The propensity of business travellers to use low cost airlines

The liberalisation of air transport regulations in the EU has led to the introduction of a number of new airlines serving short haul point to point routes (e.g. easyJet, Ryanair, Debonair, Virgin Express, Go and others). While some of these routes are clearly leisure oriented (e.g. Palma, Ibiza, Venice and Nice), anecdotal evidence suggests that a significant number of travellers are using these services for business related trips. A number of recent studies suggest that pressure is being brought to bear on business travellers to reduce travel expenditure (IATA, 1997. International Air Trasport Association, Press release, No. PS/13/9, 27 January 1997; Bender, A., Stephenson, F., 1998. Journal of Air Trasport Management 4 (2), 99–109; Mason, K.J., 1998. In: Selected Proceedings of the Eighth World Conference on Transport Research (forthcoming)). This paper details a stated preference (SP) survey of European business travellers to assess the propensity for business travellers to use short haul low cost airlines. The study assess the utility placed by travellers on price, airline reward schemes, flight frequency and in-flight comfort service attributes. Price is shown to be the most important purchase factor followed by in-flight comfort and then flight frequency. The study demonstrates the effect of company size on traveller's selection of these utilities.     

Near “real-time” estimation of excess commuting from open-source data: Evidence from China's megacities

Urban commuting has continuously fascinated scholars and decision-makers. As few people live and work in the same place, there is always excess commuting (i.e., the non-optimal or surplus work travel occurring in cities because people do not minimize their journeys to work for most residents). Traditional commuting data sources (e.g., questionnaires and census surveys) are challenged by small samples, high cost, and low spatiotemporal resolution. In contrast, the big social-sensing data (e.g., smart card and mobile phone data) only consider one or two traffic mode of a route, which is not consistent with the real-life condition. This article proposes a framework for modeling excess commuting based on open-source data of the ten most populous megacities in China. We downloaded residential points of interest (POIs) from Lianjia Real Estate website and obtained workplace POIs from China's AMAP, which is widespread used as Google map. The stratified sampling approach was employed to derive commuting pairs. Both commuting distance and time were obtained by the shortest path under public transportation from AMAP. Then, the linear programming method was employed to calculate the theoretical minimum commuting time and distance of each city. We analyzed the statistical property and spatial distributions of excess commuting and found that (1) commuting distances and time (ranging from 9.1 to18.1 km and from 44.8 to 74.3  minutes) of all ten megacities follow a left-skewed normal distribution; (2) in terms of commute cost, all cities show universal core-periphery patterns where the spatial heterogeneity of the commuting time is more significant than that of distance; (3) for each city, the excess commuting measured by time (i.e. from 0.61 to 0.79) is lower than that measured by distance (i.e. 0.68 to 0.89); and (4) the role of mixing land use, waterbody distribution, and centripetal urbanization on urban commuting distance and time is significant.     

Detecting passengers' heterogeneity on airlines’ services using SP data

In this paper, the heterogeneity in passengers' perceptions of airlines' services has been investigated by using a Random Parameter Mixed logit model. To calibrate and validate the proposed model, data from a Stated Preferences choice experiments was used. The survey was conducted online and involved the whole population of the University of Calabria (Italy). The experiments were designed by considering the main service attributes characterizing air travellers’ experience in its entirety: before, during, and after the flight. Differently from the previous studies using Stated Preferences survey, two different groups of choice experiments were designed: the former referring to before/after the flight stages, and the last referring to during the flight experience. For each group, specific attributes were considered.Final findings remark that flyers' perceptions on airline's services vary among the different service aspects and among individuals. Specifically, we found that curtesy of cabin crew, space available, temperature, cleanliness, service on board and ticket cost are attributes referring to the during the flight stage of the travel that showed heterogeneity in passenger's perceptions. On the contrary, the attributes referring to the before/after the flight stages for which we detected heterogeneity in passengers' perceptions are waiting time at check-in, delay of flight departure, and ticket cost.     

