The effect of frequent flyer programs: A case study of the Korean airline industry

Frequent flyer programs are important for airlines in Korea in their marketing of services. This paper develops a conceptual model to investigate the effect of such programs by examining the relationships them and, airline service quality, pricing, passenger satisfaction, airline image, and airline selection. Path analysis is used to analyze data collected from Korean international air passengers. The results show that frequent flyer programs have direct and indirect effects on pricing, passenger satisfaction, airline image, and airline selection. In addition, their effects on passengers' selections are significantly different between Korean and foreign airlines.     

Evaluating green supply chain management among Chinese manufacturers from the ecological modernization perspective

Green supply chain management (GSCM) has become an emergent ecological modernization tool amongst Chinese manufacturers to balance environmental performance with productivity and business performance gains. Ecological modernization at the society level is influenced by restructuring policies and regulations. Some of these policies and regulations in China are focusing on enhancing energy savings and pollution reduction (ESPR). Based on a survey of 376 responses, we investigate whether different Chinese manufacturer clusters varying in their extent of implementing GSCM exist from this ecological modernization perspective. We also examine if Chinese manufacturers’ awareness of domestic and international environmental ESPR-oriented compliance is related to GSCM implementation and whether a mediating effect of regulatory pressure plays a significant role. The results highlight the varying pace of Chinese manufacturers to ecologically modernize with GSCM practices and the significance of regulatory pressure to diffuse the practices adoption by Chinese manufacturing industry. Implications of this research go beyond the manufacturers investigated in this study where similar occurrence of these relationships may exist in other regions.     

Evaluating competitiveness of air cargo express services

This paper explores the relative importance of factors that influence the adoption of air express delivery service, and evaluates the competitiveness of air cargo express carriers in the Korean market. Our AHP analysis shows that accuracy and promptness are the two most influential factors to competitiveness, and that DHL is most competitive in the Korean market, followed by FedEx, TNT, EMS, and UPS. We further examine both the factor importance and carriers’ competitiveness from the perspective of service users. While accuracy and promptness remain as important factors, price becomes the most important factor. Finally, an importance–performance analysis for each carrier is conduced, and managerial implications are drawn.     

Cooperative approaches to managing air traffic efficiently—the airline perspective

After decades of operating in a traditional customer–supplier relation, airlines and airports have started to discover the potential of cooperation strategies. Here we present an approach of how to identify possible fields for cooperation between the two players and give examples for proven successful joint development initiatives. In more detail we elaborate on two specific case studies, targeting at two entirely different kinds of actors. The field of air service development (ASD) enables airports to attract additional traffic in order to better utilize existing capacities. Collaborative decision making (CDM) on the other hand is an approach supporting the optimized utilization of congested airport infrastructure and air space. We conclude that even with low investment needs substantial benefits can be generated for the cooperating parties, opening room for further future cooperation projects.     

Challenges to domestic air freight in Australia: Evaluating air traffic markets with gravity modelling

With two of the busiest air traffic corridors globally, Sydney-Melbourne (SYD-MEL) and Sydney-Brisbane (SYD-BNE), very liberal open skies agreements, and the world's most isolated large city in Perth, air freight in Australia should be destined for substantial growth, but has in contrast to other regions such as the US not yet materialised. This paper identifies challenges surrounding domestic air freight markets in Australia and compares the provision of road vs air freight services utilising gravity modelling methods. Our findings suggest the impedance of domestic air freight services in Australia is greater for regional areas between the primary cities (such as Canberra, between Sydney and Melbourne) than remoter areas (such as Cairns in Northern Australia). Our models show further that in addition to distance, air freight capacity on any of our analysed routes is despite being demand-pulled in terms of GDP dependency significantly attuned to factors at both the origin (in particular domestic trade capability, i.e. manufacturing and logistics) and destination.     

