International Airline Industry Research Articles

Supply Chain Process Improvement for International Airline Industry

Supply Chain Process Improvement for International Airline Industry

Dishing up Distinction: Language Materiality and Multimodal Coherence in Elite Foodways

This paper arises as part of a discourse-focused commodity chain analysis of elite foodways in the international airline industry. At the center of this critical intervention sits the business class airline meal as an epitomic manifestation of contemporary class privilege. As both a fraught social hieroglyphic and a complex semiotic assemblage, “premium” airline dining is articulated across different sites and through a range of different communicative practices and modes. With this in mind, we examine the language materiality of plateware (crockery), flatware (cutlery), glassware, and other tableware used for staging and promoting airline meal services. The specific object of our analysis is the transmodal interplay between words and things which helps generate both the cohesion and coherence of meals. This kind of textual unity and “inter-semiotic harmony” is key for the performative production of order which is, in turn, central to the classist production of distinction and (elite) status.

Competitive Effects of Joint Ventures in the International Airline Industry

In the past two decades, many international airline carriers have expanded their cooperation by forming various joint ventures (JVs). One key feature of these JVs is that they require carriers to determine certain airfares jointly and integrate their operations as a single carrier in the market for international air travel. This paper tries to evaluate the impact of JVs on airfares. The focus is on a set of behind-to-gateway markets between a non-gateway U.S. city and a foreign gateway city, where both online and codeshare flights are offered, to study how the airfares of online flights are affected after carriers form JVs. A new hypothesis is discussed that JVs increase the airfares of online flights. Based on this hypothesis, an empirical model is built to evaluate the Oneworld alliance’s transatlantic JV established in July 2010. This empirical analysis, which uses the U.S. Department of Transportation (U.S. DOT)’s Airline Origin and Destination Survey (DB1B) international data from 2008 to 2013, indicates that the Oneworld transatlantic JV increased airfares of online flights by about 3%–4% in the behind-to-gateway markets. Previous studies, which emphasized the airfare reductions of codeshare flights in the connecting markets, may have overestimated the benefits to consumers from JVs. U.S. DOT can better protect consumers by evaluating plausible airfare increases in online flights in the behind-to-gateway markets when reviewing new applications for JVs.

The Effect of Brand Perception in Malaysia’s International Airline Industry During Covid 19

Annals of Social Sciences & Management studies are an international journal which focuses to spread a vast knowledge to the readers. ASM includes various topics which cover every part of Sociology and management studies like Philosophy & Public Affairs

Socio-demographic characteristics and the level of importance that consumers attach to services offered in the passenger airline industry

As international competition in the airline industry intensifies, how airline companies structure the design of their service offerings to meet the real needs of their customers becomes crucial to survival. This paper examines the level of importance attributed by consumers to different elementary services customarily provided by companies in the passenger airline industry. It determines if and to what extent, this is influenced by consumer's socio-demographic characteristics of education, occupation, income, age, gender, marital status and nationality. A total of 20 elementary services often offered by companies in the international passenger airline industry were examined. Findings of the empirical research carried out revealed that, while education, and marital status had no apparent influence; age, gender, income, occupation, and nationality tend to exert significant influence on the level of importance that consumers attach to services offered in the passenger airline industry. Managerial implications of this result are discussed, and directions for future research are given.

Domestic Market Power in the International Airline Industry

We posit and empirically test the hypothesis that airlines are able to charge a fare premium in markets that originate in their domestic country relative to similar markets that originate in foreig...

A Conceptual Framework on Customer Satisfaction: The Mediating Role of Corporate Image

This research study is intended to deliver a swift review of what is previously known about customer satisfaction and enhanced understanding of the factors of customer relationship management (CRM) in relation to customer satisfaction. By examining the literature of prior studies, this article requires enhanced understanding of customer satisfaction in international airline industry of Pakistan. The study delivers a conceptual framework to broaden the customer satisfaction and the influence of CRM factors comprising service quality, social network interaction, and relationship through solving customer problems, physical environment and trust. The mediating role of corporate image will further strengthen the connection of CRM factors and customer satisfaction. The research findings supplement the present literature of CRM by enhancing the understanding of the dimensions of customer satisfaction. The proposed conceptual framework makes an essential input to the current literature on customer satisfaction by addressing its theoretical and practical implications.

