Airline Research Articles

Aircraft type selection using fuzzy trigonometric based OPA and RAFSI model

The availability of numerous types of aircraft and their technical capabilities are offering a wide range of alternatives. As customers have different expectations, aircraft type selection is a business strategy for the airline companies. The choice on carriers should be made in accordance with disparate dimensions such as customers' expectations, profit of the company, capacity limitations and market conditions. This study formulates aircraft type selection as a Multi Criteria Decision Making (MCDM) problem and proposes a novel model that incorporates fuzzy trigonometric norms to solve. Being differentiated from the existing models in the literature, a two-stage model is identified. In the first stage, a fuzzy trigonometric-based Ordinal Priority Approach (OPA) determines the criteria weights. In the second stage, RAFSI (Ranking of Alternatives through Functional Mapping of Criteria Subintervals into Single Intervals) is integrated to determine the optimal aircraft type. The model simulated for a case of Turkish Airline company. Sensitivity tests justify robustness of the model. Results show that among the four options, medium-scale high-qualified but not luxury aircraft is the best option.

Empirical Analysis of Fleet Commonality Strategy’s Impact on the Operating Performance of the Indian Aviation Sector

Fleet commonality and standardization strategies are recognized in the global airline industry for their operational advantages and potential to ensure sustainability in a highly competitive environment. This study focuses on the Indian airline sector, aiming to verify the pivotal role of cost efficiency, revenue management, fleet size, and characteristics in determining airline profitability, as well as the influence of fleet size and standardization on operating costs. To achieve this, we developed an empirical model to evaluate both operating profitability and cost efficiency provided by fleet commonality. To measure fleet commonality, we employed a fleet standardization index, providing a quantitative assessment of the level of fleet commonality across different airlines. Utilizing real-time data collected extensively from the Directorate General of Civil Aviation (DGCA) in India, we conducted a detailed analysis involving eight prominent airlines for 10 years spanning from 2012 to 2022. Our regression models indicate a strong positive association between fleet commonality and operating performance, underscoring the significance of fleet standardization strategies in enhancing airline profitability. This study not only contributes empirical evidence to the existing literature but also provides valuable insights for airline managers seeking to understand the benefits of fleet commonality in the context of the Indian aviation industry. This research is anticipated to aid airline executives in making informed decisions about fleet management strategies to improve their operational and financial performance in an increasingly competitive market.

Measurement validation of a consumer-driven environmental, social, and governance (ESG) index for the airline industry

While recent research on environmental, social, and governance (ESG) factors emphasizes their relevance for corporate financial benefits, a gap remains in understanding how consumers’ perceptions of ESG practices impact their responses toward airlines. This study investigates the influence of perceived airline ESG practices on consumers’ behavioral intentions by exploring the mediating roles of brand image, attachment, and attitude. Initially, a consumer-driven ESG measurement tailored to the airline sector was developed. Subsequently, an online survey involving 567 South Korean consumers was conducted to validate the effects of ESG perception on consumer responses. Data analysis through partial least-squares structural equation modeling revealed notable insights. The study underscores the significance of the “governance” dimension within ESG constructs, demonstrating its pivotal role in enhancing airline brand image, attachment, and attitude—factors that collectively influence consumers’ behavioral intentions. This research contributes novel perspectives from consumers, shedding light on the distinct importance of various ESG dimensions and providing a nuanced understanding of the factors shaping consumer perceptions of ESG initiatives. Overall, given the central role of airlines in the tourism sector and the imperative of understanding consumer perceptions of ESG practices, this study offers a comprehensive theoretical framework to elucidate consumer behavior. The findings deliver valuable insights and practical guidance for professionals in the airline industry.

CONSEQUENCES OF COVID-19 ON AVIATION INDUSTRY: A MENACE TO GLOBAL AIRLINES

The aviation industry has been considered one of the major contributors to the economy of nations for several decades. As a sub-sector of the aviation industry, airlines are considered the fastest mode of transportation for passengers and cargo across the globe. Since its invention, airlines have served millions of people to move from one country to another as well as within the country. Despite natural calamities and global war affairs, the airline industry has achieved immense growth in recent decades. In addition to the progress of airlines, coronavirus disease 2019 (COVID-19) has become a major hindrance to providing services to people around the world. Due to the rapid spread of deadly diseases, several airline firms have halted their air travel services in many parts of the world. As lockdowns and travel restrictions were enforced, this article examines the crisis of the airline industry after the onset of the COVID-19 pandemic.

