Service Brand Relationship Quality: Hot or Cold?

Customers’ long-term brand relations are crucial drivers of a service brand’s sustainable competitive advantage. This research empirically examines the quality of customer-service brand relationships in the context of an airline’s frequent flyer program. The authors show that service brand relationship quality (BRQ) involves both a hot (based on emotions) and a cold (based on objectrelevant beliefs) component. They find that these two components have different implications for a service brand’s performance and are at least partially driven by different antecedents whose relative importance changes over time. Specifically, cold BRQ is important for word-of-mouth behavior and is strongly driven by partner quality (i.e., the generalized assessment of the brand in its role as a relationship counterpart). Hot BRQ, on the other hand, has a stronger impact on willingness to pay a price premium and consideration set size. In early stages of a customer-brand relationship hot BRQ is more strongly driven by self-congruence (i.e., consumer’s perception of the fit between his/her self and the brand’s personality), in later stages partner quality becomes more relevant. The authors discuss the implications of their findings for the development of BRQ and the implementation of alternative growth strategies in a services context.

Shadow Profit Maximization and a Generalized Measure of Inefficiency

Determining the profit maximizing input-output bundle of a firm requires data on prices. This paper shows how endogenously determined shadow prices can be used in place of actual prices to obtain the optimal input-output bundle where the firm.s shadow profit is maximized. This approach amounts to an application of the Weak Axiom of Profit Maximization (WAPM) formulated by Varian (1984) based on shadow prices rather than actual prices. At these prices the shadow profit of a firm is zero. Thus, the maximum profit that could have been attained at some other input-output bundle is a measure of the inefficiency of the firm. Because the benchmark input-output bundle is always an observed bundle from the data, it can be determined without having to solve any elaborate programming problem. An empirical application to U.S. airlines data illustrates the proposed methodology.

A Simple Statistical Test of Violation of the Weak Axiom of Cost Minimization

A problem with a practical application of Varian.s Weak Axiom of Cost Minimization is that an observed violation may be due to random variation in the output quantities produced by firms rather than due to inefficiency on the part of the firm. In this paper, unlike in Varian (1985), the output rather than the input quantities are treated as random and an alternative statistical test of the violation of WACM is proposed. We assume that there is no technical inefficiency and provide a test of the hypothesis that an observed violation of WACM is merely due to random variations in the output levels of the firms being compared.. We suggest an intuitive approach for specifying a value of the variance of the noise term that is needed for the test. The paper includes an illustrative example utilizing a data set relating to a number of U.S. airlines.

Flexibility in Airline Business Models with Core Competence as an Indicator.

The airline industry is often unstable and unpredictable forcing airlines to restructure and create flexible strategies that can respond to external operating environmental changes. In turbulent and competitive environments, firms with higher flexibility perform better and the value of these flexibilities depends on factors of uncertainty in the competitive environment. A model is sought for and arrived at, that shows how an airline business model will function in an uncertain environment with the least reduction in business performance over time. An analysis of the business model flexibility of 17 Airlines from Asia, Europe and Oceania, that is done with core competence as the indicator reveals a picture of inconsistencies in the core competence strategy of certain airlines and the corresponding reduction in business performance. The performance variations are explained from a service oriented core competence strategy employed by airlines that ultimately enables them in having a flexible business model that not only increases business performance but also helps in reducing the uncertainties in the internal and external operating environments.

The Analysis of Airline Business Models in the Development of Possible Future Business Options

Innovations in the current interconnected world of organizations have lead to a focus on business models as a fundamental statement of direction and identity. Although industry transformations generally emanate from technological changes, recent examples suggest they may also be due to the introduction of new business models. In the past, different types of airline business models could be clearly separated from each other. However, this has changed in recent years partly due to the concentration process and partly to reaction caused by competitive pressure. At least it can be concluded that in future the distinction of different business models will remain less clear. To advance the use of business models as a concept, it is essential to be able to compare and perform analyses to identify the business models that may have the highest potential. This can essentially contribute to understanding the synergies and incompatibilities in the case of two airlines that are going in for a merger. This is illustrated by the example of Swiss Air-Lufthansa merger analysis. The idea is to develop quantitative methods and tools for comparing and analyzing Aeronautical/Airline business models. The paper identifies available methods of comparing airline business models and lays the ground work for a quantitative model of comparing airline business models. This can be a useful tool for business model analysis when two airlines are merged

