Aircraft selection by applying AHP and TOPSIS in interval type-2 fuzzy sets

The selection of the appropriate aircraft can bring competitive advantages to airlines, however, there are a number of factors which introduce a degree of uncertainty to the selection process. By removing this uncertainty, airlines can increase their chances of achieving their long-term goals. New Multi-Criteria Decision Making (MCDM) methods provide decision-makers with a satisfactory solution for choosing suitable aircraft. Therefore, we focused on the multi-dimensional evaluation and selection of the most suitable commercial aircraft alternatives by using new MCDM method. This article provides decision support to airline planners on the selection of commercial aircraft under uncertainty. In the study, unlike other studies in the literature on aircraft selection, the model presented here uses an Interval Type-2 Fuzzy Analytical Hierarch Process (IT2FAHP) and Interval Type-2 Fuzzy Technique for Order Preference by Similarity to an Ideal Solution (IT2FTOPSIS) hybrid methods. The proposed model for aircraft selection allows commercial airlines to evaluate the aircraft in terms of specific criteria: economic performance, technical performance, and environmental impact, and, as a result, it helps decision makers select appropriate aircraft in an uncertain environment. In addition to use by commercial airlines, the methods in the study can also be applied to the selection of training aircraft, cargo aircraft and military aircraft. Our findings show that the Airbus A321neo is the most suitable commercial aircraft in terms of technical aspects, economic aspects and environmental aspects for airlines.     

Effects of internal resources on airline competitiveness

This article examines the performances of 114 major international airlines between 1987 and 2010 using the resource-based theory. Results show that intangible resource is the most important resource among the human, physical and intangible resources at the aggregate industry level. In addition, successful airlines need to be able to provide an adequate level of service at relatively low cost. Nonetheless, some airlines enjoy higher profits than the others due to the country-specific differences arising from the bilateral open skies agreement between countries, the geographical location of the airline hub etc. There are also evidences suggesting an increasing consumer acceptance of new airlines, which connote that established airlines cannot be complacent. Following the emergence of budget airlines that provide point-to-point service to short distance destinations, full legacy carriers could differentiate themselves by offering direct connections on long-distant flights.     

Voluntary overbooking in commercial airline reservations

This paper studies a voluntary overbooking model under rational expectation equilibrium to promote cooperation between customers and airlines, maintain goodwill of customers, and maximize the expected total returns to airlines. A decision tree analysis is constructed for both customers and airlines. Sensitivity analysis is conducted in both realistic and simulated no-show random variables for validation. The findings suggest considerable mutual benefits associated with a ‘voluntary overbooking’ policy that emphasizes mutual cooperation between passengers and commercial airlines. The main underlying assumption of the paper is that customers are willing to provide valuations to airlines seeking volunteers for overbooking. The originality of the proposed model is the incorporation of elements of the Rational expectations hypothesis into classical overbooking models gleaned from the literature.     

Student’s vacation travel: A reference dependent model of airline fares preferences

This article reports the results of student vacation travel choice analysis using a reference dependent model of airline fare preferences. Findings suggests, as expected, that the preferences/utility decreases with increasing levels of cost. The evaluation of the airfare, however, becomes significantly more critical in the regime were low-fare airlines are more expensive than the regular airlines, meaning that price sensitivity for low-fare airlines is higher in this case. Part-worth utility functions for airfare as part of a more general portfolio model of vacation decisions of students suggest that indeed a reference dependent model captures such regimes in utility space.     

A conceptual business model framework applied to air transport

The adoption of business models in different sectors has been disseminated exponentially as a result of organizational strategies, allowing the identification and definition of paths to be followed, and enhancing capture and value creation for consumers and the enterprise. In the case of the air transport sector, specifically the airlines, the proposition of new business models can contribute to creating competitive advantage. This study develops a conceptual business model framework applied to air transport, which prioritizes key components identified in the literature for designing business models for airlines. With the exploration of different aspects of business models and the identification of the main models used by airlines, the results demonstrate the need for the adoption of new models in this sector.     