Exploratory Study of Sustainability Practices in Worldwide Major Aircraft Maintenance, Repair, and Overhaul Companies

While sustainable aviation research has primarily focused on the airline industry, aircraft manufacturing, and airport responsibilities, the aircraft maintenance, repair, and overhaul (MRO) industry’s contribution to achieving sustainable aviation goals has been overlooked. This study examines the approaches to corporate sustainability practices used by aircraft MRO companies worldwide. The methodology used to investigate the sustainability actions of major MRO companies globally was mainly based on observational data gathered from multiple data sources, such as environmental, social, and governance (ESG) and investor relations documents. Four companies out of the 13 major MRO companies whose sustainability reports were found are examined as a case study analysis. Each MRO company adopted different definitions and practices of sustainability. The findings show that the aircraft MRO sustainability definition varies among the major companies studied, but some commonalities can be used to develop a proposed definition. The authors propose that aircraft MRO sustainability be defined as the ability to conduct MRO business that positively affects all stakeholders while emphasizing safety, quality, and integrity values, using technology and innovation to make growth, and constantly stabilizing and/or diminishing the impact on the environment. This study contributes to the understanding of sustainable aviation by highlighting the role of MRO companies in achieving sustainable goals.

How do airlines cut fuel usage, reducing their carbon emissions?

Airline fuel consumption is costly for the firms and for society as well due to a climate-change externality. We study how fuel-price changes affect cost-minimizing choices by airlines that have implications for the extent of this externality. The airline industry’s capital stock can be easily inventoried as a set of long-lived, durable aircraft. This portfolio approach allows us to study the utilization and composition of the capital stock at a highly disaggregated level. Changes in airline operations directed toward conserving fuel can be an important path toward lower emissions.

Multi-scale systematization of damage and failure modes of composite cryogenic hydrogen vessels according to the Fault Tree method

Achieving a safe and lightweight design of composite liquid hydrogen (LH2) vessels without much empirical data requires advanced reliability assessment. An approach based on the Fault Tree method is proposed, to allow the systematization and modelling of functional and structural failure modes and their interactions. A hierarchical system model spanning across the length scales of the LH2 vessel down to the composite material is established. Subsequently, the failure probability of the composite material is estimated in dependence on temperature and load case using Weibull analysis. Using the accident data of US Air Carriers operating under 14 CFR 121 between 2012 and 2019, the probabilities of the load cases are derived, allowing a quantitative reliability analysis of the selected failure modes. Requirements for material and system design are derived in dependence of the maximum allowable failure probability.

Losing altitude: The impact of new leasing standards on the liquidity, leverage, profitability and valuation of U.S. and European airlines

The global airline industry represents fertile ground for research due to its susceptibility to extraneous demand shocks such as fuel price hikes, terrorist attacks, and global pandemics coupled with high leverage and high reliance on leasing. Accounting Standards Codification (ASC) 842 Leases and International Financial Reporting Standard (IFRS) 16 Leases became effective January 1st, 2019 for publicly-traded firms in the U.S. and overseas, requiring capitalization of the majority of leased assets. This study was motivated by how the acts may have affected reported airline liquidity, leverage, profitability and stock price, and if any evidence existed of lease restructure attempts in order to avoid capitalization; which may provide initial impacts. Using a sample of publicly-traded airlines incorporated in the U.S. and Europe, the current study used firm year-level filings from 2017 to 2019 to determine if passage of the acts were associated with changes in liquidity, leverage, profitability and stock price. One-way analysis of variance (ANOVA) and independent samples t-test parametric statistical testing was employed to determine any statistically significant change in the means of selected ratios operationalizing liquidity, leverage, profitability and firm valuation. The results indicated no significance for any of the variables operationalizing the latent constructs providing evidence contrary to previous predictions, and a significant difference between the two regions, worthy of further study. These findings are significant due to the vast financial reporting implications associated with these acts and their potential to skew financial ratios, juxtaposed against the ever-present threat of extraneous demand shocks which permeate this industry. The research also suggests management may have attempted lease restructures to circumvent the capitalization requirements of the act and warrants further research to investigate the generalizability of these findings to other industries.

