DOCSLIB.ORG

Airline Fleet Planning and Utilization Hours Comparison Studies Daniel Zhou Iowa State University

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Airline Fleet Planning and Utilization Hours Comparison Studies Daniel Zhou Iowa State University Iowa State University Capstones, Theses and Graduate Theses and Dissertations Dissertations 2019 Airline fleet planning and utilization hours comparison studies Daniel Zhou Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/etd Part of the Aerospace Engineering Commons Recommended Citation Zhou, Daniel, "Airline fleet planning and utilization hours comparison studies" (2019). Graduate Theses and Dissertations. 17131. https://lib.dr.iastate.edu/etd/17131 This Thesis is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Graduate Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. Airline fleet planning and utilization hours comparison studies by Daniel Xiaoyang Zhou A thesis submitted to the graduate faculty in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Major: Aerospace Engineering Program of Study Committee: Peng Wei, Major Professor Leifur T. Leifsson Lizhi Wang The student author, whose presentation of the scholarship herein was approved by the program of study committee, is solely responsible for the content of this thesis. The Graduate College will ensure this thesis is globally accessible and will not permit alterations after a degree is conferred. Iowa State University Ames, Iowa 2019 Copyright c Daniel Xiaoyang Zhou, 2019. All rights reserved. ii DEDICATION I would like to dedicate this thesis to my Mum and Dad without whose support I would not have been able to complete this work. I would also like to thank my friends and family for their loving guidance and financial assistance during the writing of this work. iii TABLE OF CONTENTS Page LIST OF TABLES . .v LIST OF FIGURES . vi ACKNOWLEDGMENTS . ix NOMENCLATURE . .x ABSTRACT . xii CHAPTER 1. OVERVIEW . .1 1.1 Introduction . .1 CHAPTER 2. PROBLEM STATEMENT . .5 CHAPTER 3. AIRPLANE UTILIZATION AND TREND STUDY . .6 3.1 Method . .6 3.2 Results . 11 3.2.1 Utilization Hour Comparison of Tail Numbers . 11 3.2.2 Average Utilization Hour Comparison Between Legacy Carriers and Low- Cost Carriers . 18 CHAPTER 4. AIRPLANE UTILIZATION PREDICTION VIA MACHINE LEARNING MODELS . 22 4.1 Method . 22 4.1.1 K-Fold Cross-Validation . 24 4.1.2 Preliminary Results . 25 4.1.3 Random Forest Model . 27 4.1.4 Support Vector Regression Model . 28 iv 4.1.5 Neural Network Model . 30 4.1.6 Boosting Models . 32 4.2 Results . 34 4.2.1 Random Forest Algorithm Prediction Results . 35 4.2.2 Support Vector Regression Algorithm Prediction Results . 38 4.2.3 Neural Network Prediction Results . 45 4.2.4 Boosting Algorithms Prediction Results . 51 4.2.5 Summary of Machine Learning Model Predictions . 58 CHAPTER 5. CONCLUSION AND FUTURE WORK . 60 BIBLIOGRAPHY . 62 v LIST OF TABLES Page Table 3.1 A Summary of AOTP Database Fields . .6 Table 4.1 Machine Learning Model Predictions . 58 vi LIST OF FIGURES Page Figure 3.1 Erroneous Data in Raw Data Example I . .8 Figure 3.2 Erroneous Data in Raw Data Example II . .8 Figure 3.3 Time Zone Problem in Raw Data Example . .9 Figure 3.4 American Airlines A319 Single Tail Number Comparison 2014 . 11 Figure 3.5 American Airlines A319 Single Tail Number Comparison 2017 . 12 Figure 3.6 Frontier Airlines A319 Single Tail Number Comparison 2014 . 12 Figure 3.7 Frontier Airlines A319 Single Tail Number Comparison 2017 . 13 Figure 3.8 American Airlines B737 Single Tail Number Comparison 2014 . 14 Figure 3.9 American Airlines B737 Single Tail Number Comparison 2017 . 15 Figure 3.10 Southwest Airlines B737 Single Tail Number Comparison 2014 . 15 Figure 3.11 Southwest Airlines B737 Single Tail Number Comparison 2017 . 16 Figure 3.12 A319 American Airlines vs Frontier Airlines 2014 . 