Integrated robust airline schedule development

In air transportation, airline profitability is influenced by the airline's ability to build flight schedules. In order to generate operational schedules, airlines engage in a complex decision-making process, referred to as airline schedule planning. Up to now, the generation of flight schedules has been separated and optimized sequentially. The schedule design has been traditionally decomposed into two sequential steps. The frequency planning and the timetable development. The purpose of the second problem of schedule development, fleet assignment, is to assign available aircraft types to flight legs such that seating capacity on an assigned aircraft matches closely with flight demand and such that costs are minimized. Our work integrates these planning phases into one single model in order to produce more economical solutions and create fewer incompatibilities between the decisions. We propose an integrated robust approach for the schedule development step. We design the timetable ensuring that enough time is available to perform passengers’ flight connections, making the system robust avoiding misconnected passengers. An application of the model for a simplified IBERIA network is shown.

Aircraft flight trajectory deviation in the standard instrument departures. Operators penalties.

In the recent years many problems are emerging due to the aircraft noise on the airport surrounding areas. The solution to this problem is not easy considering that the neighbourhood asks for the reduction of the number of aircraft operations and the airlines ask for a growing demand in the number of operations in the major airports. So the airport and regulatory authorities try to get a solution imposing a fine to the aircraft which its actual trajectory differs from the nominal one more than a lateral deviation. But, which is the value of this deviation?. The current situation is that many operators have to pay a lot of money for exceeding a deviation which has been established without operational criteria. This paper presents the results of a research program which is being carried out by the authors which aims to determine the "delta" deviation to be used for this purpose. In addition it is proposed a customized method per SID and per airport to be used for determining the maximum allowed lateral deviation by which if the aircraft is within it, then none fine will be imposed.

Biokerosene from coconut, babassu, camelina and palm kernel oils: production and properties of their blends with fossil kerosene

On December 20th 2006 the European Commission approved a law proposal to include the civil aviation sector in the European market of carbon dioxide emission rights [European Union Emissions Trading System, EUETS). On July 8th 2009, the European Parliament and Conseil agreed that all flights leaving or landing in the EU airports starting from January 1st 2012 should be included in the EUETS. On November 19th 2008, the EU Directive 2008/101/CE [1] included the civil aviation activities in the EUETS, and this directive was transposed by the Spanish law 13/2010 of July 5th 2010 [2]. Thus, in 2012 the aviation sector should reduce their emissions to 97 % of the mean values registered in the period 2004-2006, and for 2013 these emission reductions should reach 95 % of the mean values for that same period. Trying to face this situation, the aviation companies are planning seriously the use of alternative jet fuels to reduce their greenhouse gas emissions and to lower their costs. However, some US airlines have issued a lawsuit before the European Court of Justice based in that this EU action violates a long standing worldwide aviation treaty, the Chicago convention of 1944, and also the Chinese aviation companies have rejected to pay any EU carbon dioxide tax [3]. Moreover, the USA Departments of Agriculture and Energy and the Navy will invest a total of up to $150 million over three years to spur production of aviation and marine biofuels for commercial and military applications [4]. However, the jet fuels should fulfill a set of extraordinarily sensitive properties to guarantee the safety of planes and passengers during all the flights.