THE INFLUENCE OF CAPITAL STRUCTURE, ASSET GROWTH AND PROFITABILITY ON STOCK PRICES IN THE TRANSPORTATION SECTOR OF AIRLINES REGISTERED ON THE IDX, 2018-2022

This research was conducted with the aim of finding out and analyzing the influence of Capital Structure, Asset Growth and Profitability on Share Prices in the Airline Transportation Sector listed on the IDX in 2018-2022. This research is quantitative research that is associative in nature. The population in this study are companies operating in airline transportation in 2018-2022. Sampling was carried out using techniques of non probability sampling or a saturated sample, namely using all sample airline companies. The data technique used in this research is Multiple Linear Regression Panel Data using Eviews 10 software. The results of this research show that partially Capital Structure (DAR) has no effect and is not significant on stock prices, Asset Growth has no effect and is not significant on stock prices, and Profitability (ROA) has a positive and significant effect on stock prices.

A Machine Learning Based Approach to Predict Customer Churn in Airline Industry : The Case of India

This research addresses the challenge of customer churn in the airline industry by leveraging machine learning (ML) techniques to predict and understand the factors influencing customer attrition. Drawing on a comprehensive dataset encompassing customer demographics, flight history, and service interactions, we employed rigorous data preprocessing techniques and evaluated various ML algorithms

Strategi Perusahaan Maskapai Penerbangan dalam Menghadapi Pandemi Covid-19: Pendekatan Akuntansi Manajemen

The Covid-19 pandemic has caused many companies to experience a decline in revenue and profits, including airline companies. PT Garuda Indonesia is one of the companies included in the tourism industry ecosystem which has also been affected by the Covid-19 pandemic. This research aims to investigate the strategies companies choose to face the Covid-19 pandemic. This research uses a qualitative method with a case study approach. The research results show that cost efficiency and product differentiation strategies are able to increase company revenues.

Tourists’ Willingness to Adopt AI in Hospitality—Assumption of Sustainability in Developing Countries

This study explores the impact of artificial intelligence (AI) on customer perceptions and behavior in restaurants, airline companies, and hotel sectors within the hospitality industry of Iran. The primary objective is to analyze how AI affects customer trust, brand engagement, electronic word-of-mouth (eWOM), and tourists’ readiness to use AI technologies. Using a comparative analysis approach and surveys, this research tests hypotheses about the effects of artificial intelligence on various dimensions of customer interaction. The findings highlight significant relationships between the quality of artificial intelligence and customer engagement metrics, such as trust and brand loyalty, which are crucial for understanding and predicting customer behavior in response to technological advancements. This study lays the groundwork for theoretical assumptions about sustainability in these sectors in developing countries, providing a basis for future empirical research that could validate these assumptions and explore broader implications of AI integration in enhancing sustainable practices within the hospitality industry.

Evaluation of agile attributes for low-cost carriers to achieve sustainable development using an integrated MCDM approach

PurposeSince conducting agile strategies provides sustainable passenger satisfaction and revenue by replacing applied policies with more profitable ones rapidly, the focus of this study is to evaluate agile attributes for managing low-cost carriers (LCCs) operations by means of resources and competences based on dynamic capabilities built on resource-based view (RBV) theory and to achieve sustainable competitive advantage in a volatile and dynamic air transport environment. LCCs in Turkey are also evaluated in this study since the competition among LCCs is high to gain market share and they can adapt quickly to all kinds of circumstances.Design/methodology/approachTwo well-known Multi-Criteria Decision-Making Methods (MCDM) named as the Stepwise Weight Assessment Ratio Analysis (SWARA) and multi-attributive border approximation area comparison (MABAC) methods by employing Picture fuzzy sets (PiFS) are employed to determine weight of agile attributes and superiority of LCCs based on agile attributes in the market, respectively. To check the consistency and robustness of the results for the proposed approach, comparative and sensitivity analysis are performed at the end of the study.FindingsWhile the ranking orders of agile attributes are Strategic Responsiveness (AG1), Financial Management (AG4), Quality (AG2), Digital integration (AG3) and Reliability (AG5), respectively, LCC2 is selected as the best agile airline company in Turkey with respect to agile attributes. SWARA and MABAC method based on PiFS is appropriate and effective method to evaluate agile attributes that has important reference value for the airline companies in aviation industry.Practical implicationsThe findings of this study will support managers in the airline industry to conduct airline operations more flexibly and effectively to take sustainable competitive advantage in unexpected and dynamic environment.Originality/valueTo the author' best knowledge, this study is the first developed to identify the attributes necessary to increase agility in LCCs. Thus, as a systematic tool, a framework is developed for the implementation of agile attributes to achieve sustainable competitive advantage in the airline industry and presented a roadmap for airline managers to deal with crises and challenging situations by satisfying customer and increasing competitiveness.

