Airline Market Research Articles

The potential for the participation of Nigeria in global horticulture value chains

PurposeThe purpose of this paper is to explore the barriers inhibiting horticulture product export from Nigeria, particularly to the UK, and identify those requiring resolution if global horticulture value chains (GHVCs) are to contribute to economic growth in Nigeria.Design/methodology/approachA single-case (embedded) research design was adopted. In total, 26 participants from five stakeholder groups (namely, farmers, exporters, air freight forwarders, aviation operators and government institutions) were selected for investigation to examine the research problem.FindingsThe empirical investigation showed that: the existing institutional framework, infrastructure and logistics issues, market penetration issues, stakeholders’ incompetence, food safety and quality issues, high transaction costs, operational challenges of exporting, neglect of agriculture and the existing airline market structure are prominent barriers that require resolution if horticultural product exports are to increase.Research limitations/implicationsThe study focuses on the analysis of five key stakeholder groups upstream in the supply chain. Further investigation should include stakeholders downstream (importers, wholesalers and retailers).Originality/valueThe specific case study of horticultural product export from Nigeria offers empirically rich insights into the barriers hindering the participation of Nigeria in GHVCs.

Simulating Airline Behavior: Application for the Australian Domestic Market

This paper demonstrates the ability of a model, which simulates competition between airlines in a domestic aviation market, to accurately reproduce real-world behavior. The Australian market was chosen as a test case as it is a geographically isolated region with significant demand and complexity, including one of the busiest routes in the world, where connecting international passengers do not significantly skew the market. The model is based on an n-player noncooperative game, in which each airline represents a player within the game. The primary assumption is that each airline attempts to maximize profits by adjusting the decision variables of airfares, flight frequency, and choice of aircraft on routes within its network. The approach works iteratively, allowing each airline to respond to the decisions made by other airlines during each successive optimization. The model is said to reach convergence when there is no significant change in any airline’s profit from one iteration to the next. Once this occurs, the predictions of each airline’s decision variables can be compared with real data. The model gives highly detailed predictions of airline specific airfares, flight frequencies on segments, passenger flows, and airline market share, which strongly correlate with observed values.

Utility function for airline travel in Nepal and its comparison with India

The competition in the airline market provides an airline passenger with ample open choices to evaluate before finalising a travel decision. The final travel decision is an outcome of a consideration of multiple parameters. In the last decade, Nepal has witnessed impressive growth in international and domestic air traffic, which in turn has led to a growth in tourism in Nepal. It has, therefore, become crucial for competing airlines in Nepal to monitor their services and align the same with respect to airline passengers' preferences. We study the domestic airline travel in Nepal to create a utility function for it and compare the performance of one airline with other competing airlines. The model is based on the logarithmic goal programming model and multiple criteria decision-making. This development also provides a unique opportunity to compare utility functions for airline travel across India and Nepal, two neighbouring countries with different socio-economical setups.

Utility Function for Airline Travel in Nepal and Its Comparison with India

The competition in the airline market provides an airline passenger with ample open choices to evaluate before finalising a travel decision. The final travel decision is an outcome of a consideration of multiple parameters. In the last decade, Nepal has witnessed impressive growth in international and domestic air traffic, which in turn has led to a growth in tourism in Nepal. It has, therefore, become crucial for competing airlines in Nepal to monitor their services and align the same with respect to airline passengers' preferences. We study the domestic airline travel in Nepal to create a utility function for it and compare the performance of one airline with other competing airlines. The model is based on the logarithmic goal programming model and multiple criteria decision-making. This development also provides a unique opportunity to compare utility functions for airline travel across India and Nepal, two neighbouring countries with different socio-economical setups.

Perceptual maps of Turkish airline services for different periods using supervised machine learning approach and multidimensional scaling

In the airline market, it is crucial for airline industry to determine the experiences, expectations and perceptions of passengers in order to apply positioning strategies on brands. In this study, we used 15,864 Turkish tweets sent to the official airline Twitter pages based in Turkey between 1st June and 1st September 2017. Then, we applied aspect-based sentiment analysis (ABSA) with supervised machine learning approach to classify tweets into airline service categories and sentiment polarity. Lastly, multidimensional scaling (MDS) employed to build perceptual maps of airline services for different periods. This study aims to explore how tweets reflect airline service quality attributes in perceptual maps for selected periods in Turkey. Our analysis shows that the perceptual positions of services change per period, which means that Twitter users perceived each service differently in each period. In terms of the importance of airline service quality attributes website services, convenience of flight, and in-flight entertainment were the most critical disparities perceived by users compared to other attributes considering in the periods being examined.