18 Figure 3.13 A319 American Airlines vs Frontier Airlines 2017 . 19 Figure 3.14 B737 American Airlines vs Southwest Airlines 2014 . 19 Figure 3.15 B737 American Airlines vs Southwest Airlines 2017 . 20 Figure 4.1 Pycharm Library Menu . 23 Figure 4.2 Pycharm Console . 23 Figure 4.3 Hyperplane On Linearly Separable Data . 29 Figure 4.4 A Neural Network . 30 Figure 4.5 Gradient Boosting Error Fitting . 33 Figure 4.6 Number of Estimators Vs. Max Features . 35 Figure 4.7 Number of Estimators Vs. Minimum Samples at Terminal Node . 35 vii Figure 4.8 Max Features Vs. Minimum Samples at Terminal Node . 36 Figure 4.9 Preliminary Results Vs. Final Results . 36 Figure 4.10 Prediction Results Vs. Baseline Results . 37 Figure 4.11 Cost Vs. Epsilon Linear Kernel . 38 Figure 4.12 Cost Vs. Epsilon Linear Kernel Normalized . 38 Figure 4.13 Cost Vs. Epsilon RBF Kernel . 39 Figure 4.14 Cost Vs. Epsilon RBF Kernel Normalized . 39 Figure 4.15 Cost Vs. Gamma RBF Kernel . 40 Figure 4.16 Cost Vs. Gamma RBF Kernel Normalized . 40 Figure 4.17 Gamma Vs. Epsilon RBF Kernel . 41 Figure 4.18 Gamma Vs. Epsilon RBF Kernel Normalized . 41 Figure 4.19 Preliminary Results Vs. Final Results Linear Kernal . 42 Figure 4.20 Preliminary Results Vs. Final Results RBF Kernal . 42 Figure 4.21 Prediction Results Vs. Baseline Results Linear Kernel . 43 Figure 4.22 Prediction Results Vs. Baseline Results RBF Kernel . 43 Figure 4.23 SGD Optimizer . 45 Figure 4.24 RMSProp Optimizer . 46 Figure 4.25 Adagrad Optimizer . 46 Figure 4.26 Adadelta Optimizer . 47 Figure 4.27 Adam Optimizer . 47 Figure 4.28 Adamax Optimizer . 48 Figure 4.29 Nadam Optimizer . 48 Figure 4.30 Preliminary Results Vs. Final Results Adam Optimizer . 49 Figure 4.31 Prediction Results Vs. Baseline Results Adam Optimizer . 49 Figure 4.32 Number of Estimators Vs. Learning Rate Adaptive Boosting . 51 Figure 4.33 Number of Estimators Vs. Max Depth Gradient Boosting . 51 Figure 4.34 Number of Estimators Vs. Learning Rate Gradient Boosting . 52 viii Figure 4.35 Max Depth Vs. Learning Rate Gradient Boosting . 52 Figure 4.36 Number of Estimators Vs. Learning Rate XGBoosting . 53 Figure 4.37 Max Depth Vs. Learning Rate XGBoosting . 53 Figure 4.38 Number of Estimators Vs. Max Depth XGBoosting . 54 Figure 4.39 Preliminary Results Vs. Final Results Adaptive Boosting . 54 Figure 4.40 Preliminary Results Vs. Final Results Gradient Boosting . 55 Figure 4.41 Preliminary Results Vs. Final Results XGBoost . 55 Figure 4.42 Prediction Results Vs. Baseline Results Adaptive Boosting . 56 Figure 4.43 Prediction Results Vs. Baseline Results Gradient Boosting . 56 Figure 4.44 Prediction Results Vs. Baseline Results XGBoost . 57 ix ACKNOWLEDGMENTS I would like to take this opportunity to express my thanks to those who helped me with various aspects of conducting research and the writing of this thesis. First and foremost, Dr. Peng Wei for his guidance, patience and support throughout this research and the writing of this thesis. His insights and words of encouragement have often inspired me and renewed my hopes for completing my graduate education. I would also like to thank my committee members for their efforts and contributions to this work: Dr. Leifur Leiffson and Dr. Lizhi Wang. I would additionally like to thank everyone in the Intelligent Air Systems Lab for their support, for which has guided me through research. Last, but certainly not least, I would like to thank those nearest and dearest to me, my friends and family, for their endless support during a strenuous time in my life. These people include my parents, Joe and Sharon, my sister, Ruby, and my friends Anshul, Xuxi, Xiaosong, George and Nicole, in no particular order whatsoever. x NOMENCLATURE Symbols EΘ = Expectation w.r.t Θn Θn = Random Parameter Xn = Dataset Features Dn = Dataset w = Gradient