Competitive Profiling to Evaluate Airline Hub Connectivity

This research develops a new methodology to calculate hub connectivity and to do strategic comparative analyses for airlines. This study utilizes a strategic management tool, a competitive profiling matrix, to design a measure that enables a profiling to reveal relative strengths and weaknesses of hubs. The measure is a result of the evaluation of various critical success factors representing key components to achieve a level of excellence in terms of connectivity. The methodology provides a unique perspective with the application of a strategic profiling method and defining a wide range of structural and practical success factors. Computational experiments based on real data as well as sensitivity analyses to appraise the qualitative side of the approach are included. Connectivity scores of six major hubs and the levels of excellence that they achieve in each factor are calculated. The results show that Istanbul hub of Turkish Airlines has the largest connectivity and overall results are comparable with the results presented in literature. Finally, sensitivity analysis proves that the methodology is not sensitive to the qualitative components of the approach, and efficiency analysis indicate that all hubs perform similarly and they need to improve their efficiency.

Rekabetçi Profilleme Metodu ile Havayolu Aktarma Merkezinin Bağlantısının Ölçülmesi

Bu araştırma, aktarma merkezi bağlantı değerini hesaplamak ve havayolu merkezleri için karşılaştırmalı stratejik analiz yapmak için yeni bir yöntem geliştirmiştir. Bu yöntem, bir stratejik yönetim aracı olan rekabetçi profilleme matrisi kullanarak merkezlerin göreceli güçlü ve zayıf yönlerini ortaya çıkarmaktadır. Elde edilen ölçek, bağlantı açısından mükemmellik seviyesine ulaşmak için önemli bileşenleri temsil eden çok çeşitli kritik başarı faktörlerinin değerlenmesinin bir sonucudur. Metodoloji, stratejik profil oluşturma yönteminin uygulanması ve farklı birçok yapısal ve pratik başarı faktörlerinin tanımlanması ile mevcut literatürden farklı bakış açısı geliştirmektedir. Gerçek verilere dayanan hesaplama deneyleri ile yaklaşımın nitel tarafını değerlendirecek duyarlılık analizleri çalışmaya dahil edilmiştir. Altı ana merkezin bağlantı puanları ve her faktörde elde ettikleri mükemmellik seviyeleri hesaplanmıştır. Sonuçlar, Türk Hava Yolları'nın İstanbul'daki merkezinin en büyük bağlantı değerine sahip olduğunu ve genel sonuçların literatürde sunulan sonuçlarla karşılaştırılabilir olduğunu göstermektedir. Son olarak, duyarlılık analizi, metodun nitel bileşenlere duyarlı olmadığını ve verimlilik analizi tüm merkezlerin benzer şekilde performans gösterdiğini ve etkinliklerini iyileştirmeleri gerektiğini göstermiştir.

PDF

___

[1] S. A. Morrison and C. Winston, "The State of Airline Competition and Prospective Mergers," in Competition in the Airline Industry: Hearing Before the Task Force on Competition Policy and Antitrust Laws of the Committee on the Judiciary House of Representatives, Washington, U.S. Government Printing Office, 2004, pp. 90-96.

[2] G. N. Cook and J. Goodwin, "Airline Networks: A Comparison of Hub-and-Spoke and Point-to-Point Systems," Journal of Aviation/Aerospace Education & Research, Vol. 17, No. 2, pp. 51-60, 2008.

[3] International Civil Aviation Organization (ICAO), "Enhancement Of Air Transport Connectivity and Facilitation," in Worldwide Air Transport Conference, Sixth Meeting, 18-22 March 2013, Montreal, Canada. [Online]. Available: https://www.icao.int/Meetings/atconf6/Documents /WorkingPapers/ATConf6-wp020_en.pdf. [Accessed: Dec. 31, 2019].

[4] International Civil Aviation Organization (ICAO), "Economic Development Nov 2019: Air Transport Monthly Monitor," Air Transport Bureau, 2019. [Online]. Available: https://www.icao.int/sustainability/Documents/MonthlyMonitor 2019/MonthlyMonitor_November2019.pdf. [Accessed: Dec. 17, 2019].

[5] Z. Akça, "Comparative analysis with a new hub connectivity measure considering revenue and passenger demand," Journal of Air Transport Management, 67, pp. 34-45, 2018.

[6] G. Burghouwt and R. Redondi, "Connectivity In Air Transport Networks: An Assessment Of Models and Applications," Journal of Transport Economics and Policy, Vol. 47, No. 1, pp. 35-53, 2013.

[7] R. Doganis and N. Dennis, "Lessons in Hubbing," Airline Business, pp. 42-47, 1989.

[8] P. D. Bootsma, "Airline flight schedule development; analysis and design tools for European hinterland," PhD. dissertation, University of Twente, Utrecht, 1997.

[9] G. Burghouwt and J. d. Wit, "The Temporal Configuration of Airline Networks In Europe," Journal Of Air Transport Vol. 11 No. 3, pp. 185-198, 2005.

