Major Airlines Research Articles

Joint Response to the House Judiciary Committee on the State of Antitrust Law and Implications for Protecting Competition in Digital Markets

Economic research establishes that market power is now a serious problem. Growing market power harms consumers and workers, slows innovation, and limits productivity growth. Market power is on the rise in a number of major industries, including, for example, airlines, brewing, and hospitals, where multiple horizontal mergers that were allowed to proceed without antitrust challenge have markedly increased concentration in important markets and facilitated the exercise of market power. Exclusionary conduct by dominant companies that stifles competition from actual and potential rivals — including nascent rivals with capabilities for challenging a dominant firm’s market power and firms with competing R&D efforts — impairs what is often the most important economic force creating competitive pressure for dominant firms. This concern exists in digital marketplaces. Platforms are often insulated from platform competition to a substantial extent by substantial scale economies in supply and demand (network effects) combined with customer switching costs. Courts have contributed to increased monopoly power through decisions that have weakened the prohibitions against anticompetitive exclusionary conduct and anticompetitive mergers. The antitrust laws, as interpreted and enforced today, are inadequate to confront and deter growing market power in the U.S. economy and unnecessarily limit the ability of antitrust enforcers to address anticompetitive conduct. Many key antitrust precedents — particularly those precedents governing exclusionary conduct — rely on unsound economic theories or unsupported empirical claims about the competitive effects of certain practices. In part for this reason, the antitrust rules constructed by the courts reflect a systematically skewed error cost balance: they are too concerned to avoid both chilling procompetitive conduct and the high costs of litigation, and too dismissive of the costs of failing to deter harmful conduct. Excessively permissive precedents and unsound or unsupported economic claims have, in turn, encouraged overly cautious enforcement policies and overly demanding proof requirements and have discouraged government enforcers and private plaintiffs from bringing meritorious exclusionary conduct cases. The statement discusses a number of legal rules that are unsupported by or inconsistent with sound economic research that have contributed to overly permissive rules. The signatories to this letter strongly believe that antitrust enforcement has become too lax, in large part because of the courts and that Congress must act to correct this problem. The statement suggests a number of reforms could be considered. We do not collectively or unanimously endorse any of these, though some of us have done so in other contexts. We do believe that Congress has a historic opportunity to identify adverse trends in judicial interpretation of the antitrust and correct problems—not just by overriding damaging precedents, but also by reshaping the antitrust laws more broadly to enhance deterrence of anticompetitive conduct.

Case on Leading Commercial Aircraft in the Brazilian Domestic Aviation Market

The Brazilian aviation market is the largest in Latin America, approximately $10 billion in revenues in 2018. Thus, the global leading commercial aircraft manufacturers compete vigorously for a larger share of the market. This article compared the performance of the leading airplanes in the domestic aviation market in Brazil, operated by the three major Brazilian airlines, through descriptive case study and market analysis on extensive archival research. Key findings pointed out the leaders within three categories: (i) more jumbo jets Airbus A320, and Boeing 737-800; (ii) c-series jets Embraer ERJ 195, and (iii) turbofan ATR-72 600, among the N=499 airplanes investigated within the three major airlines in Brazil, once the fourth competitor, Avianca Brasil, was suspended of all flights and operations by ANAC in April 2019, as a precautionary measure concerned with the safety of the operations, due to the company's filing bankruptcy. This work is useful to civil aviation managers, agents, decision-makers, students, academics, and overall practitioners. Discussion and future research compile the present article.

The Tale of the Airfreight Cartel Case

For over a decade, airlines have been subject to an EU Commission investigation and court proceedings for their involvement in an international airfreight cartel. This article provides an overview of the key elements of the case in the EU including the follow-on civil litigation. From December 1999 to February 2006, major international airlines coordinated their pricing behaviour on the airfreight market in relation to fuel and security surcharges and refusing payment of commission on surcharges. The alleged cartel was brought to light by Lufthansa under an application for immunity to the European Commission on 7 December 2005. Lufthansa’s immunity application prompted the European Commission to open an investigation into major airlines across the globe in February 2006 which concluded with a Decision on 9 November 2010 imposing fines on eleven airlines. The European Commission Decision’s concluded that the airlines conduct constituted a single complex and continuous infringement prohibited by Article 101 of the Treaty on the Functioning of the European Union, Article 53 of the European Economic Area Agreement and Article 8 of the Agreement Between the European Community and the Swiss Confederation on Air Transport. On appeal, the EU General Court annulled the 2010 Decision on 16 December 2015 due to an inconsistency between the grounds and the operative part. The European Commission nonetheless re-adopted the decision on 17 March 2017 with fines on ten airlines (one airline having paid the original fine and not appealed). **This complex litigation was extended to several EU national civil courts and currently there are ongoing private claims for damages against British Airways plc along with other Addressees of the EU Commission’s decision from Emerald Supplied Ltd. in the UK High Court and against KLM, Air France, Martinair et al. in the Amsterdam District Court. Airfreight, Cartel, SCCI (Single and continuous complex infringement), EU Commission, Decision readoption

