Sustainable airline strategy using portfolio theory: A case study of remote islands in Japan |
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Authors: | Nobuaki Minato Risako Morimoto |
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Institution: | 1. Graduate School of System Design and Management, Keio University, 4-1-1, Hiyoshi, Kohoku-ku, Yokohama, 223-8526, Japan;2. Ecole Superieure de Commerce de Toulouse, 20 Boulevard Lascrosses, BP7010, 31068 Toulouse Cedex 7, France |
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Abstract: | The thin and fluctuated market generally characterizing air transport to remote islands involves greater business risks for airlines. But air transport often plays an important role in the life and economy of such islands. This paper applies portfolio theory to explore how it can reduce business risks to air transport in this context. The concept of Tourism β is introduced to represent the risk associated with each island market relative to overall tourist demand in the region looking as at 31 airports on remote islands in Japan. The results showed that a well-diversified portfolio of multiple remote islands could reduce the score commercial risks for carriers. |
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