Consumer loyalty programs such as frequent flyer programs (FFPs) may alter the intensity of price competition between firms. The increasing marginal benefits that are built into the reward schedules of FFPs give consumers incentives to concentrate their flying with a single carrier, rather than choose carriers on a flight-by-flight basis. When selecting the airline with which to accumulate poin...

In this paper, an exploratory study of failure and distress prediction models is presented based on a qualitative survey among new-entrant airline managers and a quantitative data source containing ®nancial and trac data of new-entrant airlines. Using logistic regression, it became evident that qualitative variables are a viable source for model construction. They contribute to a deeper unders...

Sellers increasingly compete with innovative Internet-based selling mechanisms, revealing or concealing market information. Transparency strategy involves design choices by firms that influence the availability and accessibility of information about products and prices. We develop decision support models for suppliers to set prices for online mechanisms with different transparency levels. We th...

In this paper, we examine the relationship between airline frequencies and delays under different route structures taking advantage of aggregated data of large US airports for the period 2005-2013. We run regressions using airline and airport fixed effects to control for different heterogeneities in data. Results of the empirical analysis show airlines operating under hub-and-spoke route struct...

Safety is arguably the most important “quality” attribute of commercial aviation, yet it rarely figures into overt inter-firm rivalry. This chapter lays out the underlying economic models of safety provision and the demand for safety by passengers, and concludes that profit maximizing firms should seek to diversify their safety offering. However, crucial failures in market processes remove the ...

Data envelopment analysis (DEA) is a popular non-parametric approach to examine performance and productivity of airlines; however, it could not provide statistical information such as confidence intervals on the estimated efficiency scores. We combined stochastic frontier DEA into single framework disentangle noise ‘pure’ inefficiency from scores accordingly for Monte-Carlo simulation verified ...

Many e-commerce principles were pioneered in the airline industry. These include the first business-to-business electronic information exchange and industry-wide electronic marketplace. This environment provided unprecedented opportunity for operations research (OR) modeling. By the mid-1980s airlines used customer shopping data to calibrate traveler demand and choice models, analyzed multi-cha...

Airlines are the least protable node in the aviation value chain, well behind global distribution systems, travel agencies, MRO rms, and ground handlers. Historically, airline companies have been early adopters of technology and they are now striving to modernize their legacy processes and systems. Digital technologies have been at the forefront of the transformational shift to customer-centr...

This study focuses on measuring the effect on Taiwanese airlines if they were to enlarge the seating room in airplanes per passengers’ preferences. A stated choice experiment is used to incorporate passengers’ trade-offs regarding preferred measurements; furthermore, a binary logit model is used to model the choice behavior of airline passengers. The findings show that the type of seat is a maj...

It has been the practice of the majority of airlines to reschedule passengers and flights so as to minimize flight delay. Some airlines are now starting to look at the problem of rescheduling from the perspective of the passenger and are trying to minimize the impact of missed and cancelled connecting flights on the consumer. In this paper we propose the algorithm Basic Reduction Yare Approach ...