How to regulate aviation's full climate impact as intended by the EU council from 2020 onwards

The EU Council intends to regulate air transport's full climate impact (i. e., CO₂ and NO_x, H₂O, SO_x, aerosols, contrails and contrail cirrus). A likely approach is the inclusion of all climate relevant species from aviation in the European Emissions Trading Scheme. We provide a proposal for this practice and analyze the economic impacts. Modelling results indicate that the cost effects of the EU-ETS addressing CO₂ and non-CO₂ emissions will be much larger than under the current scheme. This is because under the new approach, all climate relevant species are regulated and not just CO₂. The cost effects also depend on the length and altitude of the flight. Both have consequences for the competitive environment of the airlines under the scheme. Especially the full service network carriers will have to bear a competitive disadvantage compared to airlines offering just short- and medium-haul services. Remarkably, some cost effects are in opposition to the corresponding results for an ETS for the regulation of CO₂ alone.     

A heuristic approach for solving an integrated gate reassignment and taxi scheduling problem

Capacity limitation of airport ground operation is one of the major limiting factors in air traffic operation. The congestion on the gate and taxiway causes severe delay and propagate effect on the flight schedule. This paper considers the problem of integrated gate reassignment and taxiway scheduling, in which complex constraints related to runway restriction, gate allocation and taxiway conflict are all incorporated when determining the schedule. To solve this problem, we propose a novel heuristic approach. First, all possible aircraft schedules are enumerated by disretizing the waiting time along the path. Then, the cost is evaluated for each schedule and the conflict detection is conducted to generate constraint sets. Finally, we propose a set partition model, in which each decision variable denotes a candidate schedule that takes into account the possible constraints when generated. This method is compared with a sequential method that solves gate reassignment and taxiway scheduling problem separately. Computational results highlight the strength of our method.     

Changes in airport operating procedures and implications for airport strategies post-COVID-19

Covid-19 is demanding a lot of changes in the realm of our daily lives. The aviation industry is also facing unprecedented changes in the management environment. Financial tensions across the sector are rising. This study suggests that the airport strategy's direction focusing on commercial revenue management. After Covid-19, safety and hygiene will be the top priority. As a result, changes in airport operating procedures are inevitable. The most noticeable difference will be the strengthening of the verification process for passengers' health conditions. Dwell time increase can be the by-products. This study identifies a dwell time increase has a more significant impact on increasing the existing purchasers' spending than creating new buyers. Airport operators can introduce a service differentiation perspective, such as a dedicated service, to utilize the current buyers' dwell time more faithfully. Also, the rise of online channels requires airport operators to change sales strategies, reinforcing emotional promotion to stimulate impulse buyers' willingness-to-buy. Before Covid-19, there was little effort to reconcile operation policies and commercial revenue despite the growing importance of revenue management. However, now it is time to change. Pre-Covid-19, passengers were advised of using off-airport processes, such as online check-in and mobile boarding passes. Now, getting passengers to the airport quickly and securing their dwell time can be financially more beneficial. It is necessary to incorporate the commercial revenue perspective into operation policies post-Covid-19 actively. Our finding indicates that even a passenger with solid purchasing power may lose the purchasing intention when assigned to an unfavorable gate or terminal. Airport operators need a better understanding of passenger and flight characteristics when determining operation policy, such as gate allocation or membership services.     

Airline cost changes: To what extent are they passed through to the passenger?

Since the start of the Millennium airline costs have been highly volatile, mainly due to large fluctuations in jet fuel prices. An important question for airlines and regulators is whether airlines are able to pass through cost changes to their prices. Little empirical evidence on the pass-through of costs exists. In this paper, we investigate which pass-through rates are most likely. According to economic theory, the pass-through of costs depends strongly on the type of cost increase (firm-specific or sector-wide) and market conditions (monopoly, oligopoly, perfect competition). In monopolistic markets, the shape of the demand curve also matters (linear, constant elasticity, log, power function). A pass-through rate of 100% is often assumed based on the reasoning that the aviation sector is highly competitive. We analyse market concentration in all airline markets in the world, and generally find a high level of concentration. Additionally, different airlines offer different products based on a variety of factors, including service, flight frequency, legroom, bags allowed on board, flight time and transfer time. Therefore, most aviation markets can be characterised as differentiated oligopolies. As airlines choose their quantities first (flight schedules) and adapt their prices to demand (yield management), we consider the Cournot model the best choice. In such markets, firmspecific cost changes will be passed through by a rate of less than half while sector-wide cost changes are passed through by a rate of more than half. In specific situations, the pass-through rate may be different. Examples are limited airport capacity (congestion), cross-subsidization, and the extent to which there is a level playing field.     

