Application of structural equation modelling for estimating airline performance

Structural equation modelling (SEM) is an estimation method that can handle a large number of exogenous and endogenous factors as well as unobserved (latent) variables that are specified as linear combinations of observed (measurement) factors. This paper presents a SEM procedure with latent variables for estimating the financial and non-financial performance in airline companies. The model includes independent, mediator and dependent latent variables. The sample for this research comprises 214 airline companies. The results indicate that the model is capable of estimating performance with respect to the economic situation and it has also been determined that two types of constructs affect performance. One type is the economic situation acting as an initial construct and the other is the internal operation acting as the mediator in the research model.     

A passenger demand model for air transportation in a hub-and-spoke network

This paper develops an air passenger model that deals with city-pair demand generation and demand assignment in a single framework. Using publicly available and regularly collected panel data, the model captures both time series and cross-sectional variation of air travel demand. The empirical analysis finds that pattern of correlations among alternatives can be described by a three-level nested logit model. Fare, frequency, flight time, direct routing, on-time performance, income, and market distance have significantly effects on air demand. Correcting for the problem of endogenous air fares using instrumental variables yields more plausible estimates of price sensitivity and value of time.     

Evaluation of passenger satisfaction with service quality: A consecutive method applied to the airline industry

Passengers' dissatisfaction with service quality is one of the crucial factors affecting the market share loss of airlines. This study aims to find out how airlines become capable of satisfying their passengers by considering the diversity of pre-purchase expectations. Therefore, the study proposes a novel model for clustering air passengers to identify passengers with similar expectations. Thus, the passengers' expectations of the service quality attributes in each cluster were measured and converted into quantitative degrees of customer satisfaction by applying the Kano model. Finally, Importance-Satisfaction Analysis (ISA) was employed to finding that which service quality indicators fall into the “Keep up the proper work”,” Concentrate here”,” Possible overkill”, and “Low priority” category for eliciting applicable marketing strategies.     

A fully fuzzy network DEA-Range Adjusted Measure model for evaluating airlines efficiency: A case of Iran

Due to the competition among companies, evaluating the performance is one of the most important issues for managers. Data Envelopment Analysis (DEA) - Range Adjusted Measure model (RAM) is one of the non-radial models to evaluate the performance of companies. This paper presents a fully fuzzy network DEA-RAM model for evaluating airlines and extends the network DEA-RAM model in the fully fuzzy framework. First, a network structure is designed for airlines and then, a DEA-RAM model is presented for calculating efficiency scores. To handle uncertainty in data, fully fuzzy approach is considered and finally, a multi-objective network model is proposed to calculate airlines’ efficiencies. To solve the proposed fully fuzzy DEA-RAM model, the lexicographic approach is used and the efficiency scores are reported as interval numbers. To illustrate the capability of the proposed fully fuzzy DEA-RAM model, the actual data of 14 Iranian airlines are gathered and the interval efficiencies of airlines are evaluated.     

A robust hybrid decision model for evaluation and selection of the strategic alliance partner in the airline industry

Owing to the cut throat competition and economic uncertainty in the market, airlines are focusing on strategic alliances for satisfying customer needs, especially in the current time which is dominated by global integration, demanding customer and fast changing technologies. This strategy is widely adopted by airlines. However, the selection of strategic alliance partner is a very decisive decision, and this selection process engrosses a number of complex processes which is result of compound reflection of associated various factors. In addition, the decision makers may be inconsistent in their views and preferences, arising due to imperfect information or intrinsic conflict between various departments. This paper presents a model based approach of an analytic hierarchy process (AHP) for evaluation of criteria and fuzzy technique for order performance by similarity to ideal solution (FTOPSIS) for the selection of strategic alliance partner. A case of Indian airline industry demonstrates the application of the proposed approach. Eventually, robustness of the model is demonstrated by sensitivity analysis.     