Perceptual maps of Turkish airline services for different periods using supervised machine learning approach and multidimensional scaling

In the airline market, it is crucial for airline industry to determine the experiences, expectations and perceptions of passengers in order to apply positioning strategies on brands. In this study, we used 15,864 Turkish tweets sent to the official airline Twitter pages based in Turkey between 1st June and 1st September 2017. Then, we applied aspect-based sentiment analysis (ABSA) with supervised machine learning approach to classify tweets into airline service categories and sentiment polarity. Lastly, multidimensional scaling (MDS) employed to build perceptual maps of airline services for different periods. This study aims to explore how tweets reflect airline service quality attributes in perceptual maps for selected periods in Turkey. Our analysis shows that the perceptual positions of services change per period, which means that Twitter users perceived each service differently in each period. In terms of the importance of airline service quality attributes website services, convenience of flight, and in-flight entertainment were the most critical disparities perceived by users compared to other attributes considering in the periods being examined.

Frankfurt Airport’s Terminal 3 expansion

This paper analyses how Frankfurt Airport (FRA) is continuously evolving as one of Europe’s most important aviation hubs. Today, as in the past, FRA continues to meet the challenge of adapting its infrastructure to developments in the global aviation industry. The expansion of the airport — with the inauguration of the new Runway Northwest in 2011 and the current construction of Terminal 3 — is generating new capacity, which is vital due to strong growth in passenger traffic. Terminal 3 will make the airport competitive in the premium sector for future developments in international aviation. The first construction phase of Terminal 3 with piers H and J is planned to open by 2023. This first phase will feature separate levels for arrivals and departures, a marketplace, a food and beverage area and lounges. A new people-mover system and an expanded baggage handling system will ensure a rapid and smooth link with the existing Terminals 1 and 2 on the northern side of FRA — while also connecting the new terminal to the public transportation network. The plans for the new terminal were designed to be flexible from the outset and allow for speedy adaptation to market changes. In response to developments in the airline market and the special requirements of non-premium airlines, plans to build a third pier in the second construction phase of Terminal 3 have been moved forward and adapted to the changed requirements. This means that Pier G for non-premium traffic will be up and running as a fully functional building for handling passengers already in 2021, thus alleviating impending capacity constraints at Terminals 1 and 2. Later, the new non-premium pier will be fully integrated into the overall structure of Terminal 3 when the main terminal building and the two other piers are opened.

Evaluation of quality with risk assessment using Kano model and FMEA in Indonesia airline services

Competition in the airline industry has increased this triggers the development of low cost carrier. One airline that has felt the impact of this increased competition is the airline Garuda Indonesia, which previously controlled the airline market share in Indonesia before the emergence of low cost carrier. Garuda Indonesia airline as a market leader still need to improve their services because the satisfaction of some customers is not as high as Garuda Indonesia expected. Based on preliminary studies conducted, there are still customers who feel not satisfied with the services provided by the Garuda Indonesia airline. To maintain the number of customers and increase the number of customers using Garuda Indonesia flight services, Garuda Indonesia airlines must evaluate the quality of service and improve the quality of services provided. This study aims to evaluate the quality of service on airlines using the Kano model and perform quality risk calculations on airline service using Failure Mode and Effects Analysis (FMEA) method. By using KANO Model and Failure Mode and Effect Analysis (FMEA), there are 8 service attributes that need to be improved by Garuda Indonesia Airlines. The service attributes include the ease of check-in and waiting time, the time of departure and the arrival of the aircraft, the suitability of the number and the flight schedule, the flight safety, safety standard, the ticket price compared to the competitors, the suitability of the ticket price with the services provided, compensation in case of loss or damage to the luggage and the quality of the dish / snack served during the flight. These attributes need to be upgraded by Garuda Indonesia airlines to increase customer satisfaction so customers will reuse.