Ground-Based Medical Services for In-Flight Emergencies.

BACKGROUND: The aim of this study was to evaluate the use of ground-based medical services (GBMS) by the cabin crew of a major South Korean airline for in-flight medical incidents involving passengers.METHODS: We conducted a survey of cabin crew to identify the anticipated use of GBMS in 2017. We compared the anticipated use to actual use as reported in cabin crew records submitted to the GBMS team and cabin crew logs from May 2013 to April 2016.RESULTS: Among 766 team leaders and assistant leaders, 211 individuals answered the questionnaire. A total of 915 instances of GBMS use were reported during the study period. There were no significant differences between anticipated and actual use in terms of the reasons for needing GBMS, with medication prescription being the most common reason. However, there were significant differences in the specific symptoms that triggered contact with GBMS. Pediatric and digestive symptoms were under-predicted, while neuropsychiatric and cardiac symptoms were over-predicted.DISCUSSION: Cabin crew tended to require GBMS to assist with pediatric and digestive conditions more often than anticipated. Furthermore, digestive and pediatric symptoms often require prescription medications.Kim JH, Choi-Kwon S. Ground-based medical services for in-flight emergencies. Aerosp Med Hum Perform. 2020; 91(4):348-351.

Size Versus Efficiency: A Case Study of US Commercial Carriers

As the demand for transportation with commercial aviation increases, each single day an airline will adjust their routes and services according to this demand. The main purpose of an airline is to increase the Shareholder Value Added (SVA) in their financial statements. Increasing the SVA value depends on high efficiency in daily flight operations. In this captioned paper, we researched five major airlines in US market American, Delta, United, Hawaiian, Jet Blue and Alaska airlines regarding to their efficiencies.The data regarding 2012 - 2016 years for ten different airline variables were obtained from Diio Mi© software. After obtaining the data, the raw data was normalized. After, the efficiency of each airline for each selected year was calculated by Data Envelopment Analysis (DEA) in Lindo© optimization software. In the Conclusion, the efficiencies of all airlines were ranked according to calculated efficiency scores.According to results, the efficiency of the airlines was relatively stable over the study time period and the airline with the most extensive fleet is in the lowest position in the efficiency ranking. We speculate based on the study results that one possible reason we obtained similar results for each year is that all the airlines in the study are major airlines and are competitors that benchmark each other in terms of efficiency and results with industrial optimization tools.

Market structure and competition of the three major airlines in China

Market structure and competition of the three major airlines in China

Network Robustness of Major Asian Airlines and the Impact of Airports’ Brokerage Roles

This study aims to evaluate the network robustness of major Asian airlines and to explore which airport types have the greatest impact on robustness. We also analyze airports’ specific brokerage roles and their impacts on the robustness of the entire air route network. We select 10 major Asian full-service airlines that operate the main passenger terminals at the top-ranked hub airports in Asia. Data is collected from the Official Airline Guide passenger route dataset for 2017. The results of the network robustness analysis show that Air China and China Eastern Airlines have relatively high network robustness. In contrast, airlines with broader international coverage, such as Japan Airlines, Korean Air, and Singapore Airlines have higher network vulnerability. The measure of betweenness centrality has a greater impact on the robustness of air route networks than other centrality measures have. Furthermore, the brokerage role analysis shows that Chinese airports are more influential within China and Asia but are less influential globally when compared to other major hub airports in Asia. Incheon International Airport, Singapore Changi Airport, Hong Kong International Airport, and Narita International Airport play strong “liaison” roles. Among the brokerage roles, the liaison role has a greater impact on the robustness of air route networks.