Travel time use and its impact on high-speed-railway passengers' travel satisfaction in the e-society

The availability of wireless networks and the pervasive use of mobile ICT devices have allowed passengers to conduct various e-activities during journeys. These various e-activities, in turn, may change people's conventional perception of travel time from being “wasteful” and “unproductive,” to “desirable” and giving rise to satisfaction. Journeys on high-speed railway (HSR) is particularly relevant for transport researchers to probe into this question because of its characteristics of being medium to long-distance (typically taking half-an-hour or more), seat availability, and a smooth ride. Using a questionnaire survey on passengers along the Shanghai-Nanjing HSR route, this study aims to examine the nature of ICT device use and in-vehicle e-activities conducted by HSR passengers and the influence on their travel satisfaction with their on-board journey experience. Our results reveal a high percentage of ICT device use and a wide variety of e-activities such as e-working, e-communication, and e-reading for leisure on HSR trains. In addition, the higher use of ICT device was associated with an increase of passengers' travel satisfaction. Furthermore, we found a positive effect of work-related e-activities on travel satisfaction for business/work trips, while a positive effect of entertainment-related e-activities for non-business/work trips. Given that HSR is potentially a more sustainable transport mode, some possible policy implications are proposed to encourage people to use HSR, as opposed to driving or flying, for medium to long-distance intercity journeys.     

Risk factors associated with flying in adverse weather: From the passengers' point of view

Risk factors on the demand side of aviation safety are rarely addressed as the focus of research is most often placed on the supply side of aviation service. Even though airlines have the prerogative to cancel flights in the face of adverse weather, stranded passengers have to be reckoned with in the event of cancellation. Passengers' awareness of the risks associated with flying in adverse weather may help mitigate the confrontation as well as induce passengers to take the lead in adopting preventive measures. The aim of this article is to study the attitudes air travelers say they have towards flying in adverse weather, as well as risk factors regarding cancellation of trips in adverse weather. A conceptual framework is presented which outlines the links between risk factors and preventive measures. Data generated from a quantitative survey of 1145 air travelers, conducted in July 2015 at Taiwan's Kaohsiung International Airport, is used to examine this framework using correlation analysis and one-way analysis of variance (one-way ANOVA). The factors of trust, risk perception and domestic destination are found to be positively related to passengers' stated attitude toward taking preventive measures. Income, purpose of the trip and direct experience generate ambiguous results. The outcome also suggests the following paradox: while pilots make the final decision regarding aviation safety in adverse weather, they appear to enjoy the lowest level of passenger trust.     

High-speed rail and air transport competition in Western Europe: A supply-oriented perspective

Increasingly air transport growth raises the question of its impact on the environment. Public authorities and researchers are relying more and more on high-speed trains (HSTs), whose efficiency is supposed to lead to a modal shift from airplanes. However, most transport studies focus on the evolution of demand rather than supply, although it is basically the latter that determines environmental damage. In light of this fact, this paper aims to compare the overall dynamics in the supply of air transport in Europe compared to the HST supply and to examine empirically five city-pairs. The development of high-speed rail remains limited compared to the increase of air services. For a given city-pair, the decline in the number of flights depends on various conditions, including length of the HST journey and the strategies adopted by the airlines. Some carriers reduce their supply in terms of the number of seats but increase the number of flights in order to compete more effectively with the HSTs. Moreover, the competition between low-cost airlines and HSTs should be kept in mind and re-examined in a few years.     

Evolution of the international air transportation country network from 2002 to 2013

In this research, we analyze the evolution of the international air transportation country network from 2002 to 2013 with two perspectives: The network’s physical topology and the functional network with traffic information. Our analysis shows that the network is scale-free and has the small-world property. The evolution of triadic properties suggests that the network gears towards symmetric, transitive closure. We find that United States, Great Britain, and France are critical from both perspectives; Surprisingly, South Africa is particularly critical from topological point of view. Furthermore, topological and functional criticality are highly correlated to the GDP of a country.     