Research of the activities of low-cost airlines in the air transportation market of Ukraine

The main concepts of new structure of aircraft business have been studied in this article. The key factors of airlines success, which implement business model ‘lowcost’, have been analyzed. The part of airline market that uses low-budget business model have been researched, despite the global crisis and a fragmentary phenomenons that should negatively reflect to the development of the market, still continues to increase, at a time when network, charter and regional parts reduce. The comparative characteristic of traditional and low-budget airlines have been conducted and the main differences of the actual indicators of activity have been specified. There have been emphasized that even though there are a number of advantages in comparison with the traditional air companies, and low-budget airlines determine the pace of world industry, but for the full business doing there is a need to solve a number of problematic issues, which have been characterized and detected during research, as well as to develop the concrete strategy in the industry and use its potential for cooperation with local authorities. The main role of a budget company that enters the Ukrainian market, if we talk about the positive effect of the activities of low-cost carriers, is the development of regions: flights to secondary airports, development of routes that never existed, creation of new jobs, development of tourism, and the other.

Joint impact of airline market structure and airport ownership on airport market power and profit margin

This paper investigates the joint impacts of downstream airline market structure, airport ownership structure, concession services, and low-cost carrier (LCC) presence on airport market power and profit margin. Lerner indexes for a sample of 61 major airports around the world were calculated for the period 2008–2014. Then, regression analysis was conducted to identify the determinants of the airport Lerner index. We find that a more concentrated downstream airline market would reduce the profit margin for a public airport but increase the profit margin for a private airport. A higher share of concession service is found to decrease the airport's overall profit margin (accounting for both aeronautical and concession services). Airports with significant LCC presence have a lower profit margin. Finally, the concentration in airline market is found to have a larger negative impact on airport aeronautical price than on the concession price.

Measuring service quality from unstructured data: A topic modeling application on airline passengers’ online reviews

Service quality is a multi-dimensional construct which is not accurately measured by aspects deriving from numerical ratings and their associated weights. Extant literature in the expert and intelligent systems examines this issue by relying mainly on such constrained information sets. In this study, we utilize online reviews to show the information gains from the consideration of factors identified from topic modeling of unstructured data which provide a flexible extension to numerical scores to understand customer satisfaction and subsequently service quality. When numerical and textual features are combined, the explained variation in overall satisfaction improves significantly. We further present how such information can be of value for firms for corporate strategy decision-making when incorporated in an expert system that acts as a tool to perform market analysis and assess their competitive performance. We apply our methodology on airline passengers’ online reviews using Structural Topic Models (STM), a recent probabilistic extension to Latent Dirichlet Allocation (LDA) that allows the incorporation of document level covariates. This innovation allows us to capture dominant drivers of satisfaction along with their dynamics and interdependencies. Results unveil the orthogonality of the low-cost aspect of airline competition when all other service quality dimensions are considered, thus explaining the success of low-cost carriers in the airline market.

Convergence in the Chinese airline industry: A Malmquist productivity analysis

Our paper examines the productivity levels of Chinese airline market over the period 2006–2016 using Malmquist productivity indexes. Applying a decomposition technique on the estimated productivity index we decompose airlines' productivity levels into technological, pure technical efficiency and scale efficiency change components. The results signify that the reforms made on the Chinese airline industry have forced the airlines to enhance both their catching-up ability and their innovation capacity. This in turn is reflected on their estimated productivity levels. Then in a second stage analysis we utilize the methodological framework by Phillips and Sul (2007, 2009) and we test for the existence of convergence clubs among the estimated productivity components. The results verify the hypothesis of convergence among airlines' technological change and pure technical efficiency levels identifying distinct convergence clubs. The estimated relative transition paths reveal the insights of the enhanced competition among the Chinese airlines.