[10] A. Danesi, "Measuring airline hub timetable co-ordination and connectivity: definition of a new," European Transport, vol. 34, pp. 54-74, 2006. [Online]. Available: https://core.ac.uk/download/pdf/41174582.pdf. [Accessed Dec. 31, 2019].

[11] J. F. O’Connell and O. Bueno, "A study into the hub performance Emirates, Etihad Airways and Qatar Airways and their competitive position against the major European hubbing airlines," Journal of Air Transport Management, Vol. 69, pp. 257-268, 2018.

[12] A. Budde, J. d. Wit and G. Burghouwt, "Borrowing From Behavioural Science: A Novel Method for the Analysis of Indirect Temporal Connectivity at Airport Hubs," in Proceedings of the Air Transport Research Society World Conference, Athens, 2008.

[13] P. Malighetti, S. Paleari and R. Redondi, "Connectivity of the European Airport Network: Self-Help Hubbing And Business Implications," Journal of Air Transport Management, Vol. 14, No. 2, pp. 53-65, 2008.

[14] J. Veldhuis, "The Competitive Position of Airline Networks," Journal of Air Transport Management, Vol. 3, No. 4, pp. 181-188, 1997.

[15] A. Seredynski, F. Rothlauf and T. Grosche, "An airline connection builder using maximum connection lag with greedy parameter selection," Journal of Air Transport Management, Vol. 36, pp. 120-128, 2014.

[16] PWC, "Overview of Air Transport Current And Potential Air Connectivity Gaps In the CESE Region, Paper A, Final Report," PWC, 2014. [Online]. Available: https://ec.europa.eu/transport/sites/transport/files/modes/air/studies/doc/internal_market/2014-12-overview-of-air-transport-and-current-and-potential-air-connectivity-gaps-in-the-cese-region-paper-a.pdf. [Accessed: Dec. 31, 2019].

[17] J.-F. Arvis and B. Shepherd, "The Air Connectivity Index: Measuring Integration in the Global Air Transport Network", The World Bank, Policy Research Working Papers, 2011. [Online]. Available: http://documents.worldbank.org/curated/en/859151468161649899/pdf/WPS5722.pdf. [Accessed: Dec. 31, 2019].

[18] IATA, "Aviation Economic Benefits, IATA Economics Briefing No 8," IATA, 2007. [Online]. Available: https://www.iata.org/en/iata-repository/publications/economic-reports/aviation-economic-benefits. [Accessed: Dec. 31, 2019].

[19] B. Pearce, "Investing in Air Transport Connectivity to Boost National Productivity and Economic Growth," in The Travel and Tourism Competitiveness Report 2007: Furthering the Process of Economic Development. Davos: World Economic Forum, 2007.

[20] M. Logothetis and C. Miyoshi, "Network performance and competitive impact of the single hub – A case study on Turkish Airlines and Emirates," Journal of Air Transport Management, vol. 69, pp. 215-223, 2018.

[21] O. Jurevicius, "Strategic Management Insight, Competitive Profile Matrix," October 2013. [Online]. Available: https://www.strategicmanagementinsight.com/tools/competitive-profile-matrix-cpm.html. [Accessed: Aug. 10, 2018].

[22] H. Bhasin, "Marketing91, Competitive Profile Matrix and Analysis," April 2019. [Online]. Available: https://www.marketing91.com/competitive-profile-matrix/. [Accessed: Aug. 10, 2018].

[23] D. Bhattacharjee, M. Dey, "Competitive Profile Matrix: A Theoretical Review," ABAC Journal, Vol. 35, No.2, pp. 61-70, 2015.

[24] Fred R. David, Forest R. David, Strategic management concepts and cases: A competitive advantage approach (16th ed). Harlow: Pearson Education Limited, 2017.

[25] W. D. Bygrave and A. Zacharakis, Entrpreneurship (2nd ed). New Jersey: John Wily & Sons., 2011.

[26] M. Borajee and S. H. Yakchali, "Using the integrated AHP-ELECTREIII method in a competitive profile matrix," in International Conference on Financial Management and Economics, IPEDR vol.11 (2011), Singapore, Singapore, 2011. [Online]. Available: https://pdfs.semanticscholar.org/1a20/ed94539f07af7871888ebf06468ca96e232c.pdf. [Accessed: Dec. 31, 2019].

[27] C. J. Capps and M. D. Glissmeyer, "Extending the competitive profile matrix using internal factor evaluation and external factor evaluation matrix concept," The Journal of Applied Business Research, Vol. 28, No.5, pp. 1059-1062, 2012.

[28] A. Hadighi and I. Mahdavi, "A new model for strategy formulation using mahalanobis- taguchi system and clustering algorithm," Intelligent Information Management, Vol. 3, pp. 198-203, 2011.

[29] BusinessDictionay, "Critical Success Factors," businessdictionary.com. [Online]. Available: http://www.businessdictionary.com/definition/critical-success-factors-CSF.html. [Accessed: Aug. 10, 2018].

[30] OAG, "OAG Analyser," analytics.oag.com. [Online]. Available: https://analytics.oag.com/analyser-client/home. [Accessed: Oct. 25, 2018].