of Separating Hyperplane " = Margin of Tolerance W2 = Cumulative Weights of Upstream Nodes b2 = Bias of Downstream Node xi Abbreviations LCC = Low-Cost Carrier FAA = Federal Aviation Administration NTSB = National Transportation Safety Board RUL = Remaining Useful Life MSA = Metropolitan Statistical Area RMSE = Root Mean Squared Error BTS = Bureau of Transportation Statistics AOTP = Airline On-Time Performance PDT = Pacific Daylight Time MST = Mountain Standard Time PT = Pacific Time GBA = Gradient Boosting Algorithm IDE = Independent Development Environment XGBoost = Extreme Gradient Boost RBF = Radial Basis Function CPU = Central Processing Unit NAG = Nesterov accelerated gradient xii ABSTRACT After the latest mechanical malfunction accidents involving Allegiant [1] and Southwest Air- lines [2], a special interest was taken to investigate whether low-cost carriers (LCC) are taking an overly aggressive stance in regards to the utilization of aircraft within their respective fleets. Based on summary reports obtained from incident logs generated by the FAA (Federal Aviation Administration) and NTSB (National Transportation Safety Board), it was observed that Allegiant Airlines was almost three and a half times as likely to encounter a mid-air breakdown as legacy carriers are. On the economic front, the fallout that Southwest Airlines has faced from the Flight 1380 incident after an engine fan blade sheared may very likely have been a potential factor that led to an immediate decline in ticket reservations. From a cost savings perspective, figures from a forecast analysis conducted by ICF International in 2015 predict a 40 percent increase in total fleet size across all airlines combined in the world between the years 2015 and 2025 [3]. With a global fleet size approaching 40,000 aircraft by the year 2025, the use of historical utilization data could play a key factor towards profit maximization in strategic forecasting for airline maintenance and fleet planning through the study and imple- mentation of past trends; historical data could assist airlines with making more informed decisions on fleet planning and maintenance scheduling, by taking into consideration past patterns as well as seasonality effects in the planning process.
Load more

Recommended publications
  • WORLD AVIATION Yearbook 2013 EUROPE
    WORLD AVIATION Yearbook 2013 EUROPE 1 PROFILES W ESTERN EUROPE TOP 10 AIRLINES SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 R ANKING CARRIER NAME SEATS Lufthansa 1 Lufthansa 1,739,886 Ryanair 2 Ryanair 1,604,799 Air France 3 Air France 1,329,819 easyJet Britis 4 easyJet 1,200,528 Airways 5 British Airways 1,025,222 SAS 6 SAS 703,817 airberlin KLM Royal 7 airberlin 609,008 Dutch Airlines 8 KLM Royal Dutch Airlines 571,584 Iberia 9 Iberia 534,125 Other Western 10 Norwegian Air Shuttle 494,828 W ESTERN EUROPE TOP 10 AIRPORTS SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 Europe R ANKING CARRIER NAME SEATS 1 London Heathrow Airport 1,774,606 2 Paris Charles De Gaulle Airport 1,421,231 Outlook 3 Frankfurt Airport 1,394,143 4 Amsterdam Airport Schiphol 1,052,624 5 Madrid Barajas Airport 1,016,791 HE EUROPEAN AIRLINE MARKET 6 Munich Airport 1,007,000 HAS A NUMBER OF DIVIDING LINES. 7 Rome Fiumicino Airport 812,178 There is little growth on routes within the 8 Barcelona El Prat Airport 768,004 continent, but steady growth on long-haul. MostT of the growth within Europe goes to low-cost 9 Paris Orly Field 683,097 carriers, while the major legacy groups restructure 10 London Gatwick Airport 622,909 their short/medium-haul activities. The big Western countries see little or negative traffic growth, while the East enjoys a growth spurt ... ... On the other hand, the big Western airline groups continue to lead consolidation, while many in the East struggle to survive.