Determining Factors of Air Passengers' Choice of Transfer Airports in the Southeast Asia – North America Market: Managerial and Policy Implications

This study investigates the factors affecting air passengers’ choice of transfer airport in the market between Southeast Asia (SE Asia) and North America (NA). It estimates demand parameters and sheds lights on the business strategies for an airport operator including identifying effective routes to better compete for transfer passengers. Specifically, a discrete choice model is applied to estimate air travelers’ utility function from choosing different transfer airports in an origin-destination (OD) market. Our data consists of 78 routes in the SE Asia - NA airline market. Instrument variables (IVs) are used to control for potential endogeneity of airfare, while we treat airport characteristics including minimum connection time (MCT), service, size, and detour degree as exogenous. The main empirical findings are the following: 1) Transfer passengers’ airport choice is determined by an airport’s characteristics including MCT and service quality, in addition to those traditional factors such as airfares and travel time. 2) Based on estimated utility function parameters, we also quantify transfer passengers’ willingness-to-pay for several transfer airport’s characteristics. 3) With our estimation results, a case study is conducted for Incheon International Airport to identify candidate routes that have the greatest potential for the airport to increase the number of transfer passengers.

YouTube as an Airlines Marketing Tool

Abstract Multimedia communication through social media has been experiencing constantly growing significance in the field of airline marketing. The aim of the research presented in this paper was to find out and, with the help of both qualitative and quantitative analyses, describe the way YouTube is used by airlines. The research was conducted in the form of a comparative study with the objective of identifying the difference between YouTube performance of full-service carriers (FSCs) and low-cost carriers (LCCs). The intention was to identify which factors influence the effectiveness of airline marketing conducted via YouTube an as well as the way in which they do it. Analysis of selected data was facilitated by social media analytics tool SocialBakers, content analyses and a correlation analysis of YouTube metrics, selected on the base of previous research results. The research data were collected twice during the year 2017 in order to reflect changes over time. Research results showed that FSCs build their YouTube channels more systematically than LCCs. FSCs offer a substantially wider range of video topics and often sort out topics of their videos in a more detailed way. Regarding the basic metrics of YouTube channels (total number of views, number of subscribers), FSCs surpass LCCs significantly. One reason for their much higher rate of views is the fact that FSCs use celebrities more frequently, and frequently they offer high-quality impression/relationship airline presentation.

Technology Roadmap for the Single-Aisle Program of a Major Aircraft Industry Company

The single-aisle (SA) program has been the most successful aircraft program for the company 1 1 In order to safeguard the sensitive contents and privacy of the organization on which the study has been performed, the organization has been referred to as ‘Company’ in the paper. The identities of the people involved in the development of the roadmap has been concealed or revealed based on the willingness of the participant. on which the study has been performed. The Asian airline market has consistently grown over time due to population growth, high economic growth, and the availability of good airports. This growth has propelled both foreign and domestic airline companies to invest heavily in the Asian region. The SA aircrafts as a result have become the most demanded aircrafts in the region. Due to old product features in the SA aircraft, it has become difficult for the airline companies to fulfill market expectations. Therefore, the aim of this study is to develop a technology roadmap for the company so as to prioritize the product features. The technology roadmap for the company is developed by taking into consideration four factors viz., product features, market drivers, resources, and technology. Finally, these factors are mapped together so as to come up with an overall technology roadmap. Also, the roadmap is divided into a timeframe consisting of short-term and long-term goals. In the research works, currently and formerly undertaken at universities, the views of experts from the organization and airline pilots have been taken into consideration for the evaluation of the four factors of the technology roadmap.

Congestion pricing and environmental cost at Guangzhou Baiyun International Airport

To solve the problems related to resource constraints during peak periods—especially flight delays—congestion pricing, which is an important demand management tool, is proposed to ease airport congestion. A steady-state congestion model that includes the costs of airlines, passengers and the environment is established to calculate congestion fees for different times of day and different queue lengths. For the atomistic airline market, airline congestion fees are approximately 5000RMB to 10,000RMB during off-peak time. However, during peak time, congestion fees exceed 10,000RMB and can even reach 35,000RMB. These results show that airport congestion pricing can motivate airlines to move certain flights from the peak period and can slightly alter the scheduled departure times of other flights to avoid the rush of departures that occur on the hour at busy airports, thereby reducing the cost of delays caused by congestion. Moreover, congestion pricing that includes environmental cost has been shown to contribute to energy conservation and emissions reduction.