A combined MCDM model based on DEMATEL and ANP for the selection of airline service quality improvement criteria: A study based on the Taiwanese airline industry

The aim of this study is to select airline service quality improvement criteria for the Taiwanese airline industry. Numerous factors such as low railway prices, the development of high-speed rail, increases in petroleum prices, increases in foreign airline competition, and the recent economic depression have led many airlines in Taiwan to encounter financial difficulties and even closure. Researchers have begun to identify critical service quality improvement criteria with the goal of increasing the competitive advantages of airlines. Most of the selected criteria, however, suffer from a major technical problem: all of the measurement dimensions are independent, leading to inadequate criteria for measuring service quality. Our calculations consider the interrelationships and effects among the evaluation dimensions and criteria to precisely rank and select criteria. The value of this study is that it provides airlines with a direction for measuring and improving their service quality with the goal of developing sustained competitive advantage over the long term.     

A MILP model for planning the trips of dynamic positioned tankers with variable travel time

The transportation of the crude oil produced in offshore oilfields to onshore terminals is performed by vessels, known as shuttle tankers. Scheduling shuttle-tanker operations entails solving complex problems to ensure a timely offloading of the platforms, taking into account several logistics and inventory constraints. This work proposes a new MILP formulation that advances previous works by considering variable travel time between platforms and terminals. The combination of the MILP formulation with an optimization solver constitutes a decision-support tool to aid engineers reach optimal decisions for a planning horizon. To handle large-scale instances, rolling-horizon and relax-and-fix strategies are proposed.     

A market attraction model for predicting the US market share of large civil aircraft

With global annual sales exceeding $65 billion, the large civil aircraft industry is an important economic and strategic element of the European Union and US economies. Here we define large civil aircraft (LCA) as those aircraft with capacities exceeding 121 passengers and dedicated to the air passenger market served by commercial airlines. This paper employs a transformed log-centered market attraction model to forecast the US market share of LCA. This model specification ensures that the predicted market share is in the range [0,1] and that the sum of all predicted market shares is equal to 1.0, both logical process requirements. In this special case, where there are two producers, the market attraction model becomes a logit regression model. Here we specify the logit regression model as an autoregressive distributed lag model in which US market share is predicted by quantitative and qualitative predictor variables, an autoregressive lag operator and a linear trend component.     

A new model of luggage storage time while boarding an airplane: An experimental test

The boarding process is on the critical path of the turn-around. Reduction in boarding time can benefit airline carriers and airports and improve passenger satisfaction. However, aisle interference caused by passengers placing their luggage during boarding is a key factor leading to cabin congestion and low boarding efficiency. Therefore, the storage time for the carry-on luggage and its influencing factors is analyzed in this study. An experiment was conducted in a B737-800 model (1/3 size) to explore the factors effecting the time of luggage storage, and a new effective model of luggage storage time is proposed through a significance test and data fitting. The results show that the age of passengers, the type and quantity of luggage, and the existing luggage in the luggage bin have a significant impact on the luggage storage time; the rule of the variation in luggage placing time is similar between young adult passengers and middle aged passengers; the impact of the existing luggage in the overhead bin on the luggage storage time shows a stable trend in the initial period, but with the quantity of the luggage increasing to a certain point, the luggage storage time begins to increase sharply, which is known as a “jump”; and the luggage type has a great influence on the threshold value of jump. The results of the study can provide a reference for airlines to manage cabin luggage to improve boarding efficiency and improve passenger experience.     

Calculating load factors for the transatlantic airline market using supply and demand data – A note on the identification of gaps in the available airline statistics

This paper takes a critical view of the verification of load factors for the direct transatlantic airline market by combining supply and demand-data. The supply-related data originate from the Official Airline Guide, a well-known data source that contains information on scheduled flights. The demand-related data originate from the Marketing Information Data Transfer database, a data set containing information on actual airline bookings. Combining both data sets enables us to calculate the seat occupancy of direct flights between North-West Europe and the US for 2001. Based on the results, we assess the utility of the joint use of these data sources for aviation economic research, and identify various gaps in the available airline statistics.     

