Evaluating the multi-period operating efficiency of international airports using data envelopment analysis and the Malmquist productivity index

For the most part, airports are publicly or semi-publicly owned and operated with fixed assets. As such, airports have been often considered little more than infrastructure providers for airlines. However, as airports have begun to offer a variety of ancillary services including passenger transfers, re-fueling, parking, and shopping, they no longer play second fiddle to airlines. To come into their own, a growing number of airports realized their need to develop competitive strategies that can attract more air traffic and generate greater revenue. Such strategies start with the assessment of their competitiveness in terms of operating efficiencies relative to others. To help airport authorities identify major drivers for enhancing the airport operational efficiency and the subsequent competitiveness, this paper evaluates the comparative efficiencies of international airports for a multi-year period (2006–2011) using data envelopment analysis intended for dynamic benchmarking and Malmquist productivity index built on time-series analysis. Our study indicates that the productivity of an airport was influenced by exogenous factors such as shifts in government policies and technological advances rather than endogenous factors driven by improvements in managerial practices.     

Impact of landing fees on airlines’ choice of aircraft size and service frequency in duopoly markets

A one-shot simultaneous game-theoretic model is applied in a duopoly market to investigate how airport landing fees could influence airlines’ decisions on aircraft size and service frequency. It is found that higher landing fees will force airlines to use larger aircraft and less frequency, with higher load factor for the same number of passengers. It is also found that airlines will be better off if some of the extra landing fees are returned to airlines as a bonus for airlines using larger aircraft, which consequently reduces airport congestion.     

Airport–airline vertical relationships,their effects and regulatory policy implications

This paper examines the forms and effects of vertical relationships between airports and airlines with a focus on the North American and European aviation markets. We find that such vertical relationships enables those participating to achieve various benefits and may be formed as a competitive response to other competing airport–airline alliances. In some cases, vertical airport–airline relationships strengthen the hub status of major airports, leading to increased employment and service quality in local markets. On the other hand, preferential treatment of a particular airline by an airport may enhance that airline’s market power, allowing it to dominate the airport and charge hub premiums. The competition and welfare implications of airport–airline vertical alliances can be complicated and two-sided, subject to the influences of other factors such as the market structures of the airline and airport markets.     

Measuring airport quality from the airlines’ viewpoint: an application of data envelopment analysis

The main objective of this paper is to develop a model to determine the relative efficiency and quality of airports. This factor seems to have a strong effect on the airlines’ choice of hubs. Previous studies of airport quality have used subjective passenger data whereas in this study airport quality is defined from the airlines’ viewpoint. Accordingly, we have solicited airlines’ evaluations of a number of European and non-European airports by means of a detailed questionnaire. Statistical analysis of the median score has shown that these evaluations vary considerably relative to quality factors and airports. The key methodology used in this study to determine the relative quality level of the airports is Data Envelopment Analysis (DEA), which has been adapted through the use of principle component analysis. Of the set of West-European airports analyzed, Geneva, Milan and Munich received uniformly high, relative efficiency scores. In contrast, Charles de Gaulle, Athens and Manchester consistently appear low in the rankings.     

Airport-specific traffic forecasts: a critical perspective

This paper offers some comments on the nature of airport-specific traffic forecasting. While the argument acknowledges the importance of reconciling local hinterland-derived and global macro-economic forces in such projections, it is argued that the primary causative factors in airport forecasts relate primarily to supply as distinct from demand. In particular, the discussion examines the effects of deregulation on airline and airport strategies. It concludes that future forecasting methodologies have to build on the role and viability of specific airlines at specific airports, rather than prolong an increasingly timeworn dependence on hinterland-derived factors and related assumptions of consumer choice.     

Strategic alliances between airlines and airports—theoretical assessment and practical evidence

Strategic alliances are now widespread. This paper shifts the focus from alliances among airlines toward strategic alliances involving passenger airlines and airports. Following a conceptual path analyzing motives, potential benefits and problems, potential fields of cooperation are identified along with three basic classes of airline–airport alliances. Capacity-based, marketing-based, and security based cooperation models are assessed with regard to benefits for the participating airline and airport partners. This expands the existing literature that has largely neglected the airline–airport relationship and its potential for developing their respective competitive strategies. The case of the alliance between Lufthansa and Munich airport serves as an illustration.     