Theoretical aspects of strategic development subjects of the air transport industry

The methodological principles of studying systemic, strategic interactions of subjects in the air transport industry in conditions of global challenges are not just considered but emphasized for their crucial role in understanding and navigating the complexities of the industry. Peculiarities of the interaction between airlines and airports are determined, which is related to the specifics of the organizational and management support of this process, which include instability and dynamism of the air transportation market, significant degree of differentiation of air transport services by macro-regions; high level of competition between air carriers and significant market fluctuations; low competition among airports; multivariate combination and comprehensive use of the potential and competences of airlines and airports in the performance of passenger and cargo air transportation. The article substantiates the peculiarities of the interaction of the air transport industry entities related to the specifics of organizational and managerial support of this process. The functions, works, and services performed by the enterprises of the air transport industry in the interaction process and the functional division of the main activities by the responsibility of the performers - airlines and airports - are systematized. A methodical approach to the study of strategic interaction of air transport industry entities in the context of global challenges is proposed, consisting of a logical sequence of the following stages: analysis and evaluation of functional characteristics and competencies of airlines and airports; analysis of environmental factors; assessment of problems and advantages of strategic interaction of airlines and airports; substantiation of strategic principles of interaction between airlines and airports; study of strategic alternatives and decision-making. The advantage of the proposed approach is that it considers the specific features of organizational and managerial support for the interaction of industry players. The most acute problems of the strategic development of the air transport industry of Ukraine and promising areas of interaction between air carriers and airports in the context of global challenges are not just identified but highlighted to keep the audience informed and aware of the current state of the industry. Keywords: air transport industry, air carriers, airports, airlines, strategy, a system of interaction, systemic, strategic interaction, strategic development, global challenges.

Subnetwork prediction approach for aircraft schedule recovery

The combinatorial optimization techniques for the aircraft schedule recovery problem are too expensive to compute. However, we require a reasonable solution within 1–2 min for real-time application. The computational time of traditional optimization algorithms will drastically reduce if we can accurately predict the subnetwork affected by the disruption. In this study, we advocate the use of machine learning (ML) as a promising tool to predict the subnetwork. The optimal recovery schedules for a large number of disruptions are used for offline training, and subsequently, the trained ML model is employed to reduce the search space for new disruption cases substantially. To achieve this, we employ a unique feature space specifically designed to capture the essential characteristics of the problem. A notable contribution is constructing a novel feature space based on revised aircraft schedules designed to capture the essential characteristics of the problem. The recursive feature elimination technique is employed for optimal feature selection. Five machine learning classifiers: Logistic Regression, Random Forest, Extreme gradient boosting, Light gradient boosting, and Categorical Boosting are compared. The performance is evaluated on real data obtained from an airline company. Our study demonstrates that, with the subnetwork of aircraft predicted by the classifier, the computational time of the column generation approach is remarkably reduced without deteriorating the solution quality in all the disruption instances tested, with more than 98% of the instances being solved within 60 s. The results highlight the remarkable advantage of integrating ML in the pre-optimization phase.