    [Show full text]
  • Domestic Airline Competition, Legacy Carrier Consolidation and the Rise of the Low-Cost Carrier
    DOMESTIC AIRLINE COMPETITION, LEGACY CARRIER CONSOLIDATION AND THE RISE OF THE LOW-COST CARRIER A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Master of Public Policy in Public Policy By Christian T. Ueland, B.S. Washington, DC April 13, 2017 Copyright 2017 by Christian T. Ueland All Rights Reserved ii The research and writing of this thesis is dedicated to my family and friends. Many thanks, Christian Ueland iii DOMESTIC AIRLINE COMPETITION, LEGACY CARRIER CONSOLIDATION AND THE RISE OF THE LOW-COST CARRIER Christian T. Ueland, B.S. Thesis Advisor: Terry Kennedy, Ph.D. ABSTRACT In the past eight years, the airline market in the United States has gone through a string of bankruptcies, some brought on by the severe economic recession in 2008 and 2009. These financial difficulties provided the impetus for four giant airline mergers, causing concern that market concentration had exceeded a healthy limit. This paper examines the competitive landscape of domestic air travel through an analysis of the relationship between airline fares and different levels of competition in the domestic airline market. Taking US Department of Transportation data from 2008 and 2016, I use an ordinary least squares (OLS) regression model to determine the relationship between average market fares and the type/number of competing airlines in each airport-pair market. The results for each year represent the strength of competitive forces, which I then compare to determine the manner in which competition has changed over the eight-year period.
    [Show full text]
  • Save a Turbine Engine: Serve It Water
    Clare Leavens Award Joe Chase Award Aviall High Achievement Award Transport Canada Approved for R/T Save a turbine engine: serve it water Minimum equipment lists and dispatch deviation guides PAMA and AME news February -March 2015 Volume 13/Issue 5 Publication Mail Agreement No. 0041039024 and Return Undeliverable Canadian Addresses to Alpha Publishing Group (2004) Inc. Unit 7, 11771 Horseshoe Way, Richmond, BC, V7A 4V4 email: [email protected] $7.95 AMU-OFC-IFC.indd 1 1/29/15 7:28 PM AMU-OFC-IFC.indd 2 1/29/15 7:28 PM In perspective: Departments the P&WC PT6 nd here some of you thought Gran- 4 Upcoming Events dad put a lot of miles and years on his good ol’ Harley Flathead 45. Hah! 6 STCs & New Products AThat was nothing. Pratt & Whitney Canada 8 Industry Forum recently tweeted out that its venerable PT6 turbine has now clocked 400 million hours 20 AME Association of flight operation. and PAMA News Four hundred million! What does that 39 Classified even mean? Let’s calculate (roughly): There are 8,760 hours in any 365-day year. Di- 42 AMU Chronicles vide 400 million by 8,760 and you get By Sam Longo 45,662.100456621. Round that number off — without fac- toring in Leap, Aztec or dog years (this is al- Features ready getting too complicated for my lousy math)—and you’re now standing at 46,000 10 subscribe and download at www.amumagazine.com AMU is viewable online: years of service. Did I just do that right? As- Save a Turbine Engine: Serve it Water 10 suming I did (and that’s a big ask, I know) By Mike Broderick then we can break down that history into bite-sized pieces.