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.     

Success factors for the privatisation of airports—an airline perspective

This article examines different approaches to airport privatisation. It shows that privatisation can only be a success when government provides a suitable regulatory framework prior to privatisation. This framework must protect the interests of the consumer and ensure the participation of airlines as primary users in the privatisation project, thus establishing a solid basis for a strong partnership between the airlines and the airport. To accomplish this, the monopoly income of an airport should be subject of a price cap mechanism following the single till principle, best being set up in cooperation with the airlines and controlled by an independent regulator.     

An exploratory study into airport choice factors for European low-cost airlines

Low-cost carriers are an increasingly important part of the European aviation industry. Airport choice is a crucial factor in determining their success or failure. While research has been conducted into airport choice factors, their relative rankings have not previously been investigated. This paper addresses this through an exploratory survey of eight European low-cost airlines. The paper finds that demand for low-cost services is the most important choice factor, with aeronautical charges ranked fourth. Further analysis reveals different requirements depending upon airline characteristics. This implies that airport managers need to tailor their service offering to individual low-cost airlines rather than treating the sector uniformly.     

The effects of use agreements on airport efficiency

Bilateral contracting is integral to the working relationship between airports and airlines. In the U.S., the three common types of airport use agreements are the residual method, the compensatory method, and the hybrid method. Under a residual agreement, the financial risk of the host airport is borne by the signatory airlines, and in return, the signatory airlines pay reduced user fees. Under a compensatory agreement, however, airports bear their own financial risks in the absence of a signatory airline. A hybrid agreement combines the features of residual and compensatory agreements. For example, under a hybrid agreement, airports usually bear their own financial risks in terminal operations while the signatory airlines take over the financial risks in airfield operations. The aim of this paper is to determine whether these three types of business agreements affect airport operational efficiency. Using 2009 to 2016 yearly data of 59 U.S. hub airports, we find that airports with residual-type agreements tend to have lower operational efficiency. This implies that, although under a residual agreement, the signatory airlines pay favorable airport fees and charges, increased airport inefficiency may undercut any potential benefits of the agreement.     

The origin–destination airport choice for all-cargo aircraft operations in Europe

In this paper, we analyze the origin–destination airport choice for freighter operations of combination and all-cargo carriers in Europe. First, we discuss the choice process of airlines qualitatively. Next, using a stated choice experiment, we show that the presence of forwarders at an airport is the primary factor in explaining airlines’ choices, especially for airlines serving main airports. For airlines primarily serving regional airports, the possibility for night-time flights is most important. Finally, the presence of passenger operations at an airport is not a significant factor and the level of origin–destination demand is of limited importance.     

Entry patterns of low-cost carriers in Hong Kong and implications to the regional market

This study aims to provide a better understanding of Asia's low-cost carriers (LCCs) by empirically analysing their route entry patterns in Hong Kong. Two alternative models have been tested, namely a standard probit model and a generalized least squares estimation. Consistent findings from the two models suggest that LCCs in Asia have a preference for large markets with big populations, high incomes and high traffic volume. On the other hand, the dominance of incumbent full service airlines (FSAs), fierce route competition and the lack of secondary airports are not critical to the growth of LCCs. However, government regulations and airport access are main impediment factors. Despite the adoption of long-distance low-cost models by the region's airlines, geographic distance still plays an important role in LCCs' entry decisions. For the growth of low-cost travel and associated benefits in the tourism industry and overall economy, it is important for governments in the region to liberalize aviation markets, provide sufficient airport capacity, and promote efficient allocation of airport slots.     

Estimating hourly variations in passenger volume at airports using dwelling time distributions

A mathematical model using a probability density function of the terminal dwelling time distribution is developed to estimate the number of passengers arriving at an airport terminal at various times. A two-way ANOVA that tests the effects on different airports and access time durations were carried out, and the results showed a significant difference between terminal dwelling times among airports. The paper also provides some insight into airport terminal operation when there are significant changes to flight schedules and the introduction of new airlines, etc.     

