Full-service Carriers Research Articles

TECHNICAL EFFICIENCY OF INDIAN AVIATION COMPANIES: AN ANALYTICAL STUDY

The present study assesses and analyzes the technical efficiency of select airline companies operating in India during post-reforms era. The study was conducted from 2004-05 to 2018-19 on six Indian airline companies covering both full-service carriers and low-cost carriers. The study intends to determine how efficiently the resources are utilized by each airline relative to its peers. Based on two input and two outputs, a non-parametric approach, namely Data Envelopment Analysis (DEA) is used to estimate the Overall Technical Efficiency (OTE) of select airline companies during the period of study. The empirical estimates show that airlines are operating with OTE between 62.2 per cent and 92.7 per cent. It is observed that Jet Airways is the most efficient unit during the period of study

Impacts of a sustainable aviation fuel mandate on airline competition — Full-service carrier vs. low-cost carrier

The aviation industry has proposed the collective goal of achieving net-zero carbon emissions by 2050. In addition to the existing market-based methods (MBMs), the use of renewable energies, in particular, sustainable aviation fuel (SAF), could be one of the most promising means for achieving this long-term target. This paper investigates how an SAF mandate from the government can lead to heterogeneous impacts on two types of airlines, namely, full-service carriers (FSCs) and low-cost carriers (LCCs), that compete in the same markets. A game-theoretic economic model is constructed that accounts for the different service quality levels and cost structures (i.e., fuel efficiency) between FSCs and LCCs. Our analytical results suggest that the SAF mandate favors LCCs over FSCs. The share of SAF blended into fuel raises the airfares of both types of airlines while reducing the traffic and profit of FSCs. The impacts on the LCC traffic and profit depend on its fuel efficiency relative to that of FSC. When LCCs are sufficiently fuel efficient, the SAF mandate can increase their traffic and profit. The government subsidy on airline's SAF use is also analyzed, deriving the optimal subsidy levels for FSC and LCC respectively to achieve pareto-improvement in social welfare and consumer surplus. We also examine how air passengers’ environmental awareness affects the outcomes of SAF mandate implementation. Our economic model also accounts for passengers’ heterogeneous preferences in terms of service quality and price sensitivity.

Impact of operator characteristics on landing gear ground manoeuvre occurrences

AbstractThe variability in ground manoeuvre occurrences for aircraft landing gear is intrinsically linked to the airport geometries served by aircraft in-service and consequently, the cyclic loads that landing gear carry are driven by the route network and characteristics of aircraft operators. Currently, assumptions must be made when deriving fatigue load spectra for aircraft landing gear, which may fail to capture the operator characteristics, potentially leading to design conservatism. This paper presents the enhanced characterisation of ground turning manoeuvres within the Automatic Dependent Surveillance-Broadcast (ADS-B) trajectories for six narrow-body aircraft across a full-service carrier (FSC) and a low-cost carrier (LCC) fleet. The methodology presented within this paper employs ADS-B latitude and longitude information to overcome limitations of previous approaches, increasing the rate of correct manoeuvre identification within ADS-B trajectories to 77% of flights from the 50% rate achieved previously. When characterising the ground manoeuvres across 3,000 flights, significant differences in manoeuvre occurrences were observed between individual aircraft within the LCC fleet and between the FSC and LCC fleets. The occurrence of tight and pivot turns were shown to vary across the six aircraft with six and eight fatigue-critical turns being performed by the FSC and LCC fleet for every 10 flights performed. In addition, it was observed that the direction of fatigue critical turns is biased in specific directions, suggesting that individual main landing gear assemblies will accumulate fatigue damage at an increased rate, leading to greater justification for operator-specific spectra and structural health monitoring of aircraft landing gear.

Airline performance measurement using bias-corrected network data envelopment analysis estimates: Evidence from a turbulent era

This study's objective is to estimate airline performance and identify the most resilient business model during periods affected by global crises, including financial crises, natural disasters, pandemics, terrorist attacks, and post-crisis periods. A balanced panel of 80 airlines, classified into full-service carriers (FSC), low-cost carriers (LCC), high perceived quality, and low perceived quality, during 2008–2021 is used in this work. The data is sourced from the ICAO Data+ and Skytrax databases. Following the recent literature on airline efficiency, we consider airlines' internal structure, which unfolds into three stages: (a) operations, (b) services, and (c) sales. Also, we employ a novel three-stage multi-parametric bias correction (MPBC) slacks-based measure (SBM) network data envelopment analysis (NDEA) approach to estimate system- and stage-specific efficiencies. It has been proven that the MPBC estimates are consistent, while the MPBC-SBM-NDEA approach addresses the limitations of conventional NDEA and SBM-NDEA models. This work highlights that airline passengers have become more price-sensitive, selecting value-for-money airline products and services after the Global Financial Crisis. Given this trend and the remainder of the study's findings, LCCs offering value-for-money products and services and operating smaller-scale networks with smaller plane capacities are less vulnerable to external shocks and are easier to rebound during post-crisis periods.

