Browsing by Author "Lei, Zheng"

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    Airport Dominance and Airline Pricing Power: An Investigation of Hub Premiums in the Chinese Domestic Market
    (Cranfield University, 2013-12) Chen, Ruowei; Lei, Zheng
    Concerns on market power conferred by airport dominance and the debates of hub premiums have attracted longstanding attention from governments and academics alike. Most previous studies mainly focus on the fully deregulated markets such as the United States and Europe, what remains unknown is how such effects change when a country evolves from a tightly controlled regime to a deregulated market. This research analyses the effects of airport dominance on airline pricing power with the empirical study based on the Chinese domestic market using fixed- effect panel data models. Results from the regression analysis indicate that airport dominance is the most important source of pricing power in the gradually deregulated Chinese domestic market. Hub carriers are able to charge higher prices to premium class passengers and non-hub carriers can benefit from the “umbrella effects” of hub premiums. However, hub carriers are not able to translate their airport dominance to pricing power in the economy class market, whereas non-hub carriers even have to reduce the prices as their market shares at major airports increase. This study contributes to the literature by explicitly segmenting the market into economy and premium classes. The results have important policy implications.
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    The assessment of the relationship between information technology (IT) and airport performance
    (Cranfield University, 2016-12) Kaduoka, Carlos Yoshihiro; Pagliari, Romano; Lei, Zheng
    The evolution of the airport business is demonstrated by airports that are adopting new business strategies and commercial models, which allow them to be, for example, service providers instead of real-estate managers, with the focus on cost reduction and increasing non-aeronautical (commercial) revenues. Information technology (IT) can be used by airports to achieve their business goals, such as enhancing performance by delivering cost reductions and generating additional revenue streams. Airports operate in an increasingly competitive and dynamic market, with the aim of attracting a larger share of hub traffic from neighbouring airports. Therefore, financial and operational performance will be key elements for airlines when choosing a new airport destination. The research shows that airports are more focused on passenger satisfaction, resulting in airport performance indicators that have the passenger at its operational core and performance targets (e.g. Airport Service Quality passenger satisfaction survey). IT plays an important role in increasing airport performance through the automation of processes such as the deployment of common-use check-in desks and self-service check-in kiosks. Studies of other industries have shown evidence that IT impacts firm performance, but there have been few studies related to the airport industry. Thus, the aim of this research is to assess the relationship between IT and airport performance, and it proposes a conceptual framework to assess the relationship between IT and airport performance by drawing from studies in other industries. Two methodologies were used in this research, the first one was the case study, and the second one was the online survey. The case studies consisted of 16 faceto- face interviews with senior staff representing two airports in Asia, one airport in Australia, and one airport in Europe. The case studies result show that there is a relationship between IT and airport performance ... [cont.].
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    How the consumer confidence index could increase air travel demand forecast accuracy?
    (Cranfield University, 2012-09) Teyssier, Narjesse; Alamdari, Fariba; Morrell, Peter; Lei, Zheng
    Because of the complex nature of the air transportation industry with continuous changes in the environment, the past records of air traffic forecasters, either using trend extrapolation or causal models or even more sophisticated methods have not produced accurate results. In recent years, the trend has been to develop air travel demand forecasts based on econometric equations, which specify a relationship between passenger traffic and a number of traditional key economic variables. However these forecasts do not take into account air traffic downturns or strong increases. Periods of economic or political uncertainty are associated with consumer confidence volatility, suggesting that swings in confidence could influence air travel demand. The failure of forecasters to predict the repeated peaks and troughs since 2001 has renewed interest in supplementing econometric forecasts with qualitative indicators such as consumer confidence indices. These variables are available for some countries and the aim of this research is to find whether forecasts based on these indices are more accurate in predicting short-term traffic up and downs. Through the analysis of three case studies, this thesis examines how the introduction of a confidence index in the air travel demand model, including only macroeconomic variables, could have some ability to improve the forecast accuracy of the model. For each case study, the demand for the market has been divided according to the existing supply side segments, namely legacy carriers, low cost carriers and non-scheduled airlines. The results show that this confidence index has some ability to improve the forecast accuracy of both, the global top-down and the bottom-up models built for some supply side segments, notably the legacy ones during periods of uncertainty such as 1991, 2001, 2008 and 2009. The results are also suggesting that the forecasting power of this index is increasing when applied to more mature markets such as the demand linked to the US legacy carriers or to the European charter airlines.This study is appraising the performance of consumer confidence indexes by examining their impact on different air travel demand forecasts.
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    Pre-tactical trajectory compatibility determination to reduce air traffic controllers' tactical workload
    (Cranfield University, 2012-03) Portillo, Yolanda; Fewings, Rodney; Lei, Zheng
    The current Air Traffic Management (ATM) system, based on principles established more than 50 years ago, is starting to show clear signs of saturation. This fact. joined to increasingly environmental awareness, leads to a paradigm shift from the current sector-based ATM system, to a future trajectory-based ATM system. Within this research, factors and processes affecting trajectory-based operations are analysed, and the main factors hindering an accurate trajectory definition identified, in order to establish the criteria under which two aircraft trajectories could be declared as compatible in a pre-tactical management stage. Trajectory compatibility determination will endeavour to reduce the real-time Air Traffic Controller‟s (ATCO‟s) workload in the tactical stage, currently identified as one of the main bottlenecks in the existing ATM system. The obtained results are based on a trade-off between the system capacity, understood as the number of ATCO tactical interventions, versus the system predictability, as the number of misdetections or probability of conflict to be assumed in a pre-tactical timeframe. A criterion to identify when two trajectories are compatible is presented, firstly considering the movement as horizontal only, then including the vertical components when one or both aircraft are climbing or descending. The research initial results were presented in a Paper in the first SESAR Innovation Days which took place at Toulouse from the 29th of November 2011 to the 1st of December 2011 (Paper included as Annex V).
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    The transformation of a legacy carrier: a case study of Turkish Airlines
    (Elsevier, 2014-07-14) Dursun, Mehmet Erkan; O'Connell, John F.; Lei, Zheng; Warnock-Smith, David
    This study examines the metronomic rise of Turkish Airlines into a global carrier in the period following domestic deregulation and part privatisation. Using a comparative assessment of the carrier's network and its competitive strategies during the 2003–2013/2014 period it was found that Turkish Airlines now benefits from considerable network, cost, service and brand advantages over competing European and to a lesser extent Middle-Eastern airlines. Its network operation based in Istanbul Ataturk airport enjoys strong geographic and demographic advantages, which enables it to optimise the use of its large and young short-haul fleet between a significant number of domestic and international points. This study has important implications for partially or fully state owned legacy carriers as to how to gain competitive advantages in an increasingly open and liberal airline industry.