Hub Premium, Airport Dominance and Market Power in the European Airline Industry.

Using evidence from an original dataset of more than 12 million fares, this study sheds light on two issues relating to the pricing behaviour of the main European airlines: 1) the extent to which an airline’s dominant position at the origin airport, at the route and the city-pair level affects the airlines’ market power; 2) whether fares follow a monotonic time path consistent with the pursuing of an inter-temporal price discrimination strategy. Our estimates reveal that enjoying a dominant position within a route is conducive to higher fares, possibly because of the limited size of many “natural monopoly” routes that facilitate the incumbent’s engagement in a limit pricing strategy. On the contrary, a larger share within a city-pair does not seem to facilitate the exercise of market power, thereby suggesting the existence of a large degree of substitutability between the routes in a city-pair.on-line pricing; price discrimination; dispersion; yield management.

Developing A Methodology In Aviation Risk Management Based On Susceptibility

Pengurusan penghidupan adalah satu konsep yang dikembangkan daripada konsep penghidupan kapal terbang perang. Survivability management is a concept evolves from aircraft combat survivability concept

THE IMPACT OF THE EU-US OPEN SKIES AGREEMENT ON INTERNATIONAL TRAVEL AND CARBON DIOXIDE EMISSIONS

We use a model of domestic and international tourist numbers and flows to estimate the impact of the EU-US Open Skies agreement that is to take effect in March 2008. The Open Aviation Area will result in increased competition between transatlantic carriers and consequently falls in the cost of flights, therefore we look at the change in visitor numbers from the US into the EU and corresponding CO2 emissions. We find that passenger numbers arriving from the US to the EU will increase by approximately 1% and 14% depending on the magnitude of the price reductions. This increase in passenger numbers does not however result in a corresponding rise in emissions as arrivals into other countries from the US fall by a comparable amount. The number of tourist arrivals from the US to countries outside of the EU will fall and overall emissions would then increase by a maximum of 0.7%. If we assume that domestic holidays and foreign holidays are close substitutes these effects are strengthened and US passengers switch from domestic trips to foreign destinations as airfares converge.International tourism, open skies agreement, carbon dioxide emissions

Información analizada crítica de la Asociación de Transporte Aéreo Internacional (Artículo de divulgación)

La Asociación de Transporte Aéreo Internacional tiene como objetivo representar a la industria de las aerolíneas aumentando la conciencia sobre los beneficios de las aerolíneas para las economías nacionales y, de esta manera, mejorando la toma de decisiones con respecto a las actividades de las aerolíneas. La integridad es un valor importante si se espera que todas las aerolíneas miembro tengan confianza en el deber de la organización de proteger sus intereses. El principal beneficio que pueden obtener las aerolíneas al unirse a la IATA es la capacidad de estar adecuadamente representadas por una organización cuya voz en la industria es poderosa. Las aerolíneas miembro también tienen asegurado el éxito financiero, ya que la IATA recomienda las mejores prácticas que deben implementarse para mantener la seguridad, la sostenibilidad ambiental y los procesos eficientes. En última instancia, el papel de la IATA en la defensa de los derechos de las aerolíneas ha sido influyente y la mejora del desempeño en la industria es evidencia de que los esfuerzos de la asociación han sido fructífero

Developing A Methodology In Aviation Risk Management Using Susceptibility And Vulnerability Application For Airline Concerning Air Crisis [TL553.5. N576 2007 f rb].

Pengurusan penghidupan adalah satu konsep yang dikembangkan daripada konsep penghidupan kapal terbang perang. Ia boleh dibahagikan kepada dua kategori, iaitu pengurusan kepekaan dan pengurusan kekuatan. Survivability management is a concept evolves from aircraft combat survivability concept. It can be divided into two main categories, namely susceptibility and vulnerability managemen

Adaptation strategies of airline travel agencies to the dynamics of airline industry in Nigeria

The role of airline travel agencies in a changing operational environment depends on their ability to adapt and survive in the airline travel industry. This paper examines the adaptation strategies airline travel agencies adopt to remain in business. Data for this paper was obtained through multi-stage sampling system that relied on first, the use of purposive sampling technique in the selection of the sampled locations. The second stage was the adoption of systematic sampling technique which involved the selection of the airline travel agencies in the selected locations. Thereafter, the questionnaire was administered to the managers of the selected travel agencies. The method of data analysis relied on both frequency tables and Principal Component Analysis (PCA). The results indicate that majority of the managers are males (66%) with 66.3% of the respondents having their duration of length of service as air travel agents between 6-10 years. Furthermore, the main constraint affecting airline travel agency operations is the problem of e-commerce. The results of the PCA also reveal that management fees has a component loading of 0.897, transaction fees (0.883) and recharge card sales (0.800) are the three most dominant business diversification strategies adopted by the air travel agencies. These are the adaptation techniques employed by the agencies to survive in business. The paper therefore recommends that for business entities to remain afloat, they need to, among other things, diversify their business operations in order to increase their revenue base.Keywords: Adaptation, strategies, travel agencies, dynamics, constraint

Dynamics of Implementation of Mitigating Measures to Reduce CO2 Emissions from Commercial Aviation

Increasing demand for air transportation and growing environmental concerns motivate the need to implement measures to reduce CO2 emissions from aviation. Case studies of historical changes in the aviation industry have shown that the implementation of changes generally followed S-curves with relatively long time–constants. This research analyzed the diffusion characteristics of a portfolio of CO2 emission mitigating measures and their relative contribution to cumulative system wide improvements. A literature review identified 41 unique measures, including (1) technological improvements, (2) operational improvements, and (3) the use of alternative fuels. It was found that several operational changes can be implemented in the short term but are unlikely to significantly reduce CO2 emissions. Technology retrofits and some operational changes can be implemented in the medium term. 2nd and 3rd generation biofuels can significantly reduce carbon emissions but are likely to have long diffusion times and may not be available in sufficient quantities to the aviation industry. Technology measures in the form of next generation aircraft have the highest CO2 reduction potential, but only in the long term due to slow fleet turnover. An Aircraft Diffusion Dynamic Model (ADDM) was developed using System Dynamics modeling techniques to understand how the fleet efficiency will be influenced by the entry of various generations of aircraft with different levels of emissions performance. The model was used to evaluate effects of several future potential scenarios on the US narrow body jet fleet as well as their sensitivity to S-curve parameters. Results from the model showed that strategies that emphasize the early entry into service of available technology, as opposed to waiting and delaying entry for more fuel- efficient technology, have greater potential to improve fleet fuel-burn performance. Also, strategies that incentivize early retirement of older aircraft have marginal potential for reducing fuel burn. Future demand scenarios showed that the infusion of fuel-efficient aircraft alone is unlikely to reduce emissions below 2006 levels. Instead, a portfolio of measures that also include demand reduction mechanisms, operational improvements, and adoption of alternative fuels will be required in order to limit the growth of CO2 emissions from aviation.This work was supported by the MIT/Masdar Institute of Science and Technology under grant number Mubadala Development Co. Agreement 12/1/06