Airline competition in Indonesian domestic market: Airline-within-airline strategies and impact of the COVID-19 pandemic

This study investigates the competition among four carriers from two major airline groups in Indonesia, namely Indonesia group (Garuda Indonesia and Citilink of Garuda), and Lion Air group (Lion Air and Batik Air). An airline route choice econometric model in the spirit of Probit model is constructed and estimated to shed light on the interactions of the four airlines of these two groups. Specifically, our empirical examination accentuates how the two groups utilize the Airline-within-Airline (AWA) strategy, which refers to operating a full-service carrier (FSC) and a low-cost carrier (LCC) at the same time, and the impact of the COVID-19 pandemic. Our estimation results suggest that the established FSC, Garuda Indonesia, used its LCC subsidiary, Citilink, as a fighting brand against its LCC rivalry, Lion Air. By contrast, Lion Air established a FSC brand, Batik, to broaden the market coverage instead of purely as a fighting brand. This competition structure was however shifted by the COVID-19 pandemic. All carriers became more aggressive to serve the routes involving those major airports in the big cities with more price-inelastic travellers. The overlapping routes between Lion Air and Batik Air have increased during the pandemic. The routes serving the tourism destinations have been cut due to the drop of inbound overseas visitors during the pandemic.

Layout analysis of the RCEP international airline network based on hub identification using improved contribution matrix

The signing of the Regional Comprehensive Economic Partnership agreement brings new opportunities for the development of international air transportation. Faced with fierce competition, it is worth studying how hub airports should enhance competitiveness, and how low-cost carriers and full-service carriers should optimize the RCEP international airline network layout for better development. Aiming at providing suggestions for the development of hub airports, low-cost and full-service carriers in the RCEP international airline network, this paper identifies the hub airports, analyzes the layout of the RCEP international airline network, and the multi-layered characteristics based on an improved contribution matrix using data from 2010 to 2019 collected from the Official Airline Guide (OAG). This method comprehensively considers attributes of hub airports and the multi-layered characteristics of the airports and routes. The layout analysis indicates that the RCEP international transportation market presents a more open environment for competition and cooperation where base carriers are often the biggest supporters of hub construction. The multi-layered characteristics analysis reveals that low-cost carriers contribute more towards opening up new RCEP routes than full-service carriers. It is advised that carriers newly entering the RCEP international aviation transportation market and low-cost carriers dedicate to establishing new routes around their hub airports to monopolize this market and enhance their market share, whilst full-service carriers consolidate existing routes and increase route density to achieve economic benefits.

Competing with Low Cost Carrier in a Sustainable Environment: Airline Ticket Pricing, Carbon Trading, and Market Power Structure

As the aviation industry embraces the carbon trading market, the competition between full-service carriers and low-cost carriers in ticket pricing is becoming more complicated and worth studying. To this end, we introduce carbon trading into game theoretical models under different market power structures and use real data from China Eastern Airlines and Spring Airlines on the route from Sanya to Shanghai to study this problem. This differs from the existing literature as empirical research is mainly used in this field. Our main results show that the disparity in market power (Stackelberg game) alleviates competition intensity under carbon trading and leads to higher equilibrium prices than in the Nash game model. Meanwhile, even when the two airlines have similar market power, Spring Airlines still has incentives to voluntarily act as a follower of China Eastern Airlines instead of maintaining equal market power with China Eastern Airlines. Under mild regulation, the uplift of carbon prices promotes higher equilibrium prices and supports larger profits. For the sake of consumer welfare, this suggests that the regulation department should impose stricter regulations and grant subsidies to motivate the airlines to mitigate emissions by introducing clean technologies.