Robustness and Recoverability in Transport Logistics

Abstract Transport is the foundation of any economy: it boosts economic growth, creates wealth, enhances trade, geographical accessibility and the mobility of people. Transport is also a key ingredient for a high quality of life, making places accessible and bringing people together. The future prosperity of our world will depend on the ability of all of its regions to remain fully and competitively integrated in the world economy. Efficient transport is vital in making this happen. Operations research can help in efficiently planning the design and operating transport systems. Planning and operational processes are fields that are rich in combinatorial optimization problems. These problems can be analyzed and solved through the application of mathematical models and optimization techniques, which may lead to an improvement in the performance of the transport system, as well as to a reduction in the time required for solving these problems. The latter aspect is important, because it increases the flexibility of the system: the system can adapt in a faster way to changes in the environment (i.e.: weather conditions, crew illness, failures, etc.). These disturbing changes (called disruptions) often enforce the schedule to be adapted. The direct consequences are delays and cancellations, implying many schedule adjustments and huge costs. Consequently, robust schedules and recovery plans must be developed in order to fight against disruptions. This dissertation makes contributions to two different fields: rail and air applications. Robust planning and recovery methods are presented. In the field of railway transport we develop several mathematical models which answer to RENFE’s (the major railway operator in Spain) needs: 1. We study the rolling stock assignment problem: here, we introduce some robust aspects in order to ameliorate some operations which are likely to fail. Once the rolling stock assignment is known, we propose a robust routing model which aims at identifying the train units’ sequences while minimizing the expected delays and human resources needed to perform the sequences. 2. It is widely accepted that the sequential solving approach produces solutions that are not global optima. Therefore, we develop an integrated and robust model to determine the train schedule and rolling stock assignment. We also propose an integrated model to study the rolling stock circulations. Circulations are determined by the rolling stock assignment and routing of the train units. 3. Although our aim is to develop robust plans, disruptions will be likely to occur and recovery methods will be needed. Therefore, we propose a recovery method which aims to recover the train schedule and rolling stock assignment in an integrated fashion all while considering the passenger demand. In the field of air transport we develop several mathematical models which answer to IBERIA’s (the major airline in Spain) needs: 1. We look at the airline-scheduling problem and develop an integrated approach that optimizes schedule design, fleet assignment and passenger use so as to reduce costs and create fewer incompatibilities between decisions. Robust itineraries are created to ameliorate misconnected passengers. 2. Air transport operators are continuously facing competition from other air operators and different modes of transport (e.g., High Speed Rail). Consequently, airline profitability is critically influenced by the airline’s ability to estimate passenger demands and construct profitable flight schedules. We consider multi-modal competition including airline and rail, and develop a new approach that estimates the demand associated with a given schedule; and generates airline schedules and fleet assignments using an integrated schedule design and fleet assignment optimization model that captures the impacts of schedule decisions on passenger demand.

Contributions to trajectory prediction theory and its application to arrival management for air traffic control

