DOCSLIB.ORG

The Impact of Safety on Fleet Acquisition and Management in U.S Commercial Airlines

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Impact of Safety on Fleet Acquisition and Management in U.S Commercial Airlines University of North Dakota UND Scholarly Commons Theses and Dissertations Theses, Dissertations, and Senior Projects January 2020 The Impact Of Safety On Fleet Acquisition And Management In U.S Commercial Airlines Dinusha Sammani Gunarathna Follow this and additional works at: https://commons.und.edu/theses Recommended Citation Gunarathna, Dinusha Sammani, "The Impact Of Safety On Fleet Acquisition And Management In U.S Commercial Airlines" (2020). Theses and Dissertations. 3375. https://commons.und.edu/theses/3375 This Thesis is brought to you for free and open access by the Theses, Dissertations, and Senior Projects at UND Scholarly Commons. It has been accepted for inclusion in Theses and Dissertations by an authorized administrator of UND Scholarly Commons. For more information, please contact [email protected]. THE IMPACT OF SAFETY ON FLEET ACQUISITION AND MANAGEMENT IN U.S COMMERCIAL AIRLINES by Dinusha Sammani Gunarathna Bachelor of Business Administration, University of North Dakota, 2018 A Thesis Submitted to the Graduate Faculty of the University of North Dakota in partial fulfillment of the requirements for the degree of Master of Science Grand Forks, North Dakota December 2020 Copyright 2020 Dinusha Sammani Gunarathna ii DocuSign Envelope ID: 16AFDF73-6F93-41A7-B0F5-AE90ED604950 Dinusha Sammani Gunarathna Adikari Mudiyanselage Name: Degree: Master of Science This document, submitted in partial fulfillment of the requirements for the degree from the University of North Dakota, has been read by the Faculty Advisory Committee under whom the work has been done and is hereby approved. ____________________________________ Daniel Kwasi Adjekum, Ph.D., Chair ____________________________________ Gary Ullrich, M.S. ____________________________________ Brandon Wild, Ph.D. ____________________________________ ____________________________________ ____________________________________ This document is being submitted by the appointed advisory committee as having met all the requirements of the School of Graduate Studies at the University of North Dakota and is hereby approved. ____________________________________ Chris Nelson Dean of the School of Graduate Studies 12/4/2020____________________________________ Date iii PERMISSION Title The impact of Safety on Fleet Acquisition and Management in U.S Commercial Airlines Department Aviation Degree Master of Science In presenting this thesis in partial fulfillment of the requirements for a graduate degree from the University of North Dakota, I agree that the library of this University shall make it freely available for inspection. I further agree that permission for extensive copying for scholarly purposes may be granted by the professor who supervised my thesis work or, in his absence, by the chairperson of the department or the dean of the School of Graduate Studies. It is understood that any copying or publication or other use of this thesis or part thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and the University of North Dakota in any scholarly use which may be made of any material in my thesis. Dinusha Sammani Gunarathna December 4th , 2020 iv TABLE OF CONTENTS LIST OF FIGURES ......................................................................................................... viii LIST OF TABLES ............................................................................................................. ix ACKNOWLEDGEMENTS ................................................................................................ x ABSTRACT ....................................................................................................................... xi CHAPTER I ........................................................................................................................ 1 Introduction ..................................................................................................................... 1 Statement of the Problem ................................................................................................ 8 Purpose of the Study ..................................................................................................... 14 Research Questions ....................................................................................................... 15 CHAPTER II ..................................................................................................................... 17 Literature Review .......................................................................................................... 17 Airline Planning ......................................................................................................... 17 Fleet Selection ........................................................................................................... 20 Fleet Planning Models ............................................................................................... 23 McDonnell Douglas DC-10 Case Study .................................................................... 33 Aerei da Transporto Regionale ATR- 42/72 Case Study .......................................... 38 Boeing B787 Dreamliner Case Study ........................................................................ 44 Airbus A320neo Case Study...................................................................................... 46 Boeing B737 MAX Case Study ................................................................................. 48 v CHAPTER III ................................................................................................................... 53 Methodology ................................................................................................................. 53 Data Collection .......................................................................................................... 54 Ethical Considerations ............................................................................................... 55 Participant Recruitment Process ................................................................................ 56 Participants ................................................................................................................ 56 Data Analysis ............................................................................................................. 58 CHAPTER IV ................................................................................................................... 59 Findings ......................................................................................................................... 59 CHAPTER V .................................................................................................................... 87 Discussion ..................................................................................................................... 87 Research Question 1 .................................................................................................. 89 Research Question 2 .................................................................................................. 90 Research Question 3 .................................................................................................. 91 Research Question 4 .................................................................................................. 92 Research Question 5 .................................................................................................. 92 Research Question 6 .................................................................................................. 93 Research Question 7 .................................................................................................. 93 Implications ................................................................................................................... 94 Limitations .................................................................................................................... 95 vi Conclusion ..................................................................................................................... 96 APPENDIX A ................................................................................................................... 99 APPENDIX B ................................................................................................................. 101 APPENDIX C ................................................................................................................. 102 APPENDIX D ................................................................................................................. 107 APPENDIX E ................................................................................................................. 108 REFERENCES ............................................................................................................... 118 vii LIST OF FIGURES Figure Page Figure 1 Global Passenger Traffic (RPK) & Global GDP (IATA, 2019) .......................... 1 Figure 2 Return to Growth Post- COVID-19 (IATA, 2020) .............................................. 4 Figure 3 The Evaluating Hierarchy System for Airline Image (Liou & Chuang, 2009) .... 6 Figure 4 Statistical Analysis of Importance of Airline Choice Factors by Passengers (Chen & Chao, 2015) .......................................................................................................... 7 Figure 5 Hierarchy of Airline Planning Process
Load more