DEVELOPMENT OF BALANCED SCORE CARD FRAMEWORK FOR PERFORMANCE EVALUATION OF AIRLINES

The paper aims to design a multidimensional performance measurement system for airlines in order to address the complexity of balancing objectives and operational activities. The research design and methodology uses secondary data collection i.e. annual reports and business reports of airlines which are collected from the airlines own website. The paper develops and applies a customized version of balanced scorecard based on a new set of performance measures. Data on eleven performance enablers for a case study of 100 world major airlines during 2009 to 2013 is considered in the study to develop performance measurement framework of Airlines based on balanced scorecard. The Measurement of Research Construct Adopted from Wu and Laio (2014) is validated through confirmatory factor analysis using Lisrel 8.8 and developed modified set of indicators of the constructs. Further, CRITIC method is used to determine relative weights of the indicators under respective perspectives of balanced scorecard.

Airline Timetable Development and Fleet Assignment Incorporating Passenger Choice

Flight timetabling can greatly impact an airline’s operating profit, yet data-driven or model-based solutions to support it remain limited. Timetabling optimization is significantly complicated by two factors. First, it exhibits strong interdependencies with subsequent fleet assignment decisions of the airlines. Second, flights’ departure and arrival times are important determinants of passenger connection opportunities, of the attractiveness of each (nonstop or connecting) itinerary, and, in turn, of passengers’ booking decisions. Because of these complicating factors, most existing approaches rely on incremental timetabling. This paper introduces an original integrated optimization approach to comprehensive flight timetabling and fleet assignment under endogenous passenger choice. Passenger choice is captured by a discrete-choice generalized attraction model. The resulting optimization model is formulated as a mixed-integer linear program. This paper also proposes an original multiphase solution approach, which effectively combines several heuristics, to optimize the network-wide timetable of a major airline within a realistic computational budget. Using case study data from Alaska Airlines, computational results suggest that the combination of this paper’s model formulation and solution approaches can result in significant profit improvements as compared with the most advanced incremental approaches to flight timetabling. Additional computational experiments based on several extensions also demonstrate the benefits of this modeling and computational framework to support various types of strategic airline decision making in the context of frequency planning, revenue management, and postmerger integration.

Whether, when and which: Modelling advanced seat reservations by airline passengers

Motivated by the growing importance of ancillary revenues in the airline industry, we propose a statistical model for Advanced Seat Reservation (ASR). We focus on the questions of whether, when and which seats are selected by passengers. To answer these questions, we employ a discrete time duration model, combined with a multinomial choice model with varying consideration set. Unknown smooth covariate effects are used, along with seat-specific random effect terms for seat selection. The model is applied to a rich dataset of 485,279 bookings on five intercontinental routes, extracted from the complete booking database of a major European airline. We find strong evidence of ‘middle seat avoiding’ and ‘front seat preferring’ effects, along with substantial additional seat-specific heterogeneity. We also show that the probability of making an ASR depends on its price in relation to the ticket price, the distribution channel, the number of days to departure and seasonal effects. These and other insights allow for product differentiation and variable pricing in ASR for each and every seat. In addition, simple variations of the statistical model can also be used for other ancillary products—such as on-board dining and preferential baggage checking—that are purchased in the same way as ASR.

Network Robustness of Major Asian Airlines and the Impact of Airports’ Brokerage Roles

Network Robustness of Major Asian Airlines and the Impact of Airports’ Brokerage Roles

Impact of high-speed rail on market concentration and Lerner index in China's airline market

China has become the second largest air transport market in the world since 2005. Its total length of high-speed rail (HSR) tracks in operation has been greater than that of all other countries combined since 2012. HSR poses a significant challenge to the Chinese airline industry, especially on major airline routes. The impacts of HSR on two market-competition measures, namely, the Herfindahl–Hirschman Index (HHI) and the Lerner index, are examined in this study. In general, the entry of HSR had the effect of reducing market power measured by both the unweighted and weighted Lerner indexes. However, the Lerner index and HHI of the routes with parallel HSR services remained consistently higher than those of the routes without parallel HSR services.

Is a Picture Worth a Thousand Words? An Empirical Study of Image Content and Social Media Engagement

Are social media posts with pictures more popular than those without? Why do pictures with certain characteristics induce higher engagement than some other pictures? Using data sets of social media posts about major airlines and sport utility vehicle brands collected from Twitter and Instagram, the authors empirically examine the influence of image content on social media engagement. After accounting for selection bias on the inclusion of image content, the authors find a significant and robust positive mere presence effect of image content on user engagement in both product categories on Twitter. They also find that high-quality and professionally shot pictures consistently lead to higher engagement on both platforms for both product categories. However, the effect of colorfulness varies by product category, while the presence of human face and image–text fit can induce higher user engagement on Twitter but not on Instagram. These findings shed light on how to improve social media engagement using image content.