La gestión del tráfico aéreo (Air Traffic Management, ATM) está experimentando un cambio de paradigma hacia las denominadas operaciones basadas trayectoria. Bajo dicho paradigma se modifica el papel de los controladores de tráfico aéreo desde una operativa basada su intervención táctica continuada hacia una labor de supervisión a más largo plazo. Esto se apoya en la creciente confianza en las soluciones aportadas por las herramientas automatizadas de soporte a la decisión más modernas. Para dar soporte a este concepto, se precisa una importante inversión para el desarrollo, junto con la adquisición de nuevos equipos en tierra y embarcados, que permitan la sincronización precisa de la visión de la trayectoria, basada en el intercambio de información entre ambos actores. Durante los últimos 30 a 40 años las aerolíneas han generado uno de los menores retornos de la inversión de entre todas las industrias. Sin beneficios tangibles, la industria aérea tiene dificultades para atraer el capital requerido para su modernización, lo que retrasa la implantación de dichas mejoras. Esta tesis tiene como objetivo responder a la pregunta de si las capacidades actualmente instaladas en las aeronaves comerciales se pueden aplicar para lograr la sincronización de la trayectoria con el nivel de calidad requerido. Además, se analiza en ella si, conjuntamente con mejoras en las herramientas de predicción trayectorias instaladas en tierra en para facilitar la gestión de las arribadas, dichas capacidades permiten obtener los beneficios esperados en el marco de las operaciones basadas en trayectoria. Esto podría proporcionar un incentivo para futuras actualizaciones de la aviónica que podrían llevar a mejoras adicionales. El concepto operacional propuesto en esta tesis tiene como objetivo permitir que los aviones sean pilotados de una manera consistente con las técnicas actuales de vuelo optimizado. Se permite a las aeronaves que desciendan en el denominado “modo de ángulo de descenso gestionado” (path-managed mode), que es el preferido por la mayoría de las compañías aéreas, debido a que conlleva un reducido consumo de combustible. El problema de este modo es que en él no se controla de forma activa el tiempo de llegada al punto de interés. En nuestro concepto operacional, la incertidumbre temporal se gestiona en mediante de la medición del tiempo en puntos estratégicamente escogidos a lo largo de la trayectoria de la aeronave, y permitiendo la modificación por el control de tierra de la velocidad de la aeronave. Aunque la base del concepto es la gestión de las ordenes de velocidad que se proporcionan al piloto, para ser capaces de operar con los niveles de equipamiento típicos actualmente, dicho concepto también constituye un marco en el que la aviónica más avanzada (por ejemplo, que permita el control por el FMS del tiempo de llegada) puede integrarse de forma natural, una vez que esta tecnología este instalada. Además de gestionar la incertidumbre temporal a través de la medición en múltiples puntos, se intenta reducir dicha incertidumbre al mínimo mediante la mejora de las herramienta de predicción de la trayectoria en tierra. En esta tesis se presenta una novedosa descomposición del proceso de predicción de trayectorias en dos etapas. Dicha descomposición permite integrar adecuadamente los datos de la trayectoria de referencia calculada por el Flight Management System (FMS), disponibles usando Futuro Sistema de Navegación Aérea (FANS), en el sistema de predicción de trayectorias en tierra. FANS es un equipo presente en los aviones comerciales de fuselaje ancho actualmente en la producción, e incluso algunos aviones de fuselaje estrecho pueden tener instalada avionica FANS. Además de informar automáticamente de la posición de la aeronave, FANS permite proporcionar (parte de) la trayectoria de referencia en poder de los FMS, pero la explotación de esta capacidad para la mejora de la predicción de trayectorias no se ha estudiado en profundidad en el pasado. La predicción en dos etapas proporciona una solución adecuada al problema de sincronización de trayectorias aire-tierra dado que permite la sincronización de las dimensiones controladas por el sistema de guiado utilizando la información de la trayectoria de referencia proporcionada mediante FANS, y también facilita la mejora en la predicción de las dimensiones abiertas restantes usado un modelo del guiado que explota los modelos meteorológicos mejorados disponibles en tierra. Este proceso de predicción de la trayectoria de dos etapas se aplicó a una muestra de 438 vuelos reales que realizaron un descenso continuo (sin intervención del controlador) con destino Melbourne. Dichos vuelos son de aeronaves del modelo Boeing 737-800, si bien la metodología descrita es extrapolable a otros tipos de aeronave. El método propuesto de predicción de trayectorias permite una mejora en la desviación estándar del error de la estimación del tiempo de llegada al punto de interés, que es un 30% menor que la que obtiene el FMS. Dicha trayectoria prevista mejorada se puede utilizar para establecer la secuencia de arribadas y para la asignación de las franjas horarias para cada aterrizaje (slots). Sobre la base del slot asignado, se determina un perfil de velocidades que permita cumplir con dicho slot con un impacto mínimo en la eficiencia del vuelo. En la tesis se propone un nuevo algoritmo que determina las velocidades requeridas sin necesidad de un proceso iterativo de búsqueda sobre el sistema de predicción de trayectorias. El algoritmo se basa en una parametrización inteligente del proceso de predicción de la trayectoria, que permite relacionar el tiempo estimado de llegada con una función polinómica. Resolviendo dicho polinomio para el tiempo de llegada deseado, se obtiene de forma natural el perfil de velocidades optimo para cumplir con dicho tiempo de llegada sin comprometer la eficiencia. El diseño de los sistemas de gestión de arribadas propuesto en esta tesis aprovecha la aviónica y los sistemas de comunicación instalados de un modo mucho más eficiente, proporcionando valor añadido para la industria. Por tanto, la solución es compatible con la transición hacia los sistemas de aviónica avanzados que están desarrollándose actualmente. Los beneficios que se obtengan a lo largo de dicha transición son un incentivo para inversiones subsiguientes en la aviónica y en los sistemas de control de tráfico en tierra. ABSTRACT Air traffic management (ATM) is undergoing a paradigm shift towards trajectory based operations where the role of an air traffic controller evolves from that of continuous intervention towards supervision, as decision making is improved based on increased confidence in the solutions provided by advanced automation. To support this concept, significant investment for the development and acquisition of new equipment is required on the ground as well as in the air, to facilitate the high degree of trajectory synchronisation and information exchange required. Over the past 30-40 years the airline industry has generated one of the lowest returns on invested capital among all industries. Without tangible benefits realised, the airline industry may find it difficult to attract the required investment capital and delay acquiring equipment needed to realise the concept of trajectory based operations. In response to these challenges facing the modernisation of ATM, this thesis aims to answer the question whether existing aircraft capabilities can be applied to achieve sufficient trajectory synchronisation and improvements to ground-based trajectory prediction in support of the arrival management process, to realise some of the benefits envisioned under trajectory based operations, and to provide an incentive for further avionics upgrades. The proposed operational concept aims to permit aircraft to operate in a manner consistent with current optimal aircraft operating techniques. It allows aircraft to descend in the fuel efficient path managed mode as preferred by a majority of airlines, with arrival time not actively controlled by the airborne automation. The temporal uncertainty is managed through metering at strategically chosen points along the aircraft’s trajectory with primary use of speed advisories. While the focus is on speed advisories to support all aircraft and different levels of equipage, the concept also constitutes a framework in which advanced avionics as airborne time-of-arrival control can be integrated once this technology is widely available. In addition to managing temporal uncertainty through metering at multiple points, this temporal uncertainty is minimised by improving the supporting trajectory prediction capability. A novel two-stage trajectory prediction process is presented to adequately integrate aircraft trajectory data available through Future Air Navigation Systems (FANS) into the ground-based trajectory predictor. FANS is standard equipment on any wide-body aircraft in production today, and some single-aisle aircraft are easily capable of being fitted with FANS. In addition to automatic position reporting, FANS provides the ability to provide (part of) the reference trajectory held by the aircraft’s Flight Management System (FMS), but this capability has yet been widely overlooked. The two-stage process provides a ‘best of both world’s’ solution to the air-ground synchronisation problem by synchronising with the FMS reference trajectory those dimensions controlled by the guidance mode, and improving on the prediction of the remaining open dimensions by exploiting the high resolution meteorological forecast available to a ground-based system. The two-stage trajectory prediction process was applied to a sample of 438 FANS-equipped Boeing 737-800 flights into Melbourne conducting a continuous descent free from ATC intervention, and can be extrapolated to other types of aircraft. Trajectories predicted through the two-stage approach provided estimated time of arrivals with a 30% reduction in standard deviation of the error compared to estimated time of arrival calculated by the FMS. This improved predicted trajectory can subsequently be used to set the sequence and allocate landing slots. Based on the allocated landing slot, the proposed system calculates a speed schedule for the aircraft to meet this landing slot at minimal flight efficiency impact. A novel algorithm is presented that determines this speed schedule without requiring an iterative process in which multiple calls to a trajectory predictor need to be made. The algorithm is based on parameterisation of the trajectory prediction process, allowing the estimate time of arrival to be represented by a polynomial function of the speed schedule, providing an analytical solution to the speed schedule required to meet a set arrival time. The arrival management solution proposed in this thesis leverages the use of existing avionics and communications systems resulting in new value for industry for current investment. The solution therefore supports a transition concept from mixed equipage towards advanced avionics currently under development. Benefits realised under this transition may provide an incentive for ongoing investment in avionics.