The impact of driving status on out-of-home and social activity engagement among older Canadians

The loss of a driver's license can significantly limit a person's ability to engage in desired activities outside their home, which may, in turn, jeopardize their independence, well-being, and quality of life. This research seeks to quantify the impacts of driving status on out-of-home and social activity engagement among non-working older (≥ 65 years) Canadians, and the distribution of these impacts across socio-demographic and self-reported health domains. Nationally representative cross-sectional time diary data were used to measure the participation rates and daily durations of out-of-home and social activity engagement among non-working older Canadians who have a driver's license (i.e., drivers) and those who did not (i.e., non-drivers). Results indicate drivers were, on average, more than twice as likely to participate in out-of-home and social activities compared to non-drivers. However, the mean durations of activity engagement, among the participant sub-sample, appear largely invariant to driving status. Among the socio-demographic and self-reported health factors affecting out-of-home and social activity engagement, geography appears the most influential for participation rates and durations, particularly for non-drivers who live in small towns and rural areas. Due to demographic trends that suggest an increasing number of older Canadians will be unable to drive, communities should expect a commensurate increase in demand for alternate mobility options, which will inevitably require a variety of context-specific accessibility strategies.     

Airport choice and flight connectivity among domestic and international passengers – Empirical analysis using passenger movement survey data in Japan

This paper presents an empirical analysis of airport choice and passenger movement on international flights from local cities in Japan to Narita and Haneda Airports in the Tokyo metropolitan area. This is the first study to evaluate airport choice behavior in Japan empirically by using the micro data collected by Japan’s Ministry of Land, Infrastructure, Transport and Tourism in 2010 (i.e., when time slots for international long-haul flights were first assigned at Haneda). The analysis confirms that flight connectivity is a crucial element in airport choice.Further, Japanese airlines and their associated alliances are able to attract passengers arriving from local cities by using Haneda airport. Above all, we find that the introduction of long-haul international flights from Haneda has met the needs of a number of passengers arriving from local cities in Japan owing to the convenience of the domestic flight network, especially for business purpose passengers.     

Measuring the LCC effect on charter airlines in the Spanish airport system

Using a robust transfer function model methodology, the present paper seeks to offer empirical evidence regarding the size and type of effects that low-cost carriers (LCCs) have had on traffic for charter carriers (CCs) in the Spanish airport system by geographic market. We show an unmistakable substitution relationship between CCs and LCCs in the latter's typical niche markets, national and European flights, while there is no reaction from the CCs in the segment of international flights outside the EU. Furthermore, substitution effects are smaller between CCs and LCCs on the domestic level than effects between LCCs and network carriers (NCs) and slightly larger on the European level. Lastly, CC traffic's different sensitivity to terrorist attacks, day of the week, air accidents and the economic crisis is also evident. CCs should therefore be considered an independent category that warrants individualized analyses.     

Does a reward program affect customers’ behavioural intention of visiting the airport? A case study of Singapore Changi Airport

An understanding of the behavioural intentions of customers in visiting airports may help airport management to boost airport retail revenue (i.e. non-aeronautical revenue) by increasing customer spending at the airports. This study aims to examine the connection between airport reward programs and customers' behavioural intentions of visiting the airport, attempting to bring some benefits and credits for implementing reward programs in the airport sector by using Singapore Changi Airport as a case study. Two types of customer behavioural intentions (i.e. time spent at the airport and various purposes of visiting the airport) were investigated in the study to examine the effects of Changi Airport's reward program (i.e. Changi Rewards). An on-line survey was conducted, and the participants' responses were analysed via a structural equation modelling approach. The results showed that the attractive benefits of Changi Rewards could have a positive influence on arousing customers' intentions to engage with the programme. In addition, customers' intentions to engage with the programme can have a positive effect on increasing passengers' time spent at the airport and inducing customers to visit the airport for leisure purposes. Managerial implications to the airport sector are discussed.     