Airport–airline interaction: the impact of low-cost carriers on two European airports

This paper uses case studies to look at the impact of low-cost airlines on two European airports. Low-cost airlines continue to exert an influence in air transport markets and small airports face pressures to compete for their business. The low-cost model motivates airlines to negotiate contracts that significantly reduce aeronautical revenues, leaving airports to compensate by seeking commercial revenues from the increase in passengers. This has consequences for the airports, their passengers and the relationship between the airport and its existing operators. It is found that it is important for airport management to see both passengers and airlines as customers and to understand the resultant revenue streams, before negotiating preferential contracts with low-cost carriers.     

Determinants of selection of full-service airlines and low-cost carriers—A note on business travellers in South Africa

The research conducted in South Africa follows similar studies conducted in UK and Brazil, in investigating factors that may influence business travellers in their selection of full-service airlines or low-cost carriers. On comparison of the studies, findings related to the influence of company size, loyalty programmes, in-flight service and airport lounge facilities appear to coincide but some differences in conclusions drawn on the influence of variables such as price and flight frequency were evident in South Africa.     

Management of airport congestion through slot allocation

The lack of airport slots (the time allocated for an aircraft to land or take off), particularly at airports which experience congestion, have reached unmanageable proportions in recent years. The International Civil Aviation Organization (ICAO) records that, by the end of 1997, there were 132 slot controlled international airports. The World of Civil Aviation, 1997–2000. ICAO Circular 273-AT/113, p. 12 (118 year round and 14 during peak seasons). Between 1989 and 1998 the reported number of commercial aircraft in service increased by about 60% from 11,253 to 18,139 aircraft. In 1998, 1463 jet aircraft were ordered, compared with 1309 in 1997, and 929 were delivered compared with 674 aircraft in 1997. In 1998, the total scheduled traffic carried by airlines of the 185 Contracting States of ICAO amounted to a total of about 1462 million passengers and about 26 million tonnes of freight. These figures¹ are reflective of the rapidly increasing frequency of aircraft movements at airports, calling for drastic management of airport capacity. To cope with the demand, airlines are forming strategic alliances with themselves by utilizing such commercial tools as franchising, leasing and interchange of aircraft. The management of airport capacity through slot allocation is a critical consideration for the world aviation community. This article analyses the problem and discusses various issues related thereto.     

The impact of airport fees on fares for the leisure air travel market: The case of Spain

Panel data is used to determine the incidence of airport fees on fares in the Spanish leisure market airlines. We also study its structure through an empirical specification of a pricing and demand equation system. The results show the existence of market power, strategic behavior and density economics. We also demonstrate that airlines pass all the airport fees onto customers by increasing fares. Furthermore, we find that the behavior of airlines in routes with the presence of low cost carriers do not differ from other routes.     

A global model for estimating the block time of commercial passenger aircraft

This paper uses a two-stage statistical model to estimate the block time of commercial passenger aircraft. The model considers many of the factors contributing to airport congestion and provides a basis for future development of multivariate statistical models of the flight operation process. The model is tested using 2 million US domestic flights by six airlines in 2004. Model analysis provided insight regarding the relative impact of weather conditions and airport utilization on block time. In particular, population, arrival time, airport utilization, ice, and the interaction of poor weather conditions and traffic were found to be significant predictors of block time.     

Study of the topology and robustness of airline route networks from the complex network approach: a survey and research agenda

Communication via air routes is an important issue in a world organized around a web city network. In this context, the robustness of network infrastructures, e.g. air transport networks, are a central issue in transport geography. Disruption of communication links by intentional causes (e.g., terrorist attack on an airport) or unintentional (e.g., weather inclemency) could be crucial for countries, regions and even the airlines affected themselves. Policymakers and the management of airlines and alliances should be able to reduce the effects of such interruptions in order to ensure good communication through air transport (i.e., maximize the robustness of their network at a reasonable cost). The literature review of the study of air transport route networks through an analysis of complex networks has highlighted a lack of contributions to the study of the topology and the robustness of such networks which contrasts, with advances undertaken for other transport networks or communication systems. This survey suggests areas in which research should be undertaken, based on the existing literature in other areas and from three different perspectives: global route networks, airline alliances, airlines and airports so as to help towards a better understanding of air traffic and, therefore, to be able to assess the potential damage of any airport being inoperative for a continent, country or airline.     

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.