    [Show full text]
  • 1995 Annual Report
    Southwest Airlines Co. 1995 Annual Report OUR 6 SECRETS OF SUCCESS Table of Contents Consolidated Highlights ..................................................................2 Introduction .....................................................................................3 Letter to Shareholders.....................................................................4 1. Stick To What You’re Good At ....................................................4 2. Keep It Simple .............................................................................8 3. Keep Fares Low, Costs Lower ..................................................10 4. Treat Customers Like Guests....................................................12 5. Never Stand Still .......................................................................14 6. Hire Great People .....................................................................16 Looking Ahead ..............................................................................18 Destinations ..................................................................................20 Financial Review ...........................................................................21 Management’s Discussion and Analysis .......................................21 Consolidated Financial Statements...............................................27 Report of Independent Auditors ....................................................39 Quarterly Financial Data ...............................................................40 Common Stock Price Ranges
    [Show full text]
  • ESTIMATING AIRLINE OPERATING COSTS Dal V. Maddalon NASA
    -----------------_._---_.- ... _..... _... _.. _ ..... _- ...... - ...... -- ..... __ ... _- ESTIMATING AIRLINE OPERATING COSTS Dal V. Maddalon NASA Langley Research Center SUMMARY A review has been made of the factors affecting commercial aircraft operating and delay costs. From this work, an airline operating cost model was developed which includes a method for estimating the labor and material costs of individual airframe maintenance systems. The model, similar in some respects to the standard Air Transport Association of America (ATA) Direct Operating Cost model, permits estimates of aircraft-related costs not now included in the standard ATA model (e.g., aircraft service, landing fees, flight attendants, and control fees). A study of the cost of aircraft delay was also made and a method for estimating the cost of certain types of airline delay is described. All costs are in 1976 dollars. INTRODUCTION In 1976, Americans spent over $17 billion to obtain air transportation services (ref. 1). Of this amount, the airlines used roughly $8 billion to purchase and operate their aircraft fleet. The introduction of aircraft which incorporate new technology to reduce these costs is fundamental to the long­ term health of the U.S. civil aviation industry. The National Aeronautics and Space Administration (NASA) has the primary governmental role in developing new civil aircraft technology and is therefore concerned with the cost of applying this technology to future airline fleets. Examples of such NASA work include studies of supercritical aerodynamics, composite materials, active controls, terminal configured vehicles, very large cargo transports, supersonic airplanes, and hydrogen-fueled aircraft. A prime means of determining the payoff from specific examples of innova­ tive research is to incorporate the technological ~dvance into a specific airplane configuration study and economically compete the advanced design against a conventional aircraft (e.g., ref.
    [Show full text]
  • Redalyc.Engineering and Strategy: Returning to the Case of Southwest
    Revista Escuela de Administración de Negocios ISSN: 0120-8160 [email protected] Universidad EAN Colombia Berrío Zapata, Cristian Engineering and strategy: returning to the case of southwest airlines, an analysis in production and technology management Revista Escuela de Administración de Negocios, núm. 73, julio-diciembre, 2012, pp. 209-217 Universidad EAN Bogóta, Colombia Available in: http://www.redalyc.org/articulo.oa?id=20625032013 How to cite Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative Casos empresariales ENGINEERING AND STRATEGY: RETURNING TO THE CASE OF SOUTHWEST AIRLINES, AN ANALYSIS IN PRODUCTION AND TECHNOLOGY MANAGEMENT Cristian Berrío Zapata 1. INTRODUCTION ome company cases let us see what was a network that makes every part of it shake, when any done to produce business model innovation component is touched. This network, immersed into Sthat creates ruptures in the market, changing the environment evolution, is a complete systemic the rules of competition. One of these cases is the unit, where paradigm changes must be supported with story of Southwest Airlines (SWA). This article tries to operational actions so innovation becomes a living demonstrate that engineering operational excellence is force that changes competing profiles. This virtuous fruitless without a compatible moving in other conceptual cycle between thought and action, when successful axes like service, finances, administration and human in producing adaptative and innovative competing resources. The areas of a company are bounded into structures, revolves the markets and generates new rules for competition.
    [Show full text]
  • Essays on Strategic Behavior in the U.S. Airline Industry
    Essays on Strategic Behavior in the U.S. Airline Industry Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Kerria Measkhan Tan, B.A., M.A. Graduate Program in Economics The Ohio State University 2012 Dissertation Committee: Matthew Lewis, Advisor James Peck Huanxing Yang c Copyright by Kerria Measkhan Tan 2012 Abstract In my first dissertation essay, \Incumbent Response to Entry by Low-Cost Carri- ers in the U.S. Airline Industry," I analyze the price response of incumbents to entry by low-cost carriers in the U.S. airline industry. Previous theoretical papers suggest that airlines might respond to entry by lowering prices to compete harder for existing customers or they might increase prices to exploit their brand-loyal customers. This paper tests which effect is more prominent in the airline industry. I find that when one of four low-cost carriers enters a particular route, legacy carrier incumbents respond differently than low-cost carrier incumbents to new low-cost carrier entry. Legacy carriers decrease their mean airfare, 10th percentile airfare, and 90th percentile air- fare before and after entry by a low-cost carrier. However, low-cost carriers do not significantly alter their pricing strategy. The differing incumbent responses can be attributed to the finding that low-cost carrier entrants tend to match the price set by rival low-cost carriers in the quarter of entry and tend to enter with a lower price than that of legacy carrier incumbents. The results also suggest that entry does not affect price dispersion by incumbent carriers.