Similarities and differences in Asian and Western travelers’ service performance measurement, evaluation and outcomes

As service firms look to international markets for growth opportunities, they often encounter consumers who have significantly different expectations and perceptions of service performance. Little is known of the relationships between service performance, price perceptions, satisfaction and behavioral outcomes in diverse cross-cultural consumer segments. Prior work also questions the equivalence in cross-cultural settings of service performance instruments developed in U.S. service environments. Using the international airline industry as the context, an industry-specific service performance instrument is developed and found invariant across Western and Asian settings. The results also reveal both similarities and differences in service performance evaluation and behavior across cultures. This study addresses the need for invariant service performance measures in order to be able to evaluate cross-cultural differences in service performance evaluation effectively; and the importance of service strategy differentiation for diverse cultural groups in international travel settings.

Cost functions and determinants of unit cost effects in horizontal airline M&As

This paper analyses the unit cost effects of mergers and acquisitions (M&As) using linear, quadratic, and translog cost functions. In addition to a basic unit cost model we specify separate models for distress, profit, relative size, and cost difference, among the merging firms. We use a sample of 19 horizontal M&As in the international airline industry and data spanning from 1980 to 2012. Our models show that M&As do not affect unit costs in a significant way, unless the relative size difference of the merging firms is large, in which case we detect an increase in unit costs.

Cost Functions and Determinants of Unit Cost Effects in Horizontal Airline M&As

This paper analyses the unit cost effects of mergers and acquisitions (M&As) using linear, quadratic, and translog cost functions. In addition to a basic unit cost model we specify separate models for distress, profit, relative size, and cost difference, among the merging firms. We use a sample of 19 horizontal M&As in the international airline industry and data spanning from 1980-2012. Our models show that M&As do not affect unit costs in a significant way, unless the relative size difference of the merging firms is large, in which case we detect an increase in unit costs.

Domestic Market Power in the International Airline Industry

We posit and empirically test the hypothesis that airlines are able to charge a fare premium in markets that originate in their domestic country relative to similar markets that originate in foreign countries. To this end, we focus on intercontinental one-stop air travel trips for which the main, intercontinental, flight legs are identical, while the feeder legs depart from a mixture of domestic- and foreign origins. We collect a unique database of published fares for such trips and estimate reduced form fare regressions with main flight leg fixed effects. We find that trips from and to domestic airports (compared with foreign airports) are characterized by about 9.5 per cent higher fares, even after adding controls for airport dominance, trip operating costs, the competitive environment and origin catchment area characteristics. These findings demonstrate that airlines have substantial domestic market power, enabling them to raise fares at their domestic airports irrespective of aforementioned market conditions. The magnitude of this domestic country effect is large relative to the traditional airport dominance effect, suggesting that the distinction between domestic- and foreign origins is a crucial determinant of the degree of market power that airlines can exert in the international airline industry.

An Assessment and Measurement of Risks in the International Airline Industry: A Study of the ICAO Carriers Over the Period, 1990-2013

A prior study by one of the authors (Gritta, et. al. 2006) published in the Journal of the Transportation Research Forum, examined the extent of operating, financial, and total leverage facing the major U.S airlines, those carriers with total revenues of $1.0 billion or more. The study found that the vast majority of the carriers were highly leveraged at both the operating and financial levels and that this resulted in highly unstable profitability and increased the dangers of bankruptcy. The global airline industry has always been highly cyclical and somewhat fixed-cost driven. Airlines are thus high in what financial analysts refer to as operating leverage. In addition, the many airlines have followed aggressive debt strategies; that is, they have chosen to use large amounts of long-term debt finance to purchase assets. This results in a high degree of financial leverage. In the past, the resulting combined leverage has created severe financial problems for major carriers, both domestically and internationally.The current study seeks to examine a sample of foreign carriers in order to measure the extent of risks on the international level. In doing so, comparisons will be made to the large U.S. carriers. If possible, the authors will use the same time horizon as in the published paper, although in some cases carriers are too new to have such a history.