A comparative analysis of economic performance of US commercial airports

There have been various agreements between the US commercial airports and the airlines each of which has defined how the risk, responsibilities, and reward of running an airport should be shared among them. The airport–airline financial relationships at the nation’s commercial airports are based on four basic approaches: the residual cost, the compensatory, the hybrid, privatization approaches. In this paper, the authors provide a comprehensive review of airport–airlines financial agreements, and develop an analytical model to measure the financial performance of the US commercial airports. In general, compensatory airports have had a higher marginal contribution to profitability than residual airports.     

Diversity in airline alliance portfolio configuration

Alliances in the airline industry operate as a basic strategy to stimulate competition and both the number and the types of alliances have increased over time. Each airline maintains alliances simultaneously with a variable number of partners. The set of airline's alliance partners constitutes its alliance portfolio. A central theme of these portfolios is the way in which partner selection improve performance. Is the alliance portfolio configuration based on either similar or different partners? We examine how the differences can arise from differences between the partners themselves, from resource complementarity, and from the partners structural positions in the network. The relations between these types of differences and whether they affect firm performance are studied. Codeshare alliances established between airline companies at a global level are analyzed to establish their effects on performance. In particular, the study comprises 135 alliance portfolios all of which from major airlines. The results suggest that structural homogeneity and complementarity improve performance and that alliance portfolio diversity favors network resource complementarity.     

Organizational learning,operating costs and airline consolidation policy in the Chinese airline industry

This study investigated and reviewed organizational learning in the Chinese airline industry, which is dominated by state-owned or state-controlled airlines. This empirical research focused on the extensive scale of airline mergers and acquisitions among 12 Chinese airlines for the period of 1996–2014. This research aims to make a contribution towards addressing the general lack of academic reflection on the impact of organizational learning on airline performance during and after the completion of mergers and acquisitions. The empirical findings of this paper suggested that there was, in general, organizational learning experienced by Chinese airlines from their prior operating experience in improving operating costs. However, airline mergers in 2001/02 increased airlines' average operating costs, as most state-owned airlines are notorious for poor cost management. Significantly, the performance improvement among Chinese airlines was found during the post-merger periods in this study, and the increase in Chinese airlines’ operating costs during the post-acquisition periods due to the limited integration of 2010 acquisition compared with the 2001/02 mergers.     

Sustainable airline strategy using portfolio theory: A case study of remote islands in Japan

The thin and fluctuated market generally characterizing air transport to remote islands involves greater business risks for airlines. But air transport often plays an important role in the life and economy of such islands. This paper applies portfolio theory to explore how it can reduce business risks to air transport in this context. The concept of Tourism β is introduced to represent the risk associated with each island market relative to overall tourist demand in the region looking as at 31 airports on remote islands in Japan. The results showed that a well-diversified portfolio of multiple remote islands could reduce the score commercial risks for carriers.     

How airlines learn from airline accidents: An empirical study of how attributed errors and performance feedback affect learning from failure

This research examined organizational learning factors by asking whether airlines learn more from internally or externally attributed causes of airline accidents. Our dependent variable, organizational learning, was defined as a decrease in subsequent airline accident rates. To test the moderating effect of performance feedback, we predicted that performance relative to aspiration level would negatively moderate the relationship between the attribution of airline accidents and the subsequent accident rate. Overall, the findings of this research revealed that the greater the proportion of internally attributed causes is, the more likely it is that an airline will learn from its accidents and will experience a lower subsequent accident rate. In addition, our findings regarding the moderating effect of performance feedback showed that airlines performing below their aspiration levels are more likely to learn from internally attributed causes of accidents and will therefore experience a lower subsequent accident rate. We conducted this investigation by collecting data from the U.S. National Transportation Safety Board (NTSB) database for all of the accidents (accidents and incidents) experienced by U.S. commercial airlines during the 1990–2014 period. Our research findings provide implications for future studies that discuss the factors affecting organizational learning.     