Stochastic Modelling of Aircraft Ground Time at Soekarno-Hatta International Airport

Ground time plays an important role in keeping flight on-time performance and passenger smooth flow. It varies depending on the aircraft type, procedures, passenger number and/or cargo amount, maintenance requirements, and ground handling service quality. This research aims to explore the ground time distribution pattern at Soekarno-Hatta International Airport. The daily flight historical data is divided into several categories based on the airline’s service type for local airlines, the airline’s origin for foreign airlines, the type of flight, and aircraft size. Ground time data of each flight category is then fitted to all possible distribution types by using the Distribution Fitting app in Matlab. The best-fitted distribution definition uses the Kolmogorov-Smirnov test by comparing the p-value of each distribution. 6 distributions fit 20 flight categories. Almost all local airlines’ ground time except full-service carrier international flights and low-cost carrier international flights with wide-body aircraft fit to Burr distribution. Full-service carrier international flight with narrow and wide-body aircraft, international flight with narrow-body aircraft operated by airlines from China and other countries fit Generalized Extreme Value distribution. Low-cost carrier international flights with wide-body aircraft and private flights fit to Inverse Gaussian distribution. International flights with wide-body aircraft operated by airlines from Korea, Japan, and other countries airlines fit for Nakagami distribution. While the cargo flights fit t Location-Scale distribution for wide-body aircraft and Weibull distribution for narrow-body aircraft. Then the stochastic models are developed based on each flight category’s distribution parameters. These models are expected to be able to guide future research in ground time or apron capacity management as they provide the data distribution without more primary data needed.

Airlines and corporate sustainability initiatives: Unrecognised value

In this research the authors sought to better understand the formal and informal (social media) communication channels utilised by 28 airlines worldwide. The primary motivations focused on how the airlines communicate sustainability and corporate social responsibility (CSR) initiatives to stakeholders, and the resulting impact, if any, on corporate reputation. To better align the stakeholder segments of the airlines, the airlines were segmented into two categories: full-service carriers (FSCs) and low-cost (no frills) carriers (LCCs). Data analyses from 28 airlines worldwide were conducted to determine whether FSCs or LCCs gain higher engagement in their formal and informal communication of CSR/ sustainability initiatives. Although the results were mixed, the study finds that, regardless of type of airline category, the communication of CSR/sustainability efforts enhances stakeholder engagement and improves corporate reputation regardless of type of communication channel. These findings, which transcend the aviation sector, highlight the importance of using both formal and informal channels to communicate inter alia customer service initiatives. Highlights include the application of CSR/ sustainability social media communication practices to a selected group of international airlines and how such practices correlate with the United Nations’ Sustainable Development Goals, in the airline context. Finally, based on the research results, the paper presents recommendations to improve the communication of CSR/sustainability goals and hence corporate reputation.

Full-Service Carrier (FSC) vs Low-Cost Carrier (LCC): Purchasing Decision-Making Process of Passengers

The demand for the aviation industry has grown as a result of the shift in people's travel preferences brought on by rising wealth and expanding trade in the world and in our nation. Air travel is now preferred due to state assistance, new airports, superior aircraft, and the relative drop in expenses. This study's main focus is on the consumer purchase patterns of two airline companies that operate in the very competitive aviation sector. Depending on whether the airline is a full-service carrier or a low-cost carrier, these variables change. The "Factors Affecting Airline Preferences Scale" was created and distributed to passengers of two airline organizations at Istanbul Sabiha Gökçen Airport (a full-service carrier (FSC) and a low-cost carrier (LCC) operating in Turkey) to assess the extent to which variables like airline reputation, advertising, frequent flyer programs, price, service quality, and digital marketing tools like websites, e-mails, Facebook, Twitter, Instagram, YouTube, and mobile applications have an impact on the process of ticket purchasing decision of passengers. It was shown that the passengers' purchasing decisions were influenced by reputation, service quality, frequent flyer programs, price, digital marketing initiatives, and advertisement. It was shown that depending on whether the airline is a full-service carrier or a low-cost carrier, the impact of these elements differs.

Disruption and recovery of the US domestic airline networks during the COVID-19 pandemic

The COVID-19 pandemic has had serious impacts on the airline industry. Ensuring that aviation policies in emergent situations both guarantee network connectivity and maintain competition among airlines is crucial in these circumstances. To this end, we aimed to understand the network dynamics of individual airlines. In this study, we quantitatively reveal the day-to-day dynamics of these US domestic airline networks, comprising 17 airlines, from January 2019 to December 2021. Specifically, we applied a framework for analyzing temporal networks, in which the network structure changes over time. We found that, first, even though the number of nodes and edges returned to pre-pandemic levels around July 2021, the structure of the entire US domestic airline network remained altered. We also found that the network dynamics varied significantly from airline to airline. Full-service carriers were less flexible in changing their network structure and suffered higher revenue losses. On the contrary, most regional carriers completely shifted to a new structure, which may have contributed to reducing their revenue losses. Low-cost carriers were characterized by more pronounced differences between airlines and drastically changed their network structure immediately after the declaration of a national emergency. Finally, we also examined the recovery process and found that the flights connecting airports that are more central and share more common neighbors, and those connecting airports with larger numbers of connections tend to recover earlier for most of the airlines.