The Environmentally Conscious Skies: Did the European Unionns Game of Brinksmanship Lead to a Viable Global Plan for Emissions Trading in Aviation?

Effective January 1, 2012, the European Union (EU) instituted the first emissions trading scheme (ETS) for aviation which affected the domestic and international commercial airline industry flying into and out of the EU. The EU established the ETS to counter the global aviation sector’s role in releasing greenhouse gas (GHG) emissions; however, such movement was met with heavy opposition by foreign countries, the International Civil Aviation Organization (ICAO), various commercial airlines and the Air Transport Association of America (ATA). This paper analyzes the legality of the EU’s unilateral ETS approach with respect to the commercial airline industry, examines the subsequent development of the ICAO’s global market based members (MBM) program, reviews strategic political strategies implemented by foreign nations to counter the EU’s unilateral action, evaluates the ICAO’s recent developments in instituting a global trading scheme to reduce GHG emissions, and proposes policy issues with respect to the ICAO’s MGM program as it applies to the EU ETS.

E-SERVICE QUALITY, PASSENGER SATISFACTION AND PASSENGER LOYALTY RELATIONSHIP IN AIRLINE INDUSTRY

With the start of the use of internet technologies in all areas of human life, customers have gravitated to perform many processes associated with customer products or services on companies’ websites and this led to a change in the customer profile. Today's customers are not willing to just get the cheapest products or services through the website, but also demand the quality of service standard which can respond to different expectations. From this point forth, in order to respond to customers' requests and needs and to keep up with the competition, companies, started to use the internet technologies intensely. This situation is also true for the airline companies, providing services to these companies in the international airline industry; the existence of a quality website is of the utmost importance. So, an airline companies being able to understand the relationships among e-service quality, satisfaction and loyalty have become compulsory in order to maintain profitability. The purpose of this study is to demonstrate the interrelationships among e-service quality, passenger satisfaction and passenger loyalty in the airline industry. Within the scope of the research, a survey prepared by using 5 point Likert scale has been conducted. Surveys have been applied to 421 domestic and 400 international passengers in various airports in Turkey. For data analysis; Regression analysis was used. According to the survey results; it has been concluded that both the e-service quality affects the passenger satisfaction and the passenger satisfaction affects the loyalty of the passenger positively. In addition, the findings demonstrated that significant differences exist between the passenger satisfaction regarding their flight type. What is more, according to the findings; the airline managers have been made a number of suggestions.

Identificação de fatores para a efetivação da descentralização de voos internacionais regulares de passageiros no Brasil

O trabalho visa identificar elementos que influenciam o transporte aéreo internacional brasileiro, de forma a estimular que haja a descentralização de voos internacionais regulares de passageiros no Brasil. Foram realizadas pesquisas junto a passageiros dentro de salões de embarque internacionais, e a utilização da técnica de análise multicritérios AHP junto a docentes e a profissionais dos setores público e privado que atuam com transporte aéreo no Brasil. Encontrou-se que, para os passageiros, o fator primordial é o menor tempo total de viagem e que as agências de viagens ainda exercem uma forte influência sobre estes quando da compra da passagem aérea. Já para os profissionais, o fator chave é a existência de elementos que incentivem a demanda em uma dada região, e que os estímulos governamentais, como subvenções econômicas e revisões de Acordos de Serviços Aéreos (ASAs), possuem indicativos que são pouco efetivos para o setor no Brasil.

Metal Neutrality and the Nation-Bound Airline Industry

The system of trade in international aviation services is a product of post-World War II economic nationalism. It has resulted in an international airline industry in which international airlines are effectively 'nation-bound', because their operations all must begin and end in their home countries. The growth of branded global alliances and the evolution of US and European aviation policies are accelerating rapidly. As part of its deregulation policy, the US has used the possibility for antitrust immunity (ATI) for cooperative marketing arrangements with national carriers that accept Open Skies liberalization. Recent developments in US policy now require airlines seeking such immunity to commit to operate joint ventures that are 'metal neutral'. A metal neutral joint venture is structured so that partners in the venture are indifferent as to which operates the 'metal' (aircraft) when they jointly market services. The metal neutral requirement is a work in progress but holds the potential to diminish economic nationalism and alter the nation-bound nature of aviation operations.