Estrategias de fijación de precios de las aerolíneas de bajo coste: una aproximación al modelo de la rivalidad ampliada

En la presente tesis doctoral se realiza una aproximación a las estrategias de fijación de precios de las aerolíneas de bajo coste europeas a partir del estudio de su entorno (demanda, proveedores, rivales, productos sustitutos, etcétera). Para ello se emplea el marco del modelo de las cinco fuerzas descrito por Michael Porter. Para su análisis, se utiliza un método combinado de Análisis Factorial (ACP) y datos de panel.

Ukraine, Russia and the need for more flexibility in EU foreign policy-making. CEPS Policy Brief No. 320, 25 July 2014

After the illegal annexation of Crimea and Russia’s indirect responsibility for the downing of Malaysia Airlines flight MH17 in eastern Ukraine, Steven Blockmans asks what it will take before the EU is able to confront a conflict on its borders and prove to both its own citizens and third countries that it has a meaningful role to play in foreign policy. With numerous competing national interests and some member states unwilling to pay different prices for collective action, any sector-wide EU sanctions are likely to lack serious bite. In an effort to paper over the cracks, the author makes a number of recommendations for policy-makers.

The consequences of airline mergers since deregulation : report of the Civil Aeronautics Board and the Department of Transportation /

April, 1982.

Pilots' Exhibit no. 1-174.

Reproduced from typewritten copy.

Occupational earnings in certificated air carriers, June 1984.

"Summary 85-5."