Drivers of operational efficiency and its impact on market performance in the Indian Airline industry

India is considered to be one of the toughest aviation markets in the world, due to high fuel prices, overcapacity and intense price competition. It is therefore important to identify critical drivers of performance, which enable the airlines to survive and succeed in this emerging market with huge growth potential. In the current empirical study, we investigate the linkages between various performance drivers, operational efficiencies and market performance. An extensive data collection using primary and secondary sources enabled us to gather data on all the airlines operating in India, both private and public, for the period 2005–2012, on a variety of important parameters. We carried out a two-stage empirical analysis, which involved estimation of operational efficiencies during the first stage using Data Envelopment Analysis, and determination of performance drivers during the second stage using a two-way random effects GLS regression and also a Tobit model. Our findings suggest that while some of the structural and regulatory factors have an undesirable impact on airline performance, the low cost carriers in India have managed to achieve significant operational efficiencies. In addition, we find that, while cost efficiency is driven by a variety of factors, it is the technical efficiency which brings in better market performance through pricing power in the Indian airline industry.     

Effect of concentration in airline market on Spanish airport technical efficiency

This paper tries to measure the effect of airline market concentration on airport technical efficiency. With this aim, a Stochastic Frontier Analysis (SFA) is applied, estimating with a one-step procedure technical efficiency and the effect of airlines' market power on that efficiency. Results suggest that when airports are lowly concentrated increasing concentration reduces such inefficiencies. However, this effect practically disappears when airports are highly concentrated. Additionally, the government's policies to improve airports' performance seems to have a positive effect in the short run.     

Competition,market concentration,and relative efficiency of major container ports in Southeast Asia

This study aims at investigating the degree of market concentration of container ports in Southeast Asia and to associate the concentration tendency with efficient container operations. While Singapore is the busiest container port in the region, its premier position is threatened by the emergence of other container ports in neighbouring countries. Major top ten container ports in Southeast Asia are included in the analysis, and market concentration is evaluated using established measures and analytical techniques such as the Hirschman-Herfindahl Index (HHI), Gini coefficient, and shift-share analysis from 2007 to 2017. A super-efficiency model is then applied to the ports to investigate the association between shift effects and port efficiency. The HHI index indicates that the container port system in Southeast Asia has become ‘moderately concentrated’ with a score of 0.21 in 2017, contrasting with an index of 0.27 in 2007 suggesting it was ‘highly concentrated’ indicating a tendency towards de-concentration. ‘Super efficiency DEA’ results suggest that Laem Chabang and Singapore ports are ‘efficient’ exhibiting efficiency scores higher than one, while the other eight ports are ‘less efficient’. It is also found from the association of the net-shift effects and efficiency scores that Laem Chabang is the only port that is efficient and gaining market share, and, more importantly, and perhaps surprisingly, the ports gaining market share are ‘inefficient’. This study contributes to the literature not only by investigating the concentration tendency of the fast growing container port system of Southeast Asia, but also by associating efficiency evaluations with the market concentration.     

New potential hubs in the South-Atlantic market. A problem of location

Hub-and-spoke networks have become very popular in the airline industry. In this paper we study the potential hub candidates in the South-Atlantic market if a future process of liberalization creates a common air market area between South America and Europe. The analysis is based on the principal operating strategies that airlines consider when they choose their network configuration: central location in the market, local traffic at the hub cities and airport facilities. Traffic levels, great circle distances between the airports and other variables are used to analyze possible differences among airports. Other implications concerning the agents involved like gains in frequencies, time penalties and burden of capacity are also explored. Results of the analysis are used to extract some policy considerations and to stimulate discussion by government officials, air industry analysts and academics, about the necessity of the introduction of more liberalized measures in emergent markets.     

Inter-city connections in China: High-speed train vs. inter-city coach

High-speed train (HST) and inter-city coach (ICC) have been two important ground transportation modes for travelling between cities in China. They influence inter-city connections significantly. This study uses HST's and ICC's timetable data to construct networks; evaluates city centrality and city-pair connectivity to compare the hierarchical structures. The results show that the HST network shows linear distribution characteristics while ICC network presents regional “core-periphery” structure. Provincial administrative boundaries have an obvious constraint on the ICC network, while the HST community structure follows the railway lines' distribution. Finally, this study illustrates the spatial organization model and gives implications for regional transportation planning.     