Investigating the Exponential Age Distribution of Firms

Abstract While several plots of the aggregate age distribution suggest that firm age is exponentially distributed, we find some departures from the exponential benchmark. At the lower tail, we find that very young establishments are more numerous than expected, but they face high exit hazards. At the upper tail, the oldest firms are older than the exponential would have predicted. Furthermore, the age distribution of disaggregated industries (such as the international airline industry) is less regular and can display multimodality. Although we focused on departures from the exponential, we found that the exponential was a useful reference point and endorse it as an appropriate benchmark for future work on industrial structure.

Empirically eliciting complementarities in capabilities: integrating quasi-experimental and panel data methodologies

Resource-based researchers are finding considerable support for the association between the creation and application of organizational capabilities and competitive advantage. However, measuring organizational capabilities presents empirical researchers with substantial difficulties. This study proposes quasi-experimental research design and panel data estimation techniques for future empirical work on capabilities: this approach takes advantage of more easily measured resources transferred in the strategic factor market to elicit what otherwise would be unknowable capabilities. This approach also allows researchers to uncover how, when building organizational capabilities through factor market resource acquisitions, firms differ significantly in their ability to leverage tangible and intangible complementary resources to enhance the operational performance of acquired resources. This empirical approach is illustrated through an investigation of the US international airline industry from 1983 to 1992, during which time the industry experienced a significant transfer in the rights to operate US international routes. The results of the analysis demonstrate how quasi-experimental design, when coupled with panel data estimation techniques, is a powerful econometric strategy for researchers interested in modeling heterogeneity in firm capabilities.

The lowest of low-cost carriers: the case of AirAsia

In December 2001, just a few months after the terrorist attacks on New York and Washington left the international airline industry reeling, a new Malaysian company called ‘Tune Air’ purchased a small underperforming domestic Malaysian airline known as ‘AirAsia’ for 1 Malaysian ringgit and the assumption of 40 million ringgit in debt. Within 11 months of acquiring the company, Tune Air had fully repaid this debt and by January 2003 the company was operating six aircraft domestically. In 2006, AirAsia boasted a fleet of 35 Boeing 737-300 aircraft and eight Airbus 320 aircraft with orders for 100 more A320s (Vietnam News 2006) and was forecast to carry nine million passengers to 52 domestic and international destinations. AirAsia's meteoric rise is the result of the confluence of opportunity and skillful application of the low-cost Carrier (LCC) aviation business model. This model, which has its origins in the success of Southwest Airlines (see Gittell 2003) and Michael O'Leary's ‘Ryanair’, has been implemented around the world and consists of a number of common elements such as reduced inflight service, point to point travel, high aircraft utilization, single fleet type, ticketless passenger reservation systems and considerable functional flexibility in staffing. In this article we trace the rise of AirAsia's success and the nuances of the low-cost aviation model it has pursued. We draw upon established theory from the fields of strategy and strategic human resource management to explain AirAsia's minimalist approach to human resource management. In particular, we apply Porter's (1985) well known theory of generic business strategies and Schuler and Jackson's model linking HR practices to competitive strategy, to argue that the airline's successful quest for market cost leadership has been supported by a strict focus on Legge's (1995) ‘hard’ variety of HRM. It is further argued that while a number of the components of the Southwest Airlines model are evident, there are also significant differences in AirAsia's management of human resources. In particular, it is argued that the airline has adopted a far stronger cost minimization and ‘hard’ HRM path that is closer to Ryanair's model, which has proved highly successful for the airline in South East Asia.

Investigating the Exponential Age Distribution of Firms

While several plots of the aggregate age distribution suggest that firm age is exponentially distributed, we find some departures from the exponential benchmark. At the lower tail, we find that very young establishments are more numerous than expected, but they face high exit hazards. At the upper tail, the oldest firms are older than the exponential would have predicted. Furthermore, the age distribution of disaggregated industries (such as the international airline industry) is less regular and can display multimodality. Although we focused on departures from the exponential, we found that the exponential was a useful reference point and endorse it as an appropriate benchmark for future work on industrial structure. --