Measuring the potential for self-connectivity in global air transport markets: Implications for airports and airlines

One of the strategies that air travellers employ to save money is self-connectivity, i.e. travelling with a combination of tickets where the airline/s involved do not handle the transfer themselves. Both airports and airlines, particularly low-cost carriers, have recently started catering to the needs of this type of passengers with the introduction of transfer fees or the development of self-connection platforms. The evidence provided by the existing literature, however, suggests that the degree of implementation of these strategies falls short of its true potential. In order to investigate how much self-connectivity could be observed in global air transport markets, this paper develops a forecasting model based on a zero-inflated Poisson regression on MIDT data. We identify the airports that have the highest potential to facilitate self-connections, as well as the factors that hinder or facilitate the necessary airline agreements at major locations. The results from this paper have many implications in regards to the widespread implementation of self-connection services and the future of the air travel industry.     

A review of research on risk and safety modelling in civil aviation

Safety is considered as some of the most important operational characteristics of contemporary civil aviation. An extensive regulatory structure has been established to supplement the private airline, airport and air navigation systems, incentives to limit the risks of flying. This paper reviews the research on risk and safety modelling in civil aviation. In such a context, the basic concepts and definitions of risk, safety and their evaluation are described. The review focuses on four categories of models for safety assessment: causal for aircraft and air traffic control/management operations, collision risk, human factor error and third-party risk.     

International trade in air transport services: Penetration of foreign airlines into Japan under the bilateral aviation policies of the US and Japan

This study examines the impact of the bilateral aviation framework on passenger air transport service imports focusing on the US and Japan. The US promoted liberalization under its Open Skies framework from the 1980s, while Japan supported phased-in liberalization under the traditional bilateral air services framework. The numbers of US and Japanese citizens flying on foreign carriers has increased. The penetration of foreign imported air services into Japan has been significant. Regression analysis shows that Open Skies liberalization may contribute to the increased US import. Japan's relative market openness, however, makes it difficult to measure the effects of liberalization under a bilateral framework and shows the complex dynamics that may accompany Open Skies policies.     

Localized competitive advantage and price reactions to entry: Full-service vs. low-cost airlines in recently liberalized emerging markets

This paper empirically investigates price reactions to the entry of the low-cost carrier Gol Airlines in the Brazilian domestic market in 2001. Given the substantial reduction in unconditional yields of the incumbent airlines on routes actually entered by Gol, we perform an econometric analysis of the determinants of pricing power along with the analysis of the pattern of price reactions by incumbent legacy carriers. Using data from a panel of routes disaggregated at the airline level, we obtain that (i) both airport and route presence are relevant at explaining pricing behavior; (ii) price responses vary significantly according to flight distance and the amount of seats supplied by the entrant, in the sense that the shorter the route, and the more the seats offered by the newcomer, the stronger the price reactions from the incumbents, with significant point estimates in the range 22–26% in yield reduction for routes as short as 350 km (approx. 195 miles). More generally, the results shed light on the impacts of airline deregulation in emerging markets and the issue of localized competitive advantage due to product differentiation in the industry.     

International airports: financing methods in Japan

Capacity shortages at international airports in Japan are the most serious impediment to liberalization and free competition in international aviation. Here, we deal with the causes of this shortage, Japanese institutional systems of airport improvement and new financing methods for international airport capacity expansion in metropolitan areas. We emphasize the effectiveness of the joint-stock corporation system as a financial device. The introduction of the joint-stock corporation is one kind of airport privatization, but its characteristics completely differ from those of privatized airports in some European countries and in New Zealand.     

铁路、民航客运市场竞争焦点及对策探讨

由于民航在机场建设和航线开发上的不断发展,使750～1500km范围内的客运市场成为与铁路竞争的焦点。随着民航票价的下浮,运营成本和人工成本的进一步降低,将对铁路形成更大的挑战。为此,铁路必须明确客运市场竞争重点,通过采取加强管理、降低戍本,继续提速改造、提高运输质量等措施,提高铁路的综合竞争力。     

Strategies and pitfalls in the infrastructure development of airports: A comparison of Milan Malpensa and Berlin Brandenburg International airports

The paper analyses two airport investment projects in Europe: the completed investment at Milan Malpensa Airport and the investment at Berlin Brandenburg International. The two facilities were chosen because of similarities in their market environments. The paper examines the history of the projects, their objectives, demand forecasts, assessment methodologies and the strategies of the main carriers that use them. A comparison between expectations and outcomes for Malpensa a decade after its opening allows examination of the validity of the parameters used in the decision-making. The criteria being used to assess the investment in Berlin Brandenburg International are explored.     

Business performance of airports: Non-aviation revenues and their determinants

Management of non-core commercial activities has become a key issue amongst the leverages for improving modern airport industry. Today airports have increased dramatically their dependence on non-aeronautical revenues, which on average account for half of all revenues with this share being highly heterogeneous across regions and airports. Using a dataset of German airports, this paper discusses the improvement of commercial revenues by exploring its determinants. Previous contributions assessed the impact of a selected set of variables non-aviation revenues. Such approach was mainly the effect of multicollinearity, as the majority of relevant variables are strongly correlated to the size of the structures. We address this issue by using ridge regression and partial least squares. Results suggest the potential conflict of non-aviation revenues per passenger and per square meter with the need to expand the number of passengers.     