Optimal purchase timing in the airline market

This paper presents general patterns in airline pricing behaviour and a methodology for analysing different routes and/or carriers. The purpose is to provide customers with the relevant information they need to decide the best time to purchase a ticket, striking a balance between the desire to save money and any time restraints the buyer may have.The study shows how non-parametric isotonic regression techniques, as opposed to standard parametric techniques, are particularly useful. Most importantly, we can determine the margin of time consumers may delay their purchase without significant price increase, specify the economic loss for each day the purchase is delayed and detect when it is better to wait until the last day to make a purchase.As an application, we analysed air fares for routes from Madrid to London, Frankfurt, New York and Paris over the course of two months, taking into account advance-purchase ticket sales of up to 30 days. We found that the consumer has a margin of 18 days prior to departure within which to purchase a ticket without any significant economic penalty.     

Frequency and aircraft size dynamics in a concentrated growth market: The case of the Chinese domestic market

Despite the explosive growth of the Chinese aviation sector and the major industry reforms undertaken in recent decades, the Chinese domestic market remains highly concentrated with a significant element of regulation and governmental control in areas such as market entry and airline fleet planning. In this study, we investigate the frequency strategies and aircraft choices of airlines operating in this concentrated growth market. Our empirical investigation suggests that airlines mainly accommodate rapid traffic growth by flying more frequently, although increased aircraft size also contributes to market expansion. We also find a negative relationship between market concentration and flight frequency. Due to the more balanced market structure resulting from mergers among leading airlines since 2002, there has been a moderate reduction in market concentration at route level, contributing to a 3.7% increase in traffic volume from 2002 to 2008. The results of our study suggest that Chinese travelers have yet to fully enjoy the benefits of market liberalization, and airports should prioritize increasing capacity related to aircraft movements over the accommodation of larger aircraft.     

Seasonality and price behaviour of airlines in the Alicante-London market

This article focuses on airline prices in the Alicante-London market. It analyzes price evolution over short periods to observe the incidence of seasonality, the types of firms involved, timetabling, types of airport, competitiveness, and variables such as the price of jet fuel and the rate of exchange used by airlines to establish prices. The paper shows the relative incidence of these variables and stresses the relevance of seasonality and competitiveness in the price strategies followed by the different types of company.     

Mobility and labour market exclusion in the Barcelona Metropolitan Region

This article analyses the relationship between daily mobility and labour market exclusion. In many areas of the Barcelona Metropolitan Region, the predominant car-based mobility model and the secondary role of public transport discriminate against non-car users when it comes to job opportunities. This territory’s capacity to generate labour market inclusion is analysed based on multi-functionality and the level of public transport services which, in turn, serve as a basis for three territorial classifications: non-excluding, semi-excluding and excluding.     

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.     

Spanish airports performance and efficiency benchmark. A PESA-AGB study

This study uses a MCDA tool to analyse and improve Spanish airports performance and efficiency. Thus, a holistic study using MACBETH (with PESA-AGB) is used. This study has never been applied before in Spanish airports. Firstly, a literature review related to this study keywords is conducted, as well as about benchmarking concept applied specifically to airports. Secondly, several methodologies in used to benchmark airports are reviewed and compared. Thirdly, airport performance and efficiency issues are addressed and described. Finally, the MCDA-MACBETH (with PESA-AGB) tool is applied to 4 Spanish airports.Spanish airports belonging to AENA transported 263, 753, 406 passengers in 2018 with an increase compared to 2017 of 5.8%. General data enables to conclude that.Spanish air transportation system is growing annually and hence there is the need to improve airports performance and efficiency, also to maintain the high levels of quality to address the growing demand. Spanish air transportation system is growing annually and is it upmost important to maintain high levels of quality to address such demand. Through this study, performance and efficiency improvements are seek within several airport key areas such as Safety and Security, Quality Service, Productivity and Effectiveness, Financial and Environment.     

Consumer structure in the emerging market for electric vehicles: Identifying market segments using cluster analysis

This paper presents results from a segmentation analysis of the emerging market for Electric Vehicles (EVs). Data has been sourced through the application of a self-completion household questionnaire distributed over two cities in the United Kingdom (UK). A two stage cluster analysis methodology has been followed to identify market segments in a dataset of UK drivers. Five unique segments have been identified in the analysis and are characterised by their preferences for EVs, socio-economic characteristics, current car details, and psychographic profiles. These segments hold a range of different EV preference levels, from those who appear unwilling to adopt an EV to those which are clearly attracted to EVs. Moreover, the features of these segments suggest that segments might be attracted to or repelled from EVs for different reasons. These results demonstrate that a significant degree of consumer stratification is present in the emerging market for EVs, with the possible implication being that policy interventions at the segment as opposed to market, level may prove more effective due to their ability to cater for the nuances of important segments.     