    [Show full text]
  • Analysis of Global Airline Alliances As a Strategy for International Network Development by Antonio Tugores-García
    Analysis of Global Airline Alliances as a Strategy for International Network Development by Antonio Tugores-García M.S., Civil Engineering, Enginyer de Camins, Canals i Ports Universitat Politècnica de Catalunya, 2008 Submitted to the MIT Engineering Systems Division and the Department of Aeronautics and Astronautics in Partial Fulfillment of the Requirements for the Degrees of Master of Science in Technology and Policy and Master of Science in Aeronautics and Astronautics at the Massachusetts Institute of Technology June 2012 © 2012 Massachusetts Institute of Technology. All rights reserved Signature of Author__________________________________________________________________________________ Antonio Tugores-García Department of Engineering Systems Division Department of Aeronautics and Astronautics May 14, 2012 Certified by___________________________________________________________________________________________ Peter P. Belobaba Principal Research Scientist, Department of Aeronautics and Astronautics Thesis Supervisor Accepted by__________________________________________________________________________________________ Joel P. Clark Professor of Material Systems and Engineering Systems Acting Director, Technology and Policy Program Accepted by___________________________________________________________________________________________ Eytan H. Modiano Professor of Aeronautics and Astronautics Chair, Graduate Program Committee 1 2 Analysis of Global Airline Alliances as a Strategy for International Network Development by Antonio Tugores-García
    [Show full text]
  • 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Case No. 3:10-Cv-02858-Rs United States District Court Nort
    Case3:10-cv-02858-RS Document75 Filed08/24/10 Page1 of 46 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN FRANCISCO DIVISION 11 12 Michael C. Malaney, et al., 13 Plaintiffs, 14 CASE NO. 3:10-CV-02858-RS vs. TESTIMONY OF DANIEL RUBINFELD 15 UAL CORPORATION, UNITED AIR 16 LINES, INC., and CONTINENTAL AIRLINES, INC., 17 Defendants. 18 19 20 21 22 23 24 25 26 1025 TESTIMONY OF DANIEL RUBINFELD CASE NO. 3:10-CV-02858-RS Case3:10-cv-02858-RS Document75 Filed08/24/10 Page2 of 46 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION Michael C. Malaney, et al., Plaintiffs, CASE NO. 3:10-CV-02858-RS vs. UAL CORPORATION, UNITED AIR LINES, INC., and CONTINENTAL AIRLINES, INC., Defendants. Expert Report of Daniel Rubinfeld CONFIDENTIAL Case3:10-cv-02858-RS Document75 Filed08/24/10 Page3 of 46 I. QUALIFICATIONS ..........................................................................................................4 II. ASSIGNMENT AND SUMMARY OF OPINION ..........................................................5 III. INDUSTRY BACKGROUND ..........................................................................................7 IV. BENEFITS FROM THE MERGER ARE SUBSTANTIAL .......................................10 A. REDUCTIONS IN COSTS WILL TEND TO REDUCE NOMINAL FARES ............................. 11 1. The elimination of double marginalization will reduce nominal fares and create incentives to increase capacity and output ...........................................11 2. The merger will reduce other costs by at least $165-338 million annually .....13 B. THE MERGER WILL IMPROVE THE QUALITY OF AIRLINE SERVICE ........................... 14 3. The combination of complementary networks will improve the quality of the network and therefore the value to consumers of airline service on the combined carrier ..............................................................................................15 4.
