The Good, the Bad and the Efficient : Productivity, efficiency and technical change in the Airline Industry, 2004:2008

This study models the joint production of desirable and undesirable output production (that is, CO2 emissions) of airlines. The Malmquist-Luenberger productivity index is employed to measure productivity growth when undesirable output production is regulated and unregulated. The results show that pollution abatement activities of airlines lowers productivity growth which suggests the traditional approach of measuring productivity growth, which ignores CO2 emissions, overstate "true" productivity growth.

The good, the bad, and the efficient: Productivity, efficiency, and technical change in the airline industry, 2004–11

This study models the joint production of desirable and undesirable output production (that is, CO2 emissions) of airlines. The Malmquist–Luenberger productivity index is employed to measure productivity growth when undesirable output production is incorporated into the production model. The results show that pollution abatement activities of airlines lowers productivity growth, which suggests that the traditional approach of measuring productivity growth, which ignores CO2 emissions, overstates ‘true’ productivity growth. The reliability of the results is also tested and verified using confidence intervals based on bootstrapping.

Rivalry within and between strategic networks : an investigation of the United States Automotive Industry

As a consequence of the increased incidence of collaborative arrangements between firms, the competitive environment characterising many industries has undergone profound change. It is suggested that rivalry is not necessarily enacted by individual firms according to the traditional mechanisms of direct confrontation in factor and product markets, but rather as collaborative orchestration between a number of participants or network members. Strategic networks are recognised as sets of firms within an industry that exhibit denser strategic linkages among themselves than other firms within the same industry. Based on this, strategic networks are determined according to evidence of strategic alliances between firms comprising the industry. As a result, a single strategic network represents a group of firms closely linked according to collaborative ties. Arguably, the collective outcome of these strategic relationships engineered between firms suggest that the collaborative benefits attributed to interorganisational relationships require closer examination in respect to their propensity to influence rivalry in intraindustry environments. Derived in large from the social sciences, network theory allows for the micro and macro examination of the opportunities and constraints inherent in the structure of relationships in strategic networks, establishing a relational approach upon which the conduct and performance of firms can be more fully understood. Research to date has yet to empirically investigate the relationship between strategic networks and rivalry. The limited research that has been completed utilising a network rationale to investigate competitive patterns in contemporary industry environments has been characterised by a failure to directly measure rivalry. Further, this prior research has typically embedded investigation in industry settings dominated by technological or regulatory imperatives, such as the microprocessor and airline industries. These industries, due to the presence of such imperatives, are arguably more inclined to support the realisation of network rivalry, through subscription to prescribed technological standards (eg., microprocessor industry) or by being bound by regulatory constraints dictating operation within particular market segments (airline industry). In order to counter these weaknesses, the proposition guiding research - Are patterns of rivalry predicted by strategic network membership? – is embedded in the United States Light Vehicles Industry, an industry not dominated by technological or regulatory imperatives. Further, rivalry is directly measured and utilised in research, thus distinguishing this investigation from prior research efforts. The timeframe of investigation is 1993 – 1999, with all research data derived from secondary sources. Strategic networks were defined within the United States Light Vehicles Industry based on evidence of horizontal strategic relationships between firms comprising the industry. The measure of rivalry used to directly ascertain the competitive patterns of industry participants was derived from the traditional Herfindahl Index, modified to account for patterns of rivalry observed at the market segment level. Statistical analyses of the strategic network and rivalry constructs found little evidence to support the contention of network rivalry; indeed, greater levels of rivalry were observed between firms comprising the same strategic network than between firms participating in opposing network structures. Based on these results, patterns of rivalry evidenced in the United States Light Vehicle Industry over the period 1993 – 1999 were not found to be predicted by strategic network membership. The findings generated by this research are in contrast to current theorising in the strategic network – rivalry realm. In this respect, these findings are surprising. The relevance of industry type, in conjunction with prevailing network methodology, provides the basis upon which these findings are contemplated. Overall, this study raises some important questions in relation to the relevancy of the network rivalry rationale, establishing a fruitful avenue for further research.

From ‘free’ to fee: Acceptability of airline ancillary fees and the effects on customer behavior

Businesses in various consumer service industries have begun to unbundle their service offerings by introducing numerous fees for products and services that were previously provided as “free.” Anecdotal evidence in the media indicates that these fees cause widespread public displeasure, frustration, and outrage. This paper develops a framework of fee acceptability, negative emotions, and dysfunctional customer behavior, which is tested using data from the airline industry. Findings identify the strongest effects on betrayal in the case of baggage fees, followed by charges for comfort. Also, betrayal has a direct effect on complaining, whereas anger mediates the relationship between betrayal and negative word of mouth.