The benefits of tankering considering cost index flying and optional refuelling stops

This work presents the application of a fuel tankering strategy to an airline considering cost index flying and the possibility of using intermediate optional refuelling stops. The tankering solution was based on integer linear programming algorithm using a network modelling strategy. Two methodologies have been used to calculate mission performance according to the aircraft cost index, the first is the complete method where every flight phase (climb, cruise and descent) are optimized according to the cost index. This methodology has the disadvantage of being a slow process as the optimization of every flight leg is time consuming. The second approach is a simplified method, which is based on the Breguet equation and has the advantage of being a quick solution for an initial tankering assessment analysis. A comparison is made between these two methodologies on a simulated multi-stage flight mission demonstrating the validity of this simplified approach. The benefits of a tankering flight using cost index and refuelling stops are illustrated by a study case of a network linking six airports and seventeen optional refuelling stops with different fuel costs. The results from the optimized flight route show a 3% cost reduction at the specific multi stage mission example when compared to a more traditional dispatch approach without the use of the fuel tankering strategy.     

Comparing strategies for addressing delivery shortages in stochastic demand settings

In logistics networks involving one supply point (depot) and several geographically dispersed demand points (e.g., retail stores), delivery shortages will result if the design of delivery routes ignores random period-to-period fluctuations in customer demands. Delivery shortages may be costly enough for the depot to seek strategies to prevent them. A requirement for rational comparison of strategies is quantifying their effects on total supply chain costs. Accurate distance prediction models are developed to help satisfy this prerequisite for the transportation cost element. These models are integrated into a comparison of strategies on the basis of how these strategies affect inventory and transportation. The focus of findings from the comparison involves identifying the information cost thresholds for accepting/rejecting a demand-responsive strategy. The study's implications for choosing a strategy are presented. ©     

Grounded: Characterising the market exit of European low cost airlines

The aim of this paper is to undertake a comprehensive study of low cost carrier (LCC) market entry and exit in Europe between 1992 and 2012. In the 20 year period between 1992 and 2012, 43 LCCs have taken advantage of the progressive liberalisation of the European aviation market and commenced scheduled flight operations within the continent. Of these 43, only 10 remain operational, a failure rate of 77%. This paper contributes to extant literature on LCCs by examining the market entry, business practices, operating longevity and fate of failed operators to characterise European LCC market exit. Drawing on the findings of a detailed continental-wide study, the paper identifies that an airline's start-up date, the nature and size of its operation and the size and composition of its aircraft fleet are key factors which influence LCC success and failure. The implications for both European and emerging LCC markets are discussed.     

Evidence of passenger preferences for specific types of airports

Studies of air travel choice behaviour increasingly make use of data collected through stated choice surveys. Here, we put forward the hypothesis that when making their choices in such surveys, respondents may complement the information presented to them by additional attributes. Specifically, we look at characteristics linked to airport size and breadth of service, as well as the proximity to a respondent's home. Our findings in a discrete choice analysis suggest that, all else being equal, respondents prefer larger to smaller airports while having a preference for the airport closest to their home. This could suggest that even though respondents associate a higher likelihood of delay and other inconveniences with larger airports, there is a perception that if things go wrong (e.g. flight cancellations), the backup options at larger airports (e.g. replacement aircraft) are superior to those at small or regional ones.     

Port economic cost functions: A service perspective

Ports provide services rather than producing physical products. However, port cost functions specify port cost as functions of physical products, e.g., port cargo throughput long-run cost is a function of port resource prices and cargo throughput (a physical product). In comparison, port cargo service long-run cost is a function of port resource prices, cargo service and shipper cargo received. The shipper provides cargo that is serviced by the port. A service cannot be touched and its user is involved in its provision. This paper derives port cost functions for which port outputs are “service outputs”, e.g., cargo, vessel and vehicle services.     