Scheduled block time setting and on-time performance of U.S. and Chinese airlines—A comparative analysis

Scheduled block time (SBT) is the duration between scheduled departure time and scheduled arrival time of a given flight. SBTs have a significant impact on airline operations and performance, and airlines consider various factors in setting them. Recent studies have proposed several models for understanding U.S. airlines’ SBT-setting behavior and have examined the contribution of SBT-setting to airline on-time performance (OTP). How airlines in different countries and regions set their SBTs and to what degree differences in SBT-setting behavior explain observed differences in OTP is still unknown. Here we develop econometric models of SBTs based on historical distributions of actual block time to reveal the differences in SBT-setting behavior between major airlines in China and the U.S. We find that Chinese airlines focus on the left tail of the distributions while the U.S. airlines consider the left tail, middle, and inner right tail. They also have different ways of accounting for taxi-out time in setting SBTs, with the U.S. focusing on historical time distributions while in China taxi-out time is based on airport category. We then perform counterfactual analysis by using one nation’s model to predict the other nation’s SBTs and the resulting difference in OTP. Results indicate that the OTP of Chinese airlines would match those of the U.S. if they followed U.S. practices in setting SBTs, while U.S. airlines would have slightly worse OTP than Chinese carriers if they set SBTs according to Chinese methods. Our findings highlight the difference in SBT-setting behavior of major airlines in China and U.S. and its contribution to OTP. The model and methods presented here may also be applied to study and compare SBT setting and its impact on OTP in other parts of the world.

Whether, When and Which: Modelling Advanced Seat Reservations by Airline Passengers

Motivated by the growing importance of ancillary revenues in the airline industry, we propose a statistical model for Advanced Seat Reservation (ASR). We focus on the questions of whether, when and which seats are selected by passengers. To answer these questions, we employ a discrete time duration model, combined with a multinomial choice model with varying consideration set. Unknown smooth covariate effects are used, along with seat-specific random effect terms for seat selection. The model is applied to a rich dataset of 485,279 bookings on five intercontinental routes, extracted from the complete booking database of a major European airline. We find strong evidence of ‘middle seat avoiding’ and ‘front seat preferring’ effects, along with substantial additional seat-specific heterogeneity. We also show that the probability of making an ASR depends on its price in relation to the ticket price, the distribution channel, the number of days to departure and seasonal effects. These and other insights allow for product differentiation and variable pricing in ASR for each and every seat. In addition, simple variations of the statistical model can also be used for other ancillary products—such as on-board dining and preferential baggage checking—that are purchased in the same way as ASR.

항공사 이용객의 체면민감성과 항공사선택속성, 고객만족 및 재 구매의도 간의 관계: FSC 항공사를 중심으로

This research explored how the social-face sensitivity of users of major Airlines effects the factors governing airline choice, and empirically analyzed the impact of those factors on consumer satisfaction and their purchase intentions. This research was based on a questionnaire survey conducted among 200 domestic airline users, and the analysis results are as follows. First, consciousness of other people’s opinions under the category of social-face sensitivity exerted a notable influence on cabin service and additional services, while exerting an insignificant influence on flight service. Second, consciousness of formality under the category of social-face sensitivity was found to be a significant influence only on cabin service, while exerting a negligible influence on flight service and additional services. Third, consciousness of embarrassment under the category of social-face sensitivity had major influences on flight service, cabin service, and additional services. Fourth, among the factors governing airline choices, flight service and cabin service were verified to have a notable influence on consumer satisfaction. Fifth, consumer satisfaction was identified as the factor that exerts a positive influence on repurchase intentions. Based on these research findings, this paper proposes the direction for an effective service and marketing of domestic airlines.

A multistage stochastic programming model for the network air cargo allocation under capacity uncertainty

We propose a multistage stochastic programming model to optimally allocate cargo to the passengers network in order to maximize profit, taking into account incomes, costs and penalties for not delivering cargo that was previously accepted. Flights have a discrete number of possible capacity outcomes, with known probabilities, and uncertainty is represented by a scenario tree. The resulting problem is a large-scale linear program, and we use decomposition techniques to solve it, leveraging on the problem structure in order to be able to find good quality solutions. Our numerical experiments are based on a real network of a major commercial airline.

