementioned internationally recognized airlines.

A novel approach to measure perceived customer centricity in the passenger airline industry: Index development and validation

This study addresses a significant gap in current research by developing and validating a comprehensive index for measuring perceived customer centricity in the passenger airline industry. The index was derived using a rigorous scale development methodology based on three surveys with a total of 963 participants. The process involved construct definition, item generation, and item validation through exploratory and confirmatory factor analyses. The final measurement index comprises 19 items across four dimensions (Customer Care & Experience, Communication & Product, Sustainability, and Value) and demonstrates strong discriminant and convergent validity, providing a reliable tool for assessing customer perceptions. Therefore, this research introduces the first validated measure of perceived customer centricity specifically designed for the airline industry and offers practical insights for airline managers, enabling them to identify specific areas where customer perceptions fall short and to make targeted improvements. Additionally, the index serves as an alternative to the industry-wide adopted Net Promoter Score (NPS). It extends current literature by providing an industry-specific scale and offers a practical instrument for enhancing customer-centric strategies in real-world applications, thereby fostering long-term, mutually beneficial relationships. Additionally, it provides empirical evidence of the multidimensional nature of customer centricity and offers a validated tool that can be applied in future research to explore customer perceptions and their impact on airline performance, thus satisfying both practical and academic needs.

International legal mechanisms for ensuring the responsibility of the air carrier before the passenger

Liability to passengers and cargo owners for damage caused during international air transportation is primarily borne by the carrier. From the content of the Warsaw and Montreal Conventions, it follows that the carrier can be any natural or legal person who has concluded a contract of carriage with the passenger or the consignor of the cargo and carries out this carriage on a remuneration basis. Reasons are required for the carrier to be liable as a party performing the contract. The plaintiff, who demands compensation, must prove the fact of breach of obligation by his counterparty, the presence and amount of damage, as well as the cause-and- effect relationship between the offense and the damage. However, the defendant (carrier) has the right to prove the absence of his fault and refer to the limitation of his liability. The Warsaw (1929) and Montreal (2009) conventions contain relatively detailed and fairly clear instructions on the carrier’s liability, establishing the grounds for exemption from it and, in most cases, limiting its size by the so-called relaxations in the air carrier’s liability regime. Like the norms of the internal transport legislation of the states, the norms of the conventions are of an imperative nature, with equal protection of the interests of consumers of services provided by transport organizations, and even the complexity of transport operation technologies, the mass of operations and the risks associated with the use of vehicles. This article examines the question of the extent to which international conventions and rules determining the liability of air carrier passengers have been successfully harmonized at the international level and eliminated the conflict of law problem, as well as the degree of development and effectiveness of these international conventions and rules, norms for ensuring the liability of air carriers to air passengers. Summarizing, the author notes that the Montreal Convention improves the situation of passengers and cargo owners, eliminates complications with lengthy court processes, to the advantage of the Warsaw Convention, which is somewhat outdated and does not correspond to today’s realities. The new convention strengthens competition in the air transport market, increases the responsibility of airlines to passengers and removes restrictions on compensation for loss of baggage or damage to the life and health of passengers, significantly simplifying the mechanism of obtaining it.

An Assessment of an Airline Company within the Scope of Circular Economy Based Waste Management

The rapid growth in the aviation sector has prompted the industry to act and develop new and sustainable business models due to the greenhouse gases and waste generated inherently by the sector. In this context, this study provides an assessment of identifiable areas and determinants of circular economy in an airline company, considering its environmental impacts. As a result of the assessment, it has been observed that the airline company conducts initiatives in reduction, reuse, and recycling, along with the management of cabin materials and waste segregation. Action plans are in place regarding the reduction, substitution, or elimination of single-use plastics in material selection. In order to mitigate both the environmental and economic impacts of paper consumption, the company is undertaking digitalization efforts within its business processes. The weight of aircraft is a crucial factor in the amount of fuel consumed and the quantity of CO2 emissions released. Therefore, airlines prefer to use lightweight materials inside the aircraft to reduce weight. Plastic catering materials are among these lightweight options. Unfortunately, due to the adverse environmental impacts of plastics, reducing their usage and, if possible, phasing them out are essential measures that airlines need to take. Consequently, the airline company under this study has removed the plastic outer packaging of the packaged materials used in the cabin. Furthermore, it continues its efforts to remove plastic materials used during catering services or replace them with biodegradable alternatives.

Using PLS-SEM and XAI for causal-predictive services marketing research

Purpose This study aims to redefine approaches to metrics in service marketing by examining the utility of partial least squares – structural equation modeling (PLS-SEM) and eXplainable Artificial Intelligence (XAI) for assessing service quality, with a focus on the airline industry. Design/methodology/approach Using the Airline Passenger Satisfaction data set from Kaggle platform, this study applies PLS-SEM, facilitated by ADANCO software and XAI techniques, specifically using the SHapley Additive exPlanations TreeExplainer model. This study tests several hypotheses to validate the effectiveness of these methodological tools in identifying key determinants of service quality. Findings PLS-SEM analysis categorizes key variables into Delay, Airport Service and In-flight Service, whereas XAI techniques rank these variables based on their impact on service quality. This dual-framework provides businesses a detailed analytical approach customized to specific research needs. Research limitations/implications This study is constrained by the use of a single data set focused on the airline industry, which may limit generalizability. Future research should apply these methodologies across various sectors to enhance a broader applicability. Practical implications The analytical framework offered here equips businesses with the robust tools for a more rigorous and nuanced evaluation of service quality metrics, supporting informed strategic decision-making. Social implications By applying advanced analytics to refine service metrics, businesses can better meet and exceed customer expectations, ultimately elevating the societal standard of service delivery. Originality/value This study contributes to the ongoing discourse on artificial intelligence interpretability in business analytics, presenting an innovative methodological guide for applying PLS-SEM and/or XAI in service marketing research. This approach delivers actionable insights, not only in the airline sector but also across diverse business domains seeking to optimize service quality.