A Modified Weighted Connectivity Ratio for Measuring a Low-cost Carrier's Connectivity at its Major Airports

This study aims to analyze how good and efficient the low-cost carriers' connectivity is at their major airports by studying one of the largest low-cost carriers in the world, AirAsia Group. Weighted Connectivity Ratio is used in the calculation, applied with slight modifications to suit the operations of low-cost carriers at their airports. The results reveal that some airlines have very good connectivity, even when it is compared to the connectivity of several big full-service carriers in Europe. This research brings a novelty in the form of an analysis of connectivity of low-cost carriers, considering that most of the previous research only focused on the connectivity of full-service carriers that implement a hub-and-spoke strategy. This is important because low-cost carriers are currently present with a very rapid growth as an alternative flight option that is more affordable for passengers in addition to full-service carriers that have previously dominated the aviation market.

Pre-Evaluating Efficiency Analysis of Mergers and Acquisitions of Full-Service Carriers in Korea

In November 2020, Korean Air signs an agreement to acquire and merges with 63.88% of Asiana Airlines’ shares, which is conditionally approved by the Korea Fair Trade Commission to address exclusivity concerns. The conditions require both airlines to return certain take-off or landing positions and revise their licenses for 26 international and 8 domestic routes within 10 years. This paper collects passenger traffic data from 2009 to 2019 using Korean data analysis, retrieval, and transfer systems employed by both airlines. Data envelopment analysis is utilized to assess their performance assuming the merger and acquisition. The analysis reveals that Korean Air’s super-efficiency performance in 2011 is the highest among all decision making units (DMUs). The best super-efficiency performance is achieved not only by individual companies but also by the combined enterprise in 2019.

Using multi-criteria performance measurement models to evaluate the financial, operational and environmental sustainability of airlines

Airline sustainability, defined as both decarbonization and long-term financial survival, has become critical especially since the onset of the COVID-19 pandemic. Our paper investigates the multi-dimensional effects of the COVID-19 crisis on airlines’ sustainability performance using data from 56 airlines for the period before, during and early after the pandemic (2017–2021). We develop and use a novel multi-criteria MEREC–CoCoSo/Borda performance measurement model tailored to the airline industry. Our results suggest that while operational results have dominated sustainability weights throughout the period, the financial pillar has gained considerably in importance while the decarbonization criterion decreased in weight in 2020. However, from 2021, decarbonization started to become more important again in the “new normal” and sector recovery. In terms of overall and sustained sustainability, low-cost carriers and small full-service carriers with predominantly domestic networks are ranked as best performers. Renewing fleet, attaching decarbonization conditions to government aid and reviewing airport slot policies are important to prepare the aviation industry for the next pandemic or disruption.

Airline efficiency and environmental impacts – Data envelopment analysis

Airline efficiency has been a research interest for decades. While early airline efficiency research focused primarily on revenue generation and profitability, growing airline social responsibility is driving greater investment into understanding and improving the environmental impact on airline efficiency. This study developed a two-phase, two-stage model using a data envelopment analysis (DEA) approach to simultaneously evaluate airline operations for available seat mile (ASM) generation, revenue passenger mile (RPM) generation, carbon dioxide emissions abatement, and revenue generation on a sample of thirteen airlines. Efficiency evaluation was performed for the years between 2013 and 2015, between U.S. and non-U.S. carriers, and between full-service carriers (FSCs) and low-cost carriers (LCCs). Results indicated more accurate measurement of airlines’ overall efficiency using the proposed DEA model, which included operational and cost factors as input variables and environmental impact as both the input and output variables in the model. Service and environmental factors were found to be significant in determining airline efficiency, with environmental abatement affecting the overall efficiency of airline performance both inside and outside the U.S. when emission reduction effort was properly accounted for. The findings provided theoretical and managerial implications in the assessment of airline efficiency with a special emphasis on incorporating environmental impact in the overall evaluation.

