The Airline Profit Cycle: A System Analysis of Airline Industry Dynamics

ISBN-13: 9780367594916 / Angielski / Miękka / 2020 / 322 str.

Eva-Maria Cronrath

Opis

The airline industry has generally followed a growth trend since its inception but the industry’s financial situation is not as healthy as rising passenger numbers might suggest. This book addresses the question of why airline profits are cyclical and examines the causes and dynamics that determine the profit cycle’s shape.

Spis treści

Contents

List of Figures

List of Tables

Foreword by Peter-M. Milling

Foreword by R. John Hansman

Preface

1. The airline profit cycle as a persistent phenomenon

1.1. The development of airline traffic and cyclic financial results

1.2. Consequences of the airline profit cycle

1.3. Research objective and approach

2. Potential causes of the airline profit cycle

2.1. Literature review on business cycle drivers

2.2. Systems literature on cyclical dynamics

2.3. Existing airline profit cycle research

2.4. Industry practitioners’ views on airline profit cyclicality

2.5. Categorisation of airline profit cycle drivers

3. System Dynamics model of airline industry profit development

3.1. Need for a System Dynamics analysis

3.2. Outline of the airline profit cycle model

3.3. Decision design and mechanisms in the model

3.4. Validation of model structure

3.5. Calibration of the model for the U.S. airline industry

3.6. Confidence in the model’s behaviour and results

4. Examination of airline profitability dynamics in model experiments

4.1. Identification of cycle origin area

4.2. Approach to scenario analysis and sensitivity assessment

4.3. Influence of general economic factors on airline profits

4.4. Impact of airline industry environment on airlines’ financial performance

4.5. Airlines’ behaviour as driver of cyclicality

4.6. Main causes and dynamics constituting the airline profit cycle

5. Conclusions for the airline industry

6. References

7. Appendix

7.1. Appendix A: Cost classification

7.2. Appendix B: Background information ATA Cost Index

7.3. Appendix C: Airline profit cycle model data and equations

Index

O autorze

Eva-Maria Cronrath is Executive Assistant to the Executive Board Member for Aeronautics, German Aerospace Center (DLR), Germany.