Efficiency thresholds and cost structure in Senegal airports

This paper assesses airport efficiency levels in Senegal under a stochastic environment where the satisficing concept for different performance thresholds is applied. A two-stage satisficing DEA-Support Vector Machine approach is used here to compute the impacts of cost structure on these thresholds. In the first stage, within the ambit of the satisficing DEA model, the probabilities of achieving a minimal performance threshold are computed in a stochastic fashion. In the second stage, Support Vector Machine regression is used to discriminate between high/low efficiency groups within a given performance threshold. This methodology was sufficiently robust to handle small samples. The results reveal that the cost of capital and the cost of labor are the cost structure variables that have the greatest impact on efficiency levels, besides cargo operations.     

Business aviation in Germany: An empirical and model-based analysis

The primary role of large airports is to serve the general public with scheduled and charter air transport services, with a secondary role of providing direct air transport access to regional industry and to firms who operate their own fleets of aircraft. Because of the complexity of slot allocation procedures and increasing runway capacity problems at airports, there is a growing problem in realising this secondary function. Neighbouring regional airports could play a complementary role and cope with some of this growth in traffic. Here we quantify the distribution of growing business aviation demand between airports to explore potential ways of accommodating it at both major and nearby secondary facilities.     

Technical efficiency and productivity changes in Spanish airports: A parametric distance functions approach

This paper contributes to the airport benchmarking literature in two ways. To our knowledge, this is the first attempt at using a stochastic distance function to measure airports’ productivity changes while considering multiple outputs. Secondly, we calculate the evolution and decomposition of the Total Factor Productivity (TFP) for Spanish airports. The average rate of productivity showed a slight annual improvement of 0.9%, and the core engine of this was 3% increase in technical progress rather than through efficiency. Results, by airport, identify those needing improvement, to be more attractive in the Spanish airport restructuring program.     

Marketing innovation: Sources,capabilities and consequences at airports in Europe's peripheral areas

This paper investigates sources, capabilities and consequences of marketing innovation at airports in Europe's peripheral areas. A questionnaire-based survey was administered to airport managers. Ten sources of airport marketing innovation are identified. Innovation is significantly higher at airports that are administered as an independent entity compared to airports that are administered as part of a regional or national airport system. Large airports have a significantly higher level of innovation compared to small airports. Innovation has a significant positive effect on airport marketing performance, irrespective of the strategic focus of the airport.     

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.     

Efficiencies and scope economies of Chinese airports in moving passengers and cargo

The paper looks at the technical efficiency of Chinese airports using multi-output stochastic input distance function analysis. This method provides a statistical test of scope economies to investigate the contribution of air cargo transport to airport efficiency. Our findings confirm the presence of scope economies in air passenger and air cargo transport among airports in China. We compare and contrast these results with results obtained from single-output stochastic production frontier analysis in which the effect of scope economies is not included. Our results indicate that the presence of scope economies significantly affects the estimation of technical efficiency, thus implying different efficiency rankings among airports in China.     

Air transport liberalisation and the development of third level airports in France

The liberalisation of air transport in the European Union encouraged a proliferation of new entry airlines exploiting the opportunities offered by minor airports. This was particularly apparent in France where “third level” airports experienced growth associated with start-up airlines using low-capacity aircraft. A summary of these trends is followed by a detailed examination of the Centre-East District, which demonstrates that the aspirations of both airlines and airports have been compromised by recent restructuring of the French airline industry. Far from providing greater competition, deregulation has increased the quasi-monopoly of Air France as market forces proved to be stronger than liberalisation. As a result, many third level airports face an uncertain future, especially in the light of the terrorist attack on the United States and its likely effect on airline economics.     

Civil aviation regimes and leisure tourism in Europe

The paper discusses the implications of modern civil aviation regimes for tourism in Europe. A discussion of the relation between air transport and tourism sets the foundation for the study focus. The market strategies of the players involved are examined within a multidimensional framework of corporate rivalry during regulation and liberalisation. The connotations for tourism origins, destinations and consumers are presented and policy measures are suggested for the alleviation of emerging problems.     

The role of regional airports and air services in the United Kingdom

This paper deals with the implications of the 1998 UK transport White Paper for regional airports and air services within the wider context of the promotion of an integrated and sustainable transport system. More specifically, the discussion initially addresses the political and business context of the development of air transport in the UK regions. Secondly, the recent trends defining that development are isolated, particular attention being paid to the increasing importance of supplier-led strategies in air transport and the segmented markets served by regional airports. Finally, the three, not easily reconciled, strands, which can be identified in the White Paper’s analysis of aviation are considered. These are: air transport's relationship with sustainable development; the integration of air transport with surface modes; and the contribution of air transport to regional economic growth.     

Promoting passenger comfort and wellbeing in the air: An examination of the in-flight health advice provided by international airlines

Cases of airline passengers developing deep vein thromboses and contracting infectious diseases during flights have led to airlines' provision of in-flight customer health advice coming under increased scrutiny. By means of a manifest content analysis of the information provided in 50 international airlines’ in-flight magazines, this paper examines the nature and presentation of the health advice that is supplied and comments on the different approaches individual airlines adopt.     

Air route suspension: The role of stakeholder engagement and aviation and non-aviation factors

This study provides insight into how aviation and non-aviation factors affect the decision to suspend air routes. Using examples from Australian domestic routes, the paper analyses the business relationships and negotiation processes followed by airports, airlines, and destination management organizations (DMOs) to avoid air route suspensions. Data were collected through semi-structured interviews with key aviation and tourism stakeholders directly impacted by suspended routes. The outcomes of this paper demonstrate that while most of the major reasons for air route suspension in Australia are mentioned in existing literature and are linked to demand, other factors have not previously been deeply investigated, including how stakeholders can be involved to avoid air route suspension. The paper also explores and identifies strengths and weaknesses in the relationship among airlines, DMOs and airports.