Segmenting industrial competitive markets: An example from air freight

This paper applies a disaggregated approach to segment industrial markets under competitive structures taking the air-freight market for the high-technology product industry in Taiwan as a case study. Data from firms is used to examine the structure of the air freight industry and we find that carriers are clustered into two strategic groups, express and forwarder. Pricing is a leading strategy recognized by customers for forwarders, whereas service punctuality and freight security are the winning strategies for express. The high-tech freight market is classifiable by shipment destination and size.     

The effect of low-cost air transportation on the local economy: Evidence from Southern Italy

This paper investigates how the entry of low-cost carriers in Southern Italy has supported local and regional economic development in different ways: spreading the traffic demand during the year, increasing the rate of international tourism, generating new jobs and improving the income of the area. The evidence of traffic de-seasonality is quantified by an index, resulting in a decrease to all those airports specialized in low-cost services. Additionally, an assessment shows that the net impact driven by a low-cost route on the local economy is about €14.6 million per year.     

A new approach to quantify the benefit to air travelers resulting from airport capacity expansion

This paper proposes a utility-based methodology to quantify passengers’ benefit resulting from airlines’ adaptation and improvement of service after airport expansion. A numerical example is given to demonstrate its applications in practice.     

Distance traveled in three Canadian cities: Spatial analysis from the perspective of vulnerable population segments

The objective of this paper is to investigate the factors that influence distance traveled by individuals in Canadian urban areas, with a particular focus on three population segments thought to face the risk of mobility challenges: the elderly, low-income people, and members of single-parent households. Data obtained for three large urban centers - Hamilton, Toronto, and Montreal - are analyzed using spatial expansion models, a technique used to obtain spatially-varying coefficients that help to tease out contextual person-location variations in travel behavior. Detailed geographical results help to enhance our understanding of the spatiality of travel behavior of the population segments of interest. Substantively, the results provide evidence of significant interactions between location, various demographic factors, and mobility tools. More specifically, the results evince patterns of mobility that are significantly different from the mainstream population, particularly in suburban settings, in ways that are indicative of mobility challenges.     

Statistical characterization of deviations from planned flight trajectories in air traffic management

Understanding the relation between planned and realized flight trajectories and the determinants of flight deviations is of great importance in air traffic management. In this paper we perform an in-depth investigation of the statistical properties of planned and realized air traffic on the German airspace during a 28 day periods, corresponding to an AIRAC cycle. We find that realized trajectories are on average shorter than planned ones and this effect is stronger during night-time than day-time. Flights are more frequently deviated close to the departure airport and at a relatively large angle-to-destination. Moreover, the probability of a deviation is higher in low traffic phases. All these evidences indicate that deviations are mostly used by controllers to give directs to flights when traffic conditions allow it. Finally we introduce a new metric, termed di-fork, which is able to characterize navigation points according to the likelihood that a deviation occurs there. Di-fork allows to identify in a statistically rigorous way navigation point pairs where deviations are more (less) frequent than expected under a null hypothesis of randomness that takes into account the heterogeneity of the navigation points. Such pairs can therefore be seen as sources of flexibility (stability) of controllers traffic management while conjugating safety and efficiency.     

A spatial analysis of air transport access and the essential air service program in the United States

In the United States, the goal of essential air service (EAS) is to provide a minimum level of air transport service from smaller, often remote communities to the national network. While supporters of EAS tout the economic benefits of connecting rural and isolated communities, critics cite high costs, low use and antiquated eligibility requirements as factors which compromise the value of the program. In this paper, a comprehensive database of US airports is combined with network analysis techniques and a geographic information system to evaluate population access (at the census tract level) to EAS airports for 2006. Results suggest that redundant coverage of EAS market areas by alternative Federal Aviation Administration designated hub airports can contribute to EAS airport market leakage and that alternative definitions of EAS community eligibility have the potential to dramatically increase programmatic efficiency and reduce federal monies spent on EAS subsidies.     