Towards a maturity model for big data analytics in airline network planning

The evaluation, acquisition and use of newly available big data sources has become a major strategic and organizational challenge for airline network planners. We address this challenge by developing a maturity model for big data readiness for airline network planning. The development of the maturity model is grounded in literature, expert interviews and case study research involving nine airlines. Four airline business models are represented, namely full-service carriers, low-cost airlines, scheduled charter airlines and cargo airlines. The maturity model has been well received with seven change requests in the model development phase. The revised version has been evaluated as exhaustive and useful by airline network planners. The self-assessment of airlines revealed low to medium maturity for most domains. Organizational factors show the lowest average maturity, IT architecture the highest. Full-service carriers seem to be more mature than airlines with different business models.     

A scenario planning approach for the flood emergency logistics preparation problem under uncertainty

This paper aims to develop a decision-making tool that can be used by government agencies in planning for flood emergency logistics. In this article, the flood emergency logistics problem with uncertainty is formulated as two stochastic programming models that allow for the determination of a rescue resource distribution system for urban flood disasters. The decision variables include the structure of rescue organizations, locations of rescue resource storehouses, allocations of rescue resources under capacity restrictions, and distributions of rescue resources. By applying the data processing and network analysis functions of the geographic information system, flooding potential maps can estimate the possible locations of rescue demand points and the required amount of rescue equipment. The proposed models are solved using a sample average approximation scheme. Finally, a real example of planning for flood emergency logistics is presented to highlight the significance of the proposed model as well as the efficacy of the proposed solution strategy.     

Intangible resources of competitive advantage: Analysis of 49 Asian airlines across three business models

Without sustainable competitive advantage firms have limited economic reasons to exist and will decline. Competitive advantage concerns the factors which provide competitive strength. This paper is based upon the resource-based view which considers firm resources to be heterogeneous and which believes that firms only have a small bundle of core resources irrespective of their overall performance. This research establishes the role of 36 intangible resources for 49 Asian airlines across three business models: network airlines; low-cost subsidiaries from network airlines; and low-cost carriers. It uses the VRIN framework which examines whether resources are valuable, rare, inimitable, and non-substitutable. Research participants distribute points between their chosen seven resources according to their perceived role in firm performance. Resources which meet all four requirements of VRIN are considered core competences and sources of sustained advantage. Across all 49 Asian airlines, the top-three most important resources of advantage are slots, brand, and product/service reputation. While these core resources are predictable, they have not previously been proven within the context of airlines, let alone geographically and by airline model. Results show that the core bundle of resources vary for each model, which helps to explain the difference in performance across models, and that some resources which were expected to be high-ranking, such as organisational culture and customer focus, were not.     

Real option analysis of aircraft acquisition: A case study

This paper demonstrates that aircraft acquisition by airlines may contain a portfolio of real options (flexible strategies) embedded in the investment's life cycle, and that if airlines rely solely on the static NPV method, they are likely to underestimate the true investment value. Two real options are investigated: i) the “shutdown-restart” option (a carrier may shutdown a plane if revenues are less than costs, but restarts it if revenues are more than costs), and ii) the option to defer aircraft delivery. We quantify the values of these options in a case study of a major U.S. airline. The economic insight could help explain observed capital expenditures of airlines, and serve as a rule of thumb in evaluating capital budgeting decisions. A compound option (consisting of both the shutdown-restart and defer options) is also analyzed.     

A hybrid fuzzy MCDM approach for mitigating airport congestion: A case in Ninoy Aquino International Airport

In this paper, we introduce the application of an integrated fuzzy multi-criteria decision-making (MCDM) model to mitigate airport congestion which affects the on-time performance of airlines, operational reputation of airports, and air travel experience of passengers. In a classical approach, when congestion occurs at the destination airport while the aircraft is en-route, an air traffic flow management action is prompted for implementation. In selecting the most suitable action in the event of airport congestion, the decision must reflect the multiple criteria nature of the problem as well as the uncertainty and vagueness associated with the decision-making process; thus, an integrated fuzzy MCDM is adopted. The applicability of the proposed approach is demonstrated in a case study at Ninoy Aquino International Airport. It is found that stakeholders of the commercial aviation industry favored to apply rerouting, among other actions, as this satisfies aviation safety as the most prioritized criterion.     