Liquidity effects and FFA returns in the international shipping derivatives market

The study examines the impact of liquidity risk on freight derivatives returns. The Amihud liquidity ratio and bid–ask spreads are utilized to assess the existence of liquidity risk in the freight derivatives market. Other macroeconomic variables are used to control for market risk. Results indicate that liquidity risk is priced and both liquidity measures have a significant role in determining freight derivatives returns. Consistent with expectations, both liquidity measures are found to have positive and significant effects on the returns of freight derivatives. The results have important implications for modeling freight derivatives, and consequently, for trading and risk management purposes.     

Bankruptcy protection and stock market behavior in the US airline industry

This study examines the effects of bankruptcy protection on the stock market behavior of US airlines and their domestic rivals. We find that Chapter 11 airlines experience both statistically and economically significant adverse price changes at the time of filing for bankruptcy. During the close-to-3 years after filing, however, these airlines experience significantly positive price changes. Their rivals experience significantly positive price reactions both at the time of the filing and up to 3 years post-filing. The evidence is consistent with substantial improvement in the financial condition of the bankrupt airlines after the reorganization, and with rivals gaining from the failures of other airlines.     

Modelling the preference for business charter in the cross-strait market

This paper aims at investigating business travelers' choice behavior between business charter (BC) and the business class of commercial airlines in the cross-strait market. This study applies the stated preference method and sets five scenarios with the combination of various levels of fares, waiting time, privacy and expedient clearance services and inflight communication equipment. Data were collected by purposive sampling and interviewing business travelers near the VIP centers, departure lounges, and the baggage claim areas of Taiwan Taoyuan International Airport. A sample with 420 business travelers from Taipei to Shanghai was collected. Then, the binary logit model was employed to analyze how service attributes influence Taiwanese business travelers' choice behavior between BC and business class. Estimation results indicate that fare is the most important factor. Other factors such as gender, seniority, and the number of business trips during the previous year remain significant on the probabilities of choosing BC. Additionally, five specific features of BC were set as dummy variables in the model. Those are transfer time saving, travel time controlling, client entertainment, customer visits and international conference attendance. All of them have positive effects on the preference for using BC.     

Labour market and skills needs of the tourism and related sectors in Wales

This paper assesses labour market and skills needs of tourism and related sectors in Wales to inform policy responses by government and Sector Skills Councils. Micro‐businesses, many lifestyle businesses not appreciating the links between skills, training and competitiveness, and typically not undertaking training, dominate Welsh tourism. Sectoral fragmentation challenges the development of a coherent employer perspective. Official statistics provide incomplete, inaccurate information. Employer interviews identify skills gaps and persistent recruitment difficulties with responses including downsizing, deskilling and overseas recruitment. Public sector interventions may better target employer demand for skills and training to support a destination‐level service quality strategy than training supply. Copyright © 2008 John Wiley & Sons, Ltd.     

Modelling strategic alliances in the wide-body long-range aircraft market

The wide-body long-range aircrafts market is characterized by increasing rivalry between Airbus and Boeing. One of the factors that drive their strategic behaviour is technological. We propose a technology indicator to identify conditions under which the aircraft companies have incentives to join a coalition. For this, we provide measurement of the side-payments necessary to sign a strategic alliance aimed at reducing technological barriers in the market. The results suggest that the existence of side-payments guarantees the stability of a strategic alliance if the gap in the technological level between the firms is high, or competition is through prices. For monopoly, a strategic alliance is profitable, but never stable.     

An analysis of demand uncertainty in the hotel market

This study proposes a two-step approach to investigate the impact of certain environmental variables on demand uncertainty within the hotel sector. Adopting a simultaneous-equation model and using the operation data of international tourist hotels in Taiwan, this study shows that chained hotels face less demand uncertainty than independent hotels. Additionally, hotels that are more distant from the airport or located in metropolitan areas face a significantly higher degree of demand uncertainty.     

Governance structures and the market orientation of airports in Europe's peripheral areas

This paper investigates the relationship between governance structures and the market orientation of airports. The focus is on Europe's peripheral areas, where airports tend to be publicly owned and operated as an independent entity or as part of a regional or national airport system. This paper finds that market orientation is significantly higher at independently operated airports compared to system-operated airports and that independent governance structures, market opportunities and competitive intensity have a significant positive effect on airport market orientation.     

Evaluating the solution performance of IP and CP for berth allocation with time-varying water depth

This paper considers the berth allocation problem (BAP) with time-varying water depth at a tidal river port. Both integer programming (IP) and constraint programming (CP) models are developed. Numerical experiments find that CP tends to be superior to IP when the feasible domain is small (e.g. dynamic vessel arrivals), when the restriction of the objective towards decision variables is loose (e.g. makespan, departure delay), or when the size of IP models is too large due to fine time resolution. Meanwhile, CP’s incapability of proving optimality can be compensated by post-optimization with IP, by using a simple CP/IP hybrid procedure.