Operational performance of low-cost carriers and international airlines : New evidence using a bootstrap truncated regression

Between 2001 and 2005, the US airline industry faced financial turmoil. At the same time, the European airline industry entered a period of substantive deregulation. This period witnessed opportunities for low-cost carriers to become more competitive in the market as a result of these combined events. To help assess airline performance in the aftermath of these events, this paper provides new evidence of technical efficiency for 42 national and international airlines in 2006 using the data envelopment analysis (DEA) bootstrap approach first proposed by Simar and Wilson (J Econ, 136:31-64, 2007). In the first stage, technical efficiency scores are estimated using a bootstrap DEA model. In the second stage, a truncated regression is employed to quantify the economic drivers underlying measured technical efficiency. The results highlight the key role played by non-discretionary inputs in measures of airline technical efficiency.

Regional and remote airports under stress in Australia

Australia's airline industry was born on connecting regional communities to major cities, but almost a century later, many regional and remote communities are facing the prospect of losing their air transport services. The focus of this paper is to highlight key issues and concerns surrounding remote, rural and regional airports in Australia using a network governance framework. Contributions are focused towards regional and remote airport managers, decision makers, and policy makers to stimulate further discussion towards retaining regional and remote services to communities.

Challenges in passenger terminal design : a conceptual model of passenger experience

In recent years, de-regulation in the airline industry and the introduction of low-cost carriers have conspired to produce significant changes in the airport landscape. From an airport operator’s perspective, one of the most notable has been the shift of capital revenue from traditional airline sources (through exclusive use, long term lease arrangements) to passengers (by way of fees collected from ticket sales). As a result of these developments, passengers have become recognized as major stakeholders who have the power to influence airport profitability. This link between passenger satisfaction and profitability has generated industry wide interest in the “passenger experience”. In this paper, we define the factors which influence passenger experience, namely (a) artifacts, (b) services and (c) the terminal building, and explore the challenges that exist in the current approaches to terminal design. On the basis of these insights, we propose a conceptual model of passenger experience, and motivate its use as a framework for further research into improving terminal design from a passenger oriented perspective.

Technical efficiency of mainstream airlines and low-cost carriers : New evidence using bootstrap data envelopment analysis truncated regression

Between 2001 and 2005, the US airline industry faced financial turmoil while the European airline industry entered a period of substantive deregulation. Consequently, this opened up opportunities for low-cost carriers to become more competitive in the market. To assess airline performance and identify the sources of efficiency in the immediate aftermath of these events, we employ a bootstrap data envelopment analysis truncated regression approach. The results suggest that at the time the mainstream airlines needed to significantly reorganize and rescale their operations to remain competitive. In the second-stage analysis, the results indicate that private ownership, status as a low-cost carrier, and improvements in weight load contributed to better organizational efficiency.

Frequent (flier) frustration and the dark side of word‐of‐web: exploring online dysfunctional behavior in online feedback forums

Purpose Following the perspective of frustration theory customer frustration incidents lead to frustration behavior such as protest (negative word‐of‐mouth). On the internet customers can express their emotions verbally and non‐verbally in numerous web‐based review platforms. The purpose of this study is to investigate online dysfunctional customer behavior, in particular negative “word‐of‐web” (WOW) in online feedback forums, among customers who participate in frequent‐flier programs in the airline industry. Design/methodology/approach The study employs a variation of the critical incident technique (CIT) referred to as the critical internet feedback technique (CIFT). Qualitative data of customer reviews of 13 different frequent‐flier programs posted on the internet were collected and analyzed with regard to frustration incidents, verbal and non‐verbal emotional effects and types of dysfunctional word‐of‐web customer behavior. The sample includes 141 negative customer reviews based on non‐recommendations and low program ratings. Findings Problems with loyalty programs evoke negative emotions that are expressed in a spectrum of verbal and non‐verbal negative electronic word‐of‐mouth. Online dysfunctional behavior can vary widely from low ratings and non‐recommendations to voicing switching intentions to even stronger forms such as manipulation of others and revenge intentions. Research limitations/implications Results have to be viewed carefully due to methodological challenges with regard to the measurement of emotions, in particular the accuracy of self‐report techniques and the quality of online data. Generalization of the results is limited because the study utilizes data from only one industry. Further research is needed with regard to the exact differentiation of frustration from related constructs. In addition, large‐scale quantitative studies are necessary to specify and test the relationships between frustration incidents and subsequent dysfunctional customer behavior expressed in negative word‐of‐web. Practical implications The study yields important implications for the monitoring of the perceived quality of loyalty programs. Management can obtain valuable information about program‐related and/or relationship‐related frustration incidents that lead to online dysfunctional customer behavior. A proactive response strategy should be developed to deal with severe cases, such as sabotage plans. Originality/value This study contributes to knowledge regarding the limited research of online dysfunctional customer behavior as well as frustration incidents of loyalty programs. Also, the article presents a theoretical “customer frustration‐defection” framework that describes different levels of online dysfunctional behavior in relation to the level of frustration sensation that customers have experienced. The framework extends the existing perspective of the “customer satisfaction‐loyalty” framework developed by Heskett et al.