A robust mathematical model and heuristic algorithms for integrated aircraft routing and scheduling,with consideration of fleet assignment problem

One of the most important airline's products is to determine the aircraft routing and scheduling and fleet assignment. The key input data of this problem is the traffic forecasting and allocation that forecasts traffic on each flight leg. The complexity of this problem is to define the connecting flights when passengers should change the aircraft to reach the final destination. Moreover, as there exists various types of uncertainties during the flights, finding a solution which is able to absorb these uncertainties is invaluable. In this paper, a new robust mixed integer mathematical model for the integrated aircraft routing and scheduling, with consideration of fleet assignment problem is proposed. Then to find good solutions for large-scale problems in a rational amount of time, a heuristic algorithm based on the Simulated Annealing (SA) is introduced. In addition, some examples are randomly generated and the proposed heuristic algorithm is validated by comparing the results with the optimum solutions. The effects of robust vs non-robust solutions are examined, and finally, a hybrid algorithm is generated which results in more effective solution in comparison with SA, and Particle Swarm Optimization (PSO).     

New SP-values of time and reliability for freight transport in the Netherlands

This paper discusses the methods used in a study on the values of time and reliability in freight transport in the Netherlands. SP surveys were carried out among more than 800 shippers and carriers. A novel feature is that both for the value of time and reliability two additive components are distinguished: a transport cost and a cargo component. Specific instructions were given to make sure that the carriers provide the former and shippers that contract out the latter component. The resulting values that will be used in CBA in The Netherlands are presented and compared against the international literature.     

Departure time choice behavior for hurricane evacuation planning: The case of the understudied medically fragile population

Despite the non-trivial number of (non-institutionalized) residents with special needs – referred to as the medically fragile population in this paper – there is virtually no research available to guide the hurricane evacuation planning for this population group. One area is their evacuation time choice behavior that can have tremendous implications for their safety as well as the logistics of the evacuation process. In this paper, we fundamentally advance our understanding of the evacuation timing behavior of this heavily understudied, and potentially vulnerable, population group. Analysis indicates that key differences exist between the medically fragile and non-medically fragile population.     

Implications of the ageing society and internationalisation for airport services: A perspective on passenger demand for personal space at airport terminals

“Per-passenger-space” has been used as one of the fundamental units of Level of Service (LOS) measurement to evaluate the capacity of airport terminals for passenger comfort and service satisfaction. This study addresses the questions of how air passengers perceive personal space as an airport service attribute, and how the territoriality of passengers is moderated by their age and cultural background. Participants were grouped depending on their age and nationality for a comparative study. The results from the Repertory Grid Technique (RGT) and open-ended questions supported the conclusion that passengers of different age and cultural backgrounds perceive personal space differently, and their service satisfaction would be partially affected by the availability of personal space within the airport terminal. These findings suggest a necessity for alternative LOS standards that are cost-effective and able to reflect changing age structure and cultural composition of air passengers.     

A Cournot model for analysing the effects of an open skies agreement

In the last decades there has been a gradual liberalisation of international air transport markets through the implementation of open skies agreements which seek the deregulation of the air transport industry and consequently the functioning of the market in a freer way. The objective of this work is to study the effects of an open skies agreement in order to understand if the airlines and the consumers will benefit after the market deregulation. With this purpose, we develop a Cournot model to compare the initial situation (without agreement) and the situation after the implementation of the open skies agreement.Based on the model developed we conclude that after market liberalisation the prices on international market segments where competition increases should decline, thus benefiting consumers. Regarding the incumbent airlines in the market, an open skies agreement should jeopardize the airlines that fail to operate new routes, leading to decreased profits.     

A reverse logistics cost minimization model for the treatment of hazardous wastes

This study presents a cost-minimization model for a multi-time-step, multi-type hazardous-waste reverse logistics system. A discrete-time linear analytical model is formulated that minimizes total reverse logistics operating costs subject to constraints that take into account such internal and external factors as business operating strategies and governmental regulations. Application cases are presented to demonstrate the feasibility of the proposed approach. By using the proposed model coupled with operational strategies, it is shown that the total reverse logistics costs for the applications cases can be reduced by more than 49%.     

Destination choice and the identity of places: A disaggregated analysis for different types of visitor population environment in the Netherlands

Individual behaviour relates to the ecological structure or identity of places. In this study, we investigated the relationship between the space–time ecologies of different types of visitor population environment in the Netherlands and destination choice. Multinomial logistic regression modelling for car users was applied to determine the relative importance of various personal and household attributes on choosing for a particular purpose a particular type of visitor population environment during a particular time period of the day. The attributes with the strongest link to the space–time ecologies of destination environments proved to be age, educational level, car ownership, and household income and type.