Safety climate of a commercial airline: A cross-sectional comparison of four occupational groups

This study aimed to assess the safety climate of a major commercial airline from the Asia–Pacific region using a self-developed online survey instrument. Besides getting an holistic view of the safety culture of the company at the time of the survey, separate analyses were conducted among different occupational groups and within each group to test if occupations and employment experience had any effect on employees' perception of safety climate. The results of the analyses suggested that the overall safety climate of the airline was generally robust across different occupations. Statistical analysis demonstrated that effect of employment history was significant across different occupations. Variance in safety climate among the different occupational groups was also identified in the analysis, indicating the possible existence of sub-cultures within each group. In addition to providing a “snapshot” of the safety culture of the subject airline, this study has the potential of being used as a safety culture analysis template, with certain customizations, by other airlines/organizations.     

A model for projecting flight delays during irregular operation conditions

On-time performance of airlines schedule is key factor in maintaining current customer satisfaction and attracting new ones. This requires management of the different operation resources (crew/aircraft) to ensure their on-time readiness for each flight in the planned schedule. However, flight schedules are often subjected to irregularity. In particular, weather accounts for nearly 75% of system delays. Due to the tight connection among airlines resources, these delays could dramatically propagate over time and space unless the proper recovery actions are taken. This paper presents a model which projects flight delays and alerts for possible future breaks during irregular operation conditions. The results of applying the model at the operation control center of a major airlines company in the US are presented.     

Paternalistic leadership and cabin crews’ upward safety communication: The motivation of voice behavior

Being the frontline operators in the airline industry, flight attendants constantly obtain and collect first-hand information from their interactions with passengers and other crew members. Their experiences and observations may contribute greatly to airlines' safety management and policy making. It is thus critical to learn how to enhance cabin crews' voice behavior, particularly communicating safety related issues upward through specific leadership styles. The current research aims at the flight attendants working for Taiwanese international airlines. The cabin crew department managers' paternalistic leadership style is adopted to observe how it may trigger cabin crews' different types of voice behavior. This research addresses the following two major questions: 1. What is the motivation for cabin crew to conduct upward safety communication? 2. How does department managers' paternalistic leadership style impact cabin crew's voice behavior? Regression analysis is used to analyze the empirical data collected by the questionnaire survey. The results are applied to provide airlines with practical references for constituting human resource management policies, and the findings also enhance existing literature regarding management applications and employees voice behaviors.     

Estimating the sensitivity of small airport catchments to competition from larger airports: A case study in Indiana

An accurate estimation of airport catchment area enables airlines and airport operators to make informed decisions and to target potential markets precisely. This study uses the state of Indiana as a case study to estimate traffic leakage from the local airport, Indianapolis International Airport (IND), to two large hub airports in Illinois, the neighboring state of Indiana, namely Chicago O'Hare International Airport (ORD) and Chicago Midway International Airport (MDW). By using a decision making model that considers flying cost and access cost, this study simulates from local passengers' perspective which origin airport delivers the most cost effective flight itinerary. Using the top 20 routes of IND in 2018 as model inputs, the catchment area of two Chicago based airports in Indiana with variable coverage is plotted for different traveling scenarios. The analysis shows that an airport catchment area is sensitive to location, service level and traffic volume of competing airports nearby, as well as purpose of travel (business or leisure), number of travelers in a group (single, couple, family or multiple), length of trip, destination (domestic or international), preference of airlines (network carrier or budget carrier), and frequent flyer program status (premier member or general member). These findings could be valuable to all three aforementioned airports as well as airlines serving these airports when allocating operational and marketing resources. More importantly, this study creates a generic model that could be used by virtually any airport to estimate scenario-based catchment area using readily available itinerary and spatial data without resorting to expensive passenger surveys.