    [Show full text]
  • Open Honors Thesis Lap Chi Adriano Chao.Pdf
    THE PENNSYLVANIA STATE UNIVERSITY SCHREYER HONORS COLLEGE DEPARTMENT OF SUPPLY CHAIN AND INFORMATION SYSTEMS AIRLINE MERGER WAVES IN THE UNITED STATES IS A MERGER BETWEEN AMERICAN AIRLINES AND US AIRWAYS POSSIBLE? LAP CHI ADRIANO CHAO Spring 2011 A thesis submitted in partial fulfillment of the requirements for baccalaureate degrees in Management and Economics with honors in Supply Chain and Information Systems Reviewed and approved* by the following: Robert Novack Associate Professor of Supply Chain and Information Systems Thesis Supervisor John Spychalski Professor Emeritus of Supply Chain and Information Systems Honors Adviser * Signatures are on file in the Schreyer Honors College. i ABSTRACT Commercial airlines are an important part of the transportation industry in the United States. A better understanding of the reasons for a series of airline merger waves in the United States can help airline professionals realize the criteria and requirements of a merger. This study examined three recent U.S. airline mergers (i.e., Delta-Northwest, United-Continental and Southwest-AirTran) and deduced eight major dimensions of merger motivations, including network synergies, antitrust immunity, fleet commonality, alliance coordination, market positioning, financial benefits and shareholders’ approval, union support and organizational learning. The feasibility of a hypothetical merger between American Airlines and US Airways was determined using the eight dimensions derived. Results suggested that the merger was unlikely to increase the competitiveness
    [Show full text]
  • Engineering by D E S I
    20400_ch00_fm1.qxd 11/25/03 12:42 PM Page i ENGINEERING BY DESIGN Second Edition GERARD VOLAND I n d i a n a U n i v e r s i t y – P u r d u e U n i v e r s i t y F o r t W a y n e Upper Saddle River, New Jersey 07458 Frontmatter1 7/12/04 9:07 AM Page ii Library of Congress Cataloging-in-Publication Data on File Vice President and Editorial Director, Production Editor: Rebecca Homiski ECS: Marcia J. Horton Director of Creative Services: Executive Editor: Eric Svendsen Paul Belfanti Associate Editor: Dee Bernhard Art Director: Jayne Conte Vice President and Director of Cover Designer: Bruce Kenselaar Production and Manufacturing, Art Editor: Greg Dulles ESM: David W. Riccardi Manufacturing Manager: Executive Managing Editor: Trudy Pisciotti Vince O’Brien Manufacturing Buyer: Lynda Castillo Managing Editor: David A. George Marketing Manager: Holly Stark © 2004 Pearson Education, Inc. Pearson Prentice Hall Pearson Education, Inc. Upper Saddle River, NJ 07458 All rights reserved. No part of this book may be reproduced in any form or by any means, without permission in writing from the publisher. Pearson Prentice Hall® is a trademark of Pearson Education, Inc. The author and publisher of this book have used their best efforts in preparing this book. These efforts include the development, research, and testing of the theories and programs to determine their effectiveness. The author and publisher make no warranty of any kind, expressed or implied, with regard to these programs or the documentation contained in this book.
    [Show full text]
  • Alliances and Antitrust Immunity: Why Domestic Airline Competition Matters
    Alliances and Antitrust Immunity: Why Domestic Airline Competition Matters By Diana L. Moss he debate over competition in the U.S. airline of some requests for ATI, it makes sense that U.S. airlines industry in recent years has focused largely on that dominate the three international alliances (Delta, Tdevelopments in domestic airline markets, rang- United, and American) would focus on highlighting alleg- ing from mergers, access to airports (e.g., slots), alleged edly competitive conditions in U.S. markets to support anticompetitive coordination on airline capacity and ancil- their requests for ATI. This article argues that such con- lary fees, and concerns over deteriorating quality of air ditions, which are not as rosy as these airlines claim, are service.1 Airline competition in international markets, precisely the reason why policy surrounding ATI is ripe however, also raises concerns and merits scrutiny. Chief for reconsideration. The article provides a brief review of among these concerns is the U.S. Department of Trans- alliance growth over the past 25 years and dominance of portation’s (DOT’s) policy of granting immunity from U.S. U.S. carriers in these alliances, examines the shift in eco- antitrust laws (ATI) for coordination on schedules and nomic evidence regarding the costs and benefits of ATI, fares by members of the three large international airline and provides empirical analysis that highlights competitive alliances: Star Alliance, oneworld, and SkyTeam. A second concerns over ATI and its implications for U.S. consumers. issue of concern is barriers to entry by foreign carriers on The article concludes with policy recommendations.
    [Show full text]