The airline industry in South Africa: drivers of operational efficiency and impacts

PurposeThe airline industry is structurally challenged by its very nature, because of high overhead and capital costs. This is further exacerbated by macro-predictability and micro-uncertainty, thereby making it difficult for airlines in South Africa to attain operational efficiency. The purpose of this study is to identify drivers of operational efficiency and their impacts on airline performances in South Africa.Design/methodology/approachAn extensive data collection using primary and secondary sources enabled the researchers to gather data on all the airlines operating in South Africa, for the period of 2012-2016, on a variety of parameters. A two-stage empirical analysis was carried out, which involved estimation of operational efficiencies during the first stage by using data envelopment analysis (DEA) and determination of performance drivers during the second stage by using a two-way random-effects generalised least squares regression and also a Tobit model.FindingsFrom the study, it is clear that two structural drivers, namely, “aircraft size” and “seat load factor”, and two executional drivers, namely, “low cost business model” and “revenue hours per aircraft”, significantly impacted (p < 0.05) positively on airline efficiencies in South Africa. To improve efficiency, management should first concentrate on the drivers that can be changed in the short-term (executional drivers) and later focus on the drivers that require long-term planning (structural drivers). However, among the structural drivers, only “aircraft families” had a negative impact on airline efficiencies, whilst among executional drivers, only “block hours” negatively impacted on airline efficiencies.Research limitations/implicationsDespite the importance of this study, it is not free of limitations. Firstly, because of the small size of the industry, fewer airlines and lack of detailed data, the study could not consider other important factors such as optimal routing and network structure. Secondly, although non-aeronautical revenues have become increasingly important in airline management, they were not included in this study. Further studies may investigate the impact of these factors on airline efficiency.Practical implicationsThe results have potential policy implications. Firstly, as the domestic airline market in South Africa is too small to operate with a smaller aircraft efficiently, airlines that intend to make use of smaller aircraft should first identify niche markets where they can have a route monopoly, such as SA Airlink. Secondly, as block time negatively affected airline efficiency, airlines can undertake schedule adjustments to reduce block time and thus improve technical efficiency.Originality/valueThis paper is a first attempt to identify drivers of operational efficiency in the airline industry in South Africa. The results indicate that DEA is a useful tool to identify factors impacting airline efficiency and could improve airline performances in South Africa.

Airline categorisation by applying the business model canvas and clustering algorithms

The phenomenon of increasing airline business model convergence implies attempts for improvement and poses the questions, whether the airline market can be divided into new clusters, in contrast to the established distinction between low-cost and full-service network carriers. The objective of the paper is to determine airline clusters, which go beyond the two well-established low-cost and full-service network carrier models and facilitate a better understanding of the factors distinguishing different business models. The Business Model Canvas approach is applied to a set of 42 currently operating airlines to identify key factors for a subsequent, multidimensional two-step cluster analysis. Two of the seven resulting clusters are selected for a more detailed analysis to identify regularities within each clusters' key factor characteristics.

Competitive impact of the air ticket levy on the European airline market

In tribute to Jules Dupuit, this study analyzes how the innovative financing tax for development has influenced the competition among airline companies and to what extent it affected their sales. To do so, we specify an econometric model where the representative consumer chooses the utility maximizing alternative among the differentiated products offered by the airlines which compete in terms of prices. It is a fairly reasonable and well accepted representation of the competition in the airline industry, assuming that the structure of their networks is given in the short run. The present solidarity tax has increased the average price for the European airlines by only 0.08% and could increase average prices by 1% if it were applied to all European airlines. Implemented by all countries it would lead to a 0.17% increase in Air France prices while the price increase would be 1.05% for the other airlines in our sample. These numbers compared to the growth rate of the air traffic show that the impact of the solidarity tax would be very small. Overall the air ticket levy applied by all European airlines would not affect significantly the degree of competition among airlines.

Recent developments in 'low cost carrier' research: a review

Recent trends in the low cost carrier (LCC) literature is reviewed in this study from 2005-2015. On the basis of systematic review, 169 articles located in 20 top air transport journals are categorised into nine distinct topics/major themes: 1) airline strategy; 2) airline business model; 3) airline economics; 4) airline performance; 5) airline market structure; 6) airline operations; 7) airline sales and marketing; 8) airline service quality; 9) airline and airport relationship. All themes are reviewed and their intra linkages are presented in the study. Concluding thoughts concerns requirement to carry out process and variance-based studies and compare various LCC models across the word from the point of view of location, policy, regulations and competition through process and variance-based research.