Airline Market Risks and Management Discussion and Analysis (MD&A): A Thematic Study

This research endeavors to assess airline executive decision-making coping with critical crises during the pandemic by scrutinizing the Market Risks and Management Discussion and Analysis (MD&A) sections within the 10-K financial reports. This study delves into the quarterly financial reports (10-Q) of Delta Air Lines (DAL) spanning from the 1st quarter (Q1) of 2020 to the second quarter (Q2) of 2023 and discovered primary challenges and market risks that were of concern to top executives. To underscore the significance of top executives’ decision-making activities within a chosen airline, this research project explores significant discussions disclosed in the financial reports. The findings show “revenue”, “cost”, and “fleet” were three most discussed topics while “liquidity, asset, and payable accounts”, “failing cost-saving strategies and poor Return on Investment (ROI)”, “policy changes in ticket cancellation and frequent flyer program”, “failing new technology”, and “proprietary data security” emerged as the top five market risks during the COVID-19 pandemic. Executives responded to these challenges by implementing corresponding strategies aimed at ensuring sustainability, such as labor downsizing, reforms to retirement plans, flight frequency reduction, simplification of aging fleets, cancellation of aircraft orders, cost-reduction initiatives, and adjustments to routes and hubs, among other measures. Noticeably, frequent flyer loyalty program remained lucrative.

Target setting for airlines: A DEA bargaining approach with network structure

AbstractThe objective of this study is to find out how airlines can reduce their inputs and provide appropriate passenger and cargo capacity, thereby increasing passenger and cargo traffic and reducing CO2 emissions. A network data envelopment analysis (DEA)–based Nash bargaining model is developed incorporating intermediate products and weakly disposable undesirable outputs and is applied to a dataset of 33 airline companies to obtain the bargaining solution. According to the results, airlines that are weak efficient or inefficient could establish their targets to attain efficiency through a fair and logical negotiation among the inputs, intermediate products, good outputs and bad output. Appropriate policies need to be implemented that would improve the airlines’ performance in terms of improvement in not only the efficiency of inputs and desirable outputs along with intermediate products but also with regard to environmental performance. This would ensure sustainable growth in airlines’ performance.

Assortment optimization: a systematic literature review

Assortment optimization is a core topic of demand management that finds application in a broad set of different areas including retail, airline, hotel, and transportation industries as well as in the healthcare sector. Hence, the interest in research on assortment optimization has grown rapidly in recent years. However, the sheer number of publications on the topic of assortment optimization makes it difficult to keep track of all available approaches proposed in the literature. In this paper, we systematically review state-of-the-art studies on assortment optimization. We assemble an extensive literature overview by strategically searching for pre-defined keywords within leading scientific databases. The resulting literature is grouped by a proposed taxonomy that captures properties related to the optimization problem itself, the modelled customer behaviour, and the solution concept applied for solving the problem at hand. For each group, we provide an overview of the corresponding literature and analyse it based on a proposed selection of key factors.

An Analysis of the Influence of Customer Participation in Airline Loyalty Programs: A Multi-Group Examination

Loyalty programs have long been seen as a critical factor in the success of many businesses. While there has been extensive research into the benefits, satisfaction, perceived functional value, and loyalty associated with LPs, few studies have sought to compare these results across different consumer groups. This study aims to examine how user involvement levels relate to airline loyalty programs. The survey collected 429 responses from individual members of airline loyalty programs, using multi-group analysis with Partial Least Squares Structural Equation Modeling. The findings indicate that satisfaction and perceived value mediate the relationship, while consumer involvement moderates it. A distinction was found between the two consumer groups regarding hedonic benefits, satisfaction, and loyalty. This research makes a valuable contribution to the airline industry by emphasizing the importance of loyalty program benefits and highlighting consumers' role in these programs. Furthermore, it offers practical insights for future research endeavors

Exploring the Dynamics of Airline Service Attribute Quality: Identifying Satisfiers and Dissatisfiers

This study seeks to explore the link between the attributes of airline service quality and overall satisfaction. While previous research has suggested a direct connection, this work proposes that attribute quality can have varying effects on satisfaction or dissatisfaction. The analysis involved consumer data from online reviews and aligns with Herzberg, Mausner, and Snyderman’s two-factor theory. It found that certain service attributes such as cleanliness, food and beverages, and in-flight entertainment impact positive ratings as satisfying factors. On the other hand, customer service and check-in/boarding affect negative ratings as dissatisfying factors. Additionally, the study also considered individual features and types of airline products to enhance understanding of these relationships within the airline industry marketplace.