Evaluating the multi-period efficiency of East Asia airport companies

The aim of this study is to analyze how internal operating sub-processes and annual operations of airport companies influence the overall efficiency. The multi-period Network Data Envelopment Analysis is used to evaluate the efficiencies and the efficiency changes for East Asia airport companies. The results indicate that the overall efficiencies of airport companies during a specified period of time are affected by the system efficiency and the sub-processes’ efficiencies in individual periods. Furthermore, the overall efficiency change is determined by the sub-processes’ efficiency changes. According to the operating decision analysis matrix, managers can discover the inefficient sub-processes and formulate the improvement countermeasures.     

Sustainable destination development: the tour operator perspective

Tourism has had a profound and irreversible effect on many destination areas. As the demand for new destinations increases, there is an unrelenting pressure for development in order to satisfy the growth of this complex, pervasive industry. This article presents the results of research undertaken into business attitudes towards sustainable tourism development by the British Federation of Tour Operators and Association of Independent Tour Operators members. The price-cutting competition’ of undifferentiated mass market operators continues to be a threat to sustainable destination development. Furthermore, the 1992 EC Directive on Package Travel is preventing operators from using local suppliers, which is a fundamental principle of sustainability. Copyright © 1999 John Wiley & Sons, Ltd.     

Impact of operational performance on air carrier cost structure: Evidence from US airlines

The impact of operational performance on airline cost structure is empirically investigated using an aggregate, statistical cost estimation approach. Two distinct sets of operational performance metrics are developed and incorporated into the airline cost models as arguments. Results from estimating a variety of airline cost models reveal that both delay and schedule buffer are important cost drivers. We also find that flight activity outside schedule windows increases cost, whereas flight inactivity within schedule windows does not. Using the estimated cost models, we predict the cost savings to airlines of “perfect” operational performance, obtaining an estimate in the range of $7.1–13.5 billion for 2007.     

Airline in-flight entertainment: the passengers’ perspective

Following relaxation of economic regulation in many aviation markets, the competition amongst airlines has intensified in recent years. This has resulted in improvements in airline products, especially in the in-flight services. One of the areas on which airlines have focused their attention is the provision of personal in-flight entertainment (IFE). In 1998, airlines spent $1.8 billion on IFE. However, the industry is faced with a number of questions in relation to such levels of investment: Are the investments justified? Does IFE influence passengers’ choice of airline? Does IFE have a revenue-generating potential? What does the future hold as far as the IFE services are concerned? This paper addresses these questions based on a passengers survey and literature review. The results indicate that while IFE is not amongst the primary factors affecting passengers’ choice, it contributes greatly to passengers’ satisfaction with airline services. While provision of IFE can currently act as a differentiating factor, in the future it will become part of passengers’ expectations. It has also become apparent that, while IFE has the potential to generate some revenue, it would not be enough to cover the total costs associated with the installation and running of IFE systems. The impact of IFE would be felt, indirectly, through increase in passenger loyalty which should have a positive impact on airline revenues.     

Dry bulk shipping market inefficiency,the wide perspective

Systematic geographical differences in profitability in the dry bulk shipping market are studied from the shipowner angle. Specifically, loading regions are compared by the average revenue which ships collect during a calendar year once they have taken the first cargo in a particular region. This revenue is derived from simulation output based on real world data in 1995, 1997 and 1998. The effect of the first loading region is not on its own decisive; rather its choice puts the ship on a virtuous or disastrous path for much of the year, too. Differences between regions can be adequately explained by the ratio of demanded and available tonnage, weighted by sailing distances to a discharging/loading region. Strong relative demand leads to higher revenues, quantified by a linear function called Revenue Gradient. Its existence is interpreted as a token of market inefficiency. There is also a systematic difference between Atlantic and Pacific rates believed to reflect oligopolistic tendencies of the market. The connection is proved by ship segment (large and small capesize, panamax, handysize) and year. The share of these two variables out of the revenue range is estimated.