Independent cinema in the Chinese film industry

Chinese independent cinema has developed for more than twenty years. Two sorts of independent cinema exist in China. One is underground cinema, which is produced without official approvals and cannot be circulated in China, and the other are the films which are legally produced by small private film companies and circulated in the domestic film market. This sort of ‘within-system’ independent cinema has played a significant role in the development of Chinese cinema in terms of culture, economics and ideology. In contrast to the amount of comment on underground filmmaking in China, the significance of ‘within-system’ independent cinema has been underestimated by most scholars. This thesis is a study of how political management has determined the development of Chinese independent cinema and how Chinese independent cinema has developed during its various historical trajectories. This study takes media economics as the research approach, and its major methods utilise archive analysis and interviews. The thesis begins with a general review of the definition and business of American independent cinema. Then, after a literature review of Chinese independent cinema, it identifies significant gaps in previous studies and reviews issues of traditional definition and suggests a new definition. After several case studies on the changes in the most famous Chinese directors’ careers, the thesis shows that state studios and private film companies are two essential domestic backers for filmmaking in China. After that, the body of the thesis provides an examination of the development of ‘within-system’ independent cinema. Specifically, three factors: government intervention, the majors’ performance (state studios and, later, the conglomerates) and the market conduct of independent cinema at various points in their trajectories are studied. The key findings of the study are as follows: First, most scholars have overlooked the existence and the significance of within-system Chinese independent cinema. Drawing on an American definition of the independent sector, this thesis proposes a definition of the sector in China: namely, any film that has not been financed, produced, and/or distributed by majors. The thesis also notes important contradictions in applying this definition: i.e. film-making is still dependent on policies that frame industry development. The thesis recognises that major tensions apply to filmmaking in China, which significantly differentiates the Chinese independents from those in the US. Second, the development of Chinese independent cinema is the result the rise of the private sector and the decline of the state studio system. As state studios encountered difficulties the private sector moved forward; consequently the environment improved for independent cinema. Third, before 2003, the film industry in China had little commercialisation. The government controlled independent cinema by means of license and censorship. State studios produced main melody films and Hollywood attracted most of the audiences. Many independent filmmakers focused on commercial films, thus contributing to film commercialisation. Fourth, after 2003, the film industry became increasingly fragmented. The government created distribution and exhibition opportunities for main melody films; conglomerates collaborated with Hong Kong players; Hong Kong co-productions and Hollywood occupied the film market; and small private film companies produced main melody films in order to earn meagre profits. The original contribution of the thesis is to advance the study of Chinese independent cinema. The study suggests a reasonable and practical definition of Chinese independent cinema. It shows how the Chinese government authorities have implemented economic measures to gain ideological control in the film industry. Finally, this the first study on Chinese independent cinema applying a synthesis of economic, political and historical perspectives.

The taxation of international maritime leasing profits : has the commissioners ship come in?

In light of McDermott Industries (AUST) Pty Ltd v Commissioner of Taxation, and Draft Taxation Ruling TR 2006/D8, this article considers the current Australian taxation position of profits arising from the cross-border leasing of vessels in the maritime industry. It focuses on the tax treaties to which Australia is a party, in particular the application of the business profits provisions of those treaties, and the deemed existence of a permanent establishment where substantial equipment, owned by a fiscal non-resident, is used within Australian waters.

The challenges of adopting design-led innovative strategies in not for profits : the role of consumers, culture and employees

Major changes to regulations, funding and consumer demand in the Australian aged care industry are driving not for profits in this sector to reshape and rethink the services they offer and the ways in which they deliver their services to consumers. Many not for profit organisations facing these new challenges are also facing organisational cultural barriers in the development and implementation of innovative strategies. This paper presents a case study where one organisation, using design led innovation, explored consumer insights and employee values to find new ways to facilitate change.

Commercial successes in the music industry

Commercial success in the music industry is obviously related to one’s ability to use musical artisanship as a basis for generating profits and to accumulate substantial wealth. That may seem fairly straightforward, but commercial success is an elusive concept that is continuously negotiated within the industry to determine both what should be considered “success” as well as how it should be measured. This entry discusses commercial success in the popular music industry and strategies used to achieve it.