Determinants of Profitability and Recovery from System-Wide Shocks: The Case of the Airline Industry

• Main Authors: Benny Mantin, Jen-Hung Edward Wang
• Format: Article
• Language: English
• Published: OmniaScience 2012-05-01
• Series: Journal of Airline and Airport Management
• Subjects: empicial analysis; 9/11; profitability; quality; operations strategy; airlines
• Online Access: http://www.jairm.org/index.php/jairm/article/view/2

<p class="textnoindent">This paper examines the determinants of profitability in the U.S. domestic airline industry, segmented into: operations strategy, productivity, and service measures, using quarterly data between 1995 and 2007. The analysis is performed separately on data prior and post 9/11 attack, revealing, among others, that after 9/11 the profitability of full-service carriers is improving faster than that of focused carriers, and that passengers are more forgivable to service glitches after 9/11 or possibly are associating lack of service with the intensified security measures imposed after 9/11. Focusing the analysis on determinants of consumers’ complaints we find further support for these arguments.</p>