Recommended publications
  • 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]
  • Fleet Standardisation and Airline Performance
    Journal of Transport Economics and Policy, Volume 49, Part 1, January 2015, pp. 149–166 Fleet Standardisation and Airline Performance Li Zou, Chunyan Yu, and Martin Dresner Address for correspondence: Li Zou, College of Business, Embry-Riddle Aeronautical University, 600 S. Clyde Morris Blvd., Daytona Beach, FL 32114 ([email protected]). Chunyan Yu is also at the College of Business, Embry-Riddle Aeronautical University. Martin Dresner is at the Robert H. Smith School of Business, University of Maryland, College Park, MD 20742. Abstract We develop three fleet standardisation measurements to estimate their impacts on airline costs and profitability. Using panel data for a group of US airlines from 1999 to 2009, we find that fleet standardisation, as expected, leads to lower unit costs. However, after controlling for its cost- reducing effects, fleet standardisation is negatively related to profit margin. Our findings provide quantitative evidence of the trade-off between the costs and benefits from fleet commonality. Although airlines can benefit from cost savings in flight operations and maintenance with a more standardised fleet, the potential negative revenue impacts from fleet standardisation have generally been overlooked. Date of final version: January 2014 149 Journal of Transport Economics and Policy Volume 49, Part 1 1.0 Introduction Flight operations and maintenance normally account for nearly 50 per cent of passenger airlines’ operating expenses in the USA. It has been widely claimed that a more diverse fleet may result in higher costs associated with pilot training, scheduling, ground handling, maintenance, and the lack of simplicity in operations, while a standardised fleet could reduce both flight operations expenses and maintenance costs (West and Bradley, 2008).
    [Show full text]
  • Airline Fleet Composition: Analysis and Planning
    Joana Filipa Silva Fernandes Carreira AIRLINE FLEET COMPOSITION: ANALYSIS AND PLANNING PhD Thesis in Doctoral Program in Transport Systems supervised by Professor António Pais Antunes and Professor Morton O’Kelly