The Geopolitics of Gulf Sport Sponsorship

ABSTRACT The names of two major Gulf airlines, Qatar Airways and Emirates, have saturated the European football scene for many years, sponsoring some of the most prominent European teams and FIFA itself. These state-backed airlines are also active in motorsports, rugby, cycling, tennis, golf, cricket, and equestrian sport, while several prominent Gulf elites and royal family members have recently taken over major sports franchises in Europe and elsewhere. How should we understand these far-reaching sponsorship agendas in the Gulf? What can they tell us about the politics and ethics of international sport on the Arabian Peninsula? Moving beyond the general readings of Gulf sport sponsorship as an exercise in ‘soft power,’ this article shows how these deals are strategic nodes for diverse actors in the Gulf and in the international sporting community to advance various interests: personal, political, financial, and otherwise. Informed by a critical geopolitics lens that questions the coherence of the ‘state’ as an actor, I ask what it means to say that ‘the Gulf’ sponsors sport, and more specifically investigate the relevant actors behind these sponsorship deals. To do so, this article examines regional and global political economy through a focus on three Gulf airline sponsors, Emirates, Etihad, and Qatar Airways, and three elite sports sponsors—the UAE’s Sheik Mansour, Qatar’s Nasser bin Ghanim Al-Khelaïfi, and Sheikh Nasser of Bahrain. By decentering ‘soft power’ approaches to sport that unduly emphasize the ‘state’ as an actor, this article suggests a more grounded approach to the geopolitics of sport in the Arabian Peninsula, which simultaneously acknowledges the complicity of Western actors and institutions in the rise of Gulf sports sponsorship deals in the past decade.

Robust Aircraft Maintenance Routing Problem Using a Turn-Around Time Reduction Approach

This article discusses the problem of how to efficiently build aircraft routes that better withstand potential disruptions, such as bad weather, technical problems, and passenger delays. This optimization problem is called robust aircraft maintenance routing problem (RAMRP). There are three approaches in the literature to deal with the RAMRP, such as the buffer time allocation approach (BT), the departure retiming approach (DR), and the scenario-based stochastic programming approach (SSP). Most of the previous approaches have some shortcomings in terms of fleet productivity and delay absorption. In addition, the majority of the RAMRP models overlook maintenance regulations, which result in the generation of infeasible routes. In this article, RAMRP is investigated with two main objectives. First, a novel robustness approach, called the turn-around time reduction approach (TRTR), that avoids the shortcomings of the existing approaches, is incorporated into RAMRP. The second objective is to develop an RAMRP model that simultaneously considers all maintenance regulations. The effectiveness of the proposed RAMRP model along with the TRTR is demonstrated using real data from a major Middle Eastern airline. The results reveal an improved performance of the TRTR over the BT by about 3.43%–12.20% and 2.5%–13.58%, while handling the expected propagated delay costs and fleet productivity, respectively. In addition, the results show that the TRTR is better than the SSP by about 2.07%–18.82%, while minimizing the propagated delay costs. Therefore, the TRTR has a great potential to be implemented in the actual industry.

Customer service at altitude: effects of empowering leadership

PurposeThis paper aims to examine how team-level empowering leadership related to service performance through thriving at work and how shared organizational social exchange and customer orientation moderated the latter relationships.Design/methodology/approachThe authors collected the data from 283 flight attendants and their supervisors working at a major Korean airline. Multi-level analyses were used to test the effect of empowering leadership on employee outcomes.FindingsBoth team-level empowering leadership and customer orientation were significantly and indirectly associated with service performance via thriving at work. Additionally, customer orientation significantly moderated the relationship between team-level empowering leadership and thriving at work such that the relationship was stronger when customer orientation was low rather than high. In addition, shared organizational social exchange augmented the influence of team-level empowering leadership on service performance but not on thriving at work.Practical implicationsThe findings suggest that team-level empowering leadership is more effective in enhancing thriving at work of employees when their customer orientation is low rather than high. In addition, a shared high-quality organizational social exchange augments the effect of empowering leadership on employees’ service performance.Originality/valueThis paper provides initial evidence of the interaction of team-level empowering leadership and individual¬-level customer orientation on thriving at work and service performance. Additionally, it documents the differential augmenting effect of shared organizational social exchange on the relationship between empowering leadership and these outcomes. Collectively, the findings explain why and when team-level empowering leadership relates to service performance.