Features and prospects of the Russian civil aircraft industry development under sanctions pressure from Western countries

The specifics and prospects of development of the Russian civil aircraft industry under sanctions pressure from Western countries have been considered. The study analyzes secondary data from open sources. The main provisions and conclusions of the work are as follows. The United States of America and its European satellites have imposed comprehensive sanctions against Russian air carriers, including a ban on aircraft deliveries. Lessors who owned foreign airplanes made demands for their return, and foreign registrars suspended airworthiness certificates for domestic airplanes. Western sanctions against Russian airlines have caused significant damage to Russia, but have also become a serious stimulus for the domestic aviation industry development. Significant time and investment will be required to resolve the problems encountered. Russia has the necessary potential to restore the aviation industry and ensure safe passenger and cargo transportation in the required volume. The country is currently working systematically to revitalize the industry, implementing advanced developments and establishing serial production of a wide range of civil aircraft. The success of the domestic aviation industry development depends mainly on the state’s efforts, as it has the access to almost all production and design capacities. In addition, effective measures are needed to influence the air transportation industry in order to balance the supply and demand for aircraft.

Creating airlines’ innovation: linking employees’ perspective of service quality, intellectual capital and innovation performance

ABSTRACT This study investigates various dimensions, including service quality, absorptive capacity, innovation performance, and intellectual capital (specifically organisational capital, social capital, and human capital), within the context of the airline industry. A survey questionnaire was administered to airline employees during the COVID-19 pandemic. The findings indicate that service quality has the potential to generate favourable innovation outcomes, such as increased absorptive capacity, thereby further enhancing employee innovation performance. Service quality is also found to have a simultaneous positive impact on human capital, leading to increased innovation performance and absorptive capacity. Therefore, organisations should prioritise the development of absorptive capacity to enhance both human capital and the accumulation of intellectual capital. Furthermore, both organisational capital and human capital play a vital role in these intricate strategy decision procedures. These factors play a crucial role in strengthening the connections between service quality and innovation performance.

Service quality and repurchase intentions in the airline industry: a multiple mediation analysis through customer citizenship behaviour

ABSTRACT Building on expectation confirmation theory (ECT), this study examines the nexus between service quality and consumer repurchase intention in the airline industry, with a particular emphasis on the mediating role of customer citizenship behaviour (CCB). Utilising data from 260 respondents in the United Kingdom, the research employs partial least squares structural equation modelling (PLS-SEM) for the analysis. The findings indicate that service quality has a direct positive effect on CCB and repurchase intention. The study indicates that CCB, manifested through advocacy and tolerance, exerts a significant positive impact on consumer repurchase intention. The study uncovers that advocacy and tolerance behaviours serve as mediators in the relationship between service quality and repurchase intention, while feedback and helping do not play this role. The findings of the study contribute to the literature in the field of CCB and service quality in the airline industry.

Understanding military pilots’ fuel-saving intentions for supporting logistics missions

Military pilots can play important roles in saving aviation fuel by operating aircraft in an environmentally sustainable manner. Based on the theory of planned behavior (TPB), this study investigates the factors associated with cargo pilots’ fuel-saving intentions during logistics missions. We collected 108 survey responses, including 62 from the United States Air Force (USAF) and 46 from the Republic of Korea Air Force (ROKAF). Confirmatory factor analysis (CFA) and structural equation modeling (SEM) using the survey data show partial support for the relationships between three antecedents (attitude, subjective norms, and perceived behavioral control) and behavioral intention. Contrary to existing studies involving TPB, which are mostly about personal choices with some degree of freedom, the results suggest that the impact of subjective norms is greater than that of attitude in this study context, which can be explained by the rigid military culture and strict air traffic control including specific routes, altitudes, and speeds mandated by Air Combat Command. The theoretical and practical contributions of this study provide insights into how subjective norms influence intentions across different contexts, extending the applicability of TPB to industries with rigid organizational cultures and tight operational controls, such as the airline industry.

Evaluating the impact of multiple uncertainty shocks on China's airline stocks volatility: A novel joint quantile perspective

This study proposes a new joint quantile impulse response function (jQIRF) and applies that function to investigate the impact of multiple uncertainty shocks on the volatility of China's airline industry. The jQIRF not only allows one to examine the joint impact of multiple factors on the target variable; the impact of these factors on specific quantiles or states of the target variable can also be examined. The empirical results show that, compared to traditional IRF, the proposed jQIRF successfully reveals the positive impact of multiple uncertainties on the volatility of the airline industry and obtains a narrower confidence interval for IRF. The jQIRF also successfully corrects the overestimation bias caused by simple aggregation in generalized IRF. In addition, empirical results at different quantiles show the existence of a “leverage effect” in the impact of uncertainty on airline volatility. This means that, in more volatile market environments, the positive joint impact of uncertainties is stronger. However, research that has focused on individual airline stocks indicates that the airlines appear to be capable of implementing measures to stabilize stock volatility, thereby mitigating the negative impact of uncertainties on the airline industry. Overall, the proposed jQIRF and empirical conclusions in this paper help to more accurately assess the impact of multiple factors on the airline industry from a joint perspective. This ability is beneficial for both policymakers and investors.