Determinants of profitability and recovery from system-wide shocks: the case of the airline industry
Purpose: Examination of the determinants of profitability in the U.S. domestic airline industry by considering operations strategy, productivity, and service measures, while focusing the attention on the effects of the 9/11 attack. Design/methodology/approach: We propose a series of hypotheses regar...
| Autores: | , |
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| Formato: | artículo |
| Fecha de publicación: | 2012 |
| País: | España |
| Recursos: | Universitat Politècnica de Catalunya (UPC) |
| Repositorio: | UPCommons. Portal del coneixement obert de la UPC |
| Idioma: | inglés |
| OAI Identifier: | oai:upcommons.upc.edu:2099/12275 |
| Acesso em linha: | https://hdl.handle.net/2099/12275 https://dx.doi.org/10.3926/jairm.2 |
| Access Level: | acceso abierto |
| Palavra-chave: | Airlines--United States--Management Airline industry--United States Línies aèries -- Estats Units d'Amèrica Aviació comercial -- Estats Units d'Amèrica Àrees temàtiques de la UPC::Enginyeria civil::Infraestructures i modelització dels transports::Infraestructures i transport aeri Àrees temàtiques de la UPC::Aeronàutica i espai |
| Resumo: | Purpose: Examination of the determinants of profitability in the U.S. domestic airline industry by considering operations strategy, productivity, and service measures, while focusing the attention on the effects of the 9/11 attack. Design/methodology/approach: We propose a series of hypotheses regarding the effect of operations strategy, productivity, and service before and after the 9/11 attack. Using quarterly data between 1995 and 2007 we run empirical analysis using the Parks time series method. Findings: Prior to 9/11, operations strategy, productivity, and service measures are significantly related to profitability. However, after 9/11, none of the service measures are significant. Further analysis suggests that after 9/11 passengers are more forgivable to service glitches or are associating lack of service with the intensified security measures imposed after 9/11. We also find that after 9/11, the profitability of full-service carriers is improving faster than that of focused carriers. Originality/value: Our work extends earlier work in a variety of directions by accounting for more recent data, larger scope of variables, and the consideration of the 9/11 attack. We highlight an important link between an outside shock (9/11) and the importance of service that follows this shock. |
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