Impact of landing fees on airlines’ choice of aircraft size and service frequency in duopoly markets

Wei, Wenbin

doi:10.1016/j.jairtraman.2006.07.008

Cited by 14 publications

(9 citation statements)

References 7 publications

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“…In another circumstance, C 2 (landing/take-off fee) shows a significant influence on C 11 (economic value). It can be justified by the fact that Table 7 Normalized total-influential matrix T nor (i.e., weighted supermatrix) The data values in bold are equal to or greater than threshold value 0.083, which signify a strong degree of relationship between attributes Exploring critical attributes during air traffic congestion with a fuzzy DEMATEL-ANP technique… landing/take-off fees vary between airports-congested ones usually charge higher landing/take-off fees because of the law of supply and demand, while less congested airports may charge less because demand is not at all as high [31].…”

Section: (Landing/take-off Fee)mentioning

confidence: 99%

Exploring critical attributes during air traffic congestion with a fuzzy DEMATEL–ANP technique: a case study in Ninoy Aquino International Airport

Bongo

Ocampo

2017

J. Mod. Transport.

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The constant growth of air travel in the Philippines has brought about significant consequences to air traffic congestion. Given limited resources, major airports seek to address this issue while considering various attributes generally affecting air transportation. This paper adopts fuzzy decision-making trial and evaluation laboratory-analytic network process (DEMATEL-ANP) to identify the most critical attributes in the commercial aviation industry. A case study participated by key experts of Ninoy Aquino International Airport was conducted to illustrate the proposed approach. The fuzzy DEMATEL-ANP model performed satisfactorily as it was able to extract the global priority vectors of attributes under a fuzzy environment. The results showed that aviation safety is most prioritized, as can also be seen from the significant influence it brings on other attributes. Following next to safety in terms of priority are attributes that address the general air transportation system such as economic value, environmental value, social value, equitable treatment of competing airline, customer goodwill, and utilization of runway and terminal. Then, attributes relating to passenger cost, fuel cost, extra crew cost, landing/take-off fee, and cost of using flight routes are of last priority. Given the order of priorities and criticality of each attribute, shortterm and long-term policies can be framed accordingly to propose air traffic flow management actions that can best address the issue on congestion.

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Section: (Landing/take-off Fee)mentioning

confidence: 99%

Exploring critical attributes during air traffic congestion with a fuzzy DEMATEL–ANP technique: a case study in Ninoy Aquino International Airport

Bongo

Ocampo

2017

J. Mod. Transport.

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“…With these assumptions, the reliability and applicability of their model might be questionable to certain extent. Similarly, Wei [31] employed a one-shot simultaneous game theory model to analyze the airline's decision on aircraft choice and service frequency in duopoly markets. The competing airlines were assumed to select aircraft size and service frequency concurrently.…”

Section: A Brief Review Of Fleet Planningmentioning

confidence: 99%

Fleet Planning Decision-Making: Two-Stage Optimization with Slot Purchase

Teoh

Khoo²

2016

Journal of Optimization

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Essentially, strategic fleet planning is vital for airlines to yield a higher profit margin while providing a desired service frequency to meet stochastic demand. In contrast to most studies that did not consider slot purchase which would affect the service frequency determination of airlines, this paper proposes a novel approach to solve the fleet planning problem subject to various operational constraints. A two-stage fleet planning model is formulated in which the first stage selects the individual operating route that requires slot purchase for network expansions while the second stage, in the form of probabilistic dynamic programming model, determines the quantity and type of aircraft (with the corresponding service frequency) to meet the demand profitably. By analyzing an illustrative case study (with 38 international routes), the results show that the incorporation of slot purchase in fleet planning is beneficial to airlines in achieving economic and social sustainability. The developed model is practically viable for airlines not only to provide a better service quality (via a higher service frequency) to meet more demand but also to obtain a higher revenue and profit margin, by making an optimal slot purchase and fleet planning decision throughout the long-term planning horizon.

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“…To pre-empt this disadvantage it is necessary to choose an aircraft according to the future demand situation. Based on current average load factors of 70-80 per cent (see AEA, 2008, p. 8), this would mean additional cost benefits (see Wei, 2006). However, if an airline loses many time-sensitive passengers, financial penalties are likely.…”

Section: Increase In Aircraft Size/reduction Of Flight Frequencymentioning

confidence: 99%

Peak-Load Pricing and Airline Reactions at European Airports

Evangelinos

Stangl

Obermeyer

2012

JATS

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Conventional wisdom in the economics of pricing holds that peak-load pricing can enhance welfare in cases where demand peaks are clearly identifiable and highly predictable. However, this pricing tool has not found acceptance among airlines in the past. In the very few cases in which peak-load pricing has been introduced, regulators have faced strong opposition from airlines. Recent research has focused on whether airlines could pass the additional costs associated with peak-load pricing on to passengers. Expanding on this work, this paper assesses how peak-load pricing would impact airline costs and forecasts howairlines would react to the implementation of a peak-load pricing regime. We use a simultaneous autoregressive model to predict airline pricing reactions. Our findings indicate that for certain routes, airlines would subsidize revenue decreases in off-peak times with price increases during peak times. This finding corroborates the perception held by airlines that a peak-load pricing regime would encourage new competitors to enter the market at off-peak times.

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Impact of landing fees on airlines’ choice of aircraft size and service frequency in duopoly markets

Cited by 14 publications

References 7 publications

Exploring critical attributes during air traffic congestion with a fuzzy DEMATEL–ANP technique: a case study in Ninoy Aquino International Airport

Exploring critical attributes during air traffic congestion with a fuzzy DEMATEL–ANP technique: a case study in Ninoy Aquino International Airport

Fleet Planning Decision-Making: Two-Stage Optimization with Slot Purchase

Peak-Load Pricing and Airline Reactions at European Airports

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