Models for relief routing: Equity, efficiency and efficacy

In humanitarian relief operations, vehicle routing and supply allocation decisions are critically important. Similar routing and allocation decisions are studied for commercial settings where efficiency, in terms of minimizing cost, is the primary objective. Humanitarian relief is complicated by the presence of multiple objectives beyond minimizing cost. Routing and allocation decisions should result in quick and sufficient distribution of relief supplies, with a focus on equitable service to all aid recipients. However, quantifying such goals can be challenging. In this paper, we define and formulate performance metrics in relief distribution. We focus on efficacy (i.e., the extent to which the goals of quick and sufficient distribution are met) and equity (i.e., the extent to which all recipients receive comparable service). We explore how efficiency, efficacy, and equity influence the structure of vehicle routes and the distribution of resources. We identify trends and routing principles for humanitarian relief based on the analytical properties of the resulting problems and a series of computational tests.     

Optimizing EV-based P&R subsidy policies for commuting corridor based on cross-nested logit model

The promotion of electric vehicles (EVs) is restricted by cruising range limitation and charging station deficiency. Given the mature development of Park and Ride (P&R) mode, which is used in many cities worldwide to attract more travelers to use public transit, a new travel mode, i.e., EV-based P&R is introduced as an alternative for commuters’ daily travel. This seems quite attractive to expand the use of EVs and further increase their market share. This paper aims to investigate the impact of EV-based P&R introduction on travel mode choice along commuting corridor, and further aid in the optimal subsidy policies decision for the government. A bi-level model is proposed to model the presented problem. The lower level describes commuters’ joint mode and transfer choice behavior through a cross-nested logit (CNL) model, while the upper level minimizes the system cost. A genetic algorithm is developed to solve the formulated model with a partial linearization algorithm for solving the lower level model. And a numerical example is then used to demonstrate the effectiveness of the methodology and illustrate how the network flow pattern reshapes due to the introduction of EVs into the P&R mode and the change of corresponding subsidy policies. As the results show, improving the EV hardware, applying the intelligent supporting service system, developing new technologies for EV fast charging, appropriately improving the parking space capacity, and increasing the parking fee of transfer stations near the central business district (CBD) are all helpful to save the social cost and promote the usage of EVs.     

How uncertain is the future of electric vehicle market: Results from Monte Carlo simulations using a nested logit model

Plug-in electric vehicles (PEVs) are widely regarded as an important component of the technology portfolio designed to accomplish policy goals in sustainability and energy security. However, the market acceptance of PEVs in the future remains largely uncertain from today's perspective. By integrating a consumer choice model based on nested multinomial logit and Monte Carlo simulation, this study analyzes the uncertainty of PEV market penetration using Monte Carlo simulation. Results suggest that the future market for PEVs is highly uncertain and there is a substantial risk of low penetration in the early and midterm market. Top factors contributing to market share variability are price sensitivities, energy cost, range limitation, and charging availability. The results also illustrate the potential effect of public policies in promoting PEVs through investment in battery technology and infrastructure deployment. Continued improvement of battery technologies and deployment of charging infrastructure alone do not necessarily reduce the spread of market share distributions, but may shift distributions toward right, i.e., increase the probability of having great market success.     

Assessing the effects of access policies on travel mode choices in an Alpine tourist destination

Alternative Transportation Systems (ATS) can contribute to an overall reduction of visitation-related impacts in natural areas if their design and management are informed by a clear understanding of the factors influencing visitors’ mode choice. This is particularly relevant in areas served by multiple alternative transportation options at different locations because mode choices in this case can largely modify visitation patterns. This study investigated mode choices in a popular hiking area of the Dolomites (Italian Alps) that is reachable by car, bus, and lifts (i.e. cable car and chairlift). A stated preference survey was used to elicit visitor sensitivities to a series of management and experiential conditions, while simulation was applied to predict mode choice as a consequence of various access policies. While indicating lift as the most preferred transportation option, results suggest the existence of two main kinds of visitor: one preferring road-accessible trailheads and another preferring lift-accessible trailheads. These two kinds seem to reflect a traditional view (i.e., very sensitive to fares, road closures, and overcrowding) and a more modern one (i.e., moderately sensitive to lift fares, relatively insensitive to crowding), respectively. Simulations performed for both groups led to four management principles: road traffic is not reduced significantly without disincentives for car use; overly cheap lift fares are counterproductive; fare-frequency trade-off is key to ensure adequate bus ridership within both groups; and road closures may be comprehensively more effective than road tolls. The findings of this study may support managers and administrators in setting up access policies that better preserve natural resources and visitors’ recreational experience.