Airline CSR and Quality Attributes as Driving Forces of Passengers’ Brand Love: Comparing Full-Service Carriers with Low-Cost Carriers

Consumers’ increased awareness of social and environmental issues encourages airlines to implement corporate social responsibility (CSR); however, the effectiveness of CSR according to airline type remains unclear. This study examines the roles of CSR and service quality in enhancing passengers’ brand love in the airline industry and explores the moderating role of airline type on the CSR–brand love and service quality–brand love relationships. To test the theoretical model, we conducted a web-based survey with 426 participants who were knowledgeable about the CSR activities of the airline companies that they had recently used. Based on the survey responses, the structural equation modeling results revealed the salient roles of both CSR and service quality in creating passengers’ brand love, which, in turn, significantly contributed to positive word of mouth. Moreover, airline type significantly moderated the effect of airlines’ CSR on brand love. Based on these findings, we provide academic implications and practical strategies by airline type.

Determination of the responsibility of delay in the context of airline business model: A case of American Airlines and Southwest Airlines

The main factor in the airline transport service being the reason for the choice is the place and time benefit it provides. Delays are negative situations that disrupt the time utility, reduce airlines' profits, cause congestion trouble and disrupt tariff plans. The first part of the study consists of information about delays and fundamental issues related to delays. In the second part, it has been tried to summarize the studies on the slot, which is directly related to the delays. In the last part, two airlines that adopted different business models, full-service carrier and low-cost carrier, were compared based on delay reasons. The study aims to determine the causes of delay and their predictive roles comparatively. We have used the multiple hierarchical regression model for this purpose. American Airlines and Southwest Airlines were selected as full-service carrier and low-cost carrier, respectively. We have determined that even though Southwest Airlines is a low-cost carrier, and more punctual than American Airlines, delays stemming from the carrier play a greater role in overall delays than American Airlines.

항공사 핵심서비스 품질이 지각된 가치, 브랜드 이미지 및 행동의도에 미치는 영향에 대한 연구

In short-haul routes of full service carriers and low-cost carriers, airline service quality has changed and simplified since COVID-19, such as not providing in-flight meals, strengthening non-face-to-face services, and maintaining a pleasant in-flight environment through strengthening quarantine activities. This study was conducted with interest in the relationship between the simplified and transformed airline core service quality and the perceived value, brand image and behavioral intention. As a result of the study, first, airline core service quality had a positive (+) effect on perceived value. In addition, it had a positive (+) effect on the brand image. Second, perceived value had a positive (+) effect on behavioral intention. It also had a positive (+) effect on the brand image. Third, brand image had a positive (+) effect on behavioral intention. Based on the results of the empirical analysis of the degree of perception(perceived value) of airline core service quality and its impact on brand image, it is expected that many implications will be derived if applied to airline core service strategy establishment and core service quality management measures.

A product and organisational architecture analysis of the performance of Southeast Asian airlines

In this study, the operating environment's attributes and its influence on the performance of airlines in Southeast Asia are assessed through a comprehensive literature review and performance analysis. As a first step, a Pareto Analysis is performed to assess the capacity contribution of registered airlines in the Southeast Asia region, totalling 65 in 2019. Then, seven of the largest Southeast Asian airlines, representing 80% of total capacity in the region, are taken forward into an in-depth benchmarking and Product and Organisational Architecture (POA) performance analysis. The research pinpoints key differences between Full-Service Carriers and Low-Cost Carriers in the region through a series of 13 metrics applied in the POA. It was found that the region's FSCs scored better at Product Architecture, which includes convenience, comfort and connectivity, whilst the LCCs strength was in the Organisational Structure component, namely fleet and labour productivity, sales and distribution, and airport attractiveness, especially in the case of AirAsia.

안전리더십, 안전문화, 안전행동 간의 구조적 관계 :항공사 객실조직을 중심으로

Purpose - The purpose of this study is to examine the structural relationship of between safety leadership, safety culture, safety behaviors focusing on airline cabin organization Design, data, and methodology - This study used theoretical and empirical research methods. In order to achieve that purpose, empirical research was conducted using questionnaires given to 230 flight attendant who work internal FSC(Full Service Carrier) airlines. The data collected were analyzed with the SPSS 20.0 and AMOS 22.0 statistics package. Analysis was performed using frequency analysis, general characteristics of sample, Structural equation model was implemented for confirmatory factor analysis, Cronbach''s alpha calculation, correlation analysis test. Result - The result of this study empowering leadership among safety leadership was found to affect safety culture and safety behavior. It was found that directive leadership had an effect on safety behavior and not on safety behavior. And Safety culture was found to affect safety behavior. Conclusions - The implication of this study is to safety leadership influences the safety behavior of cabin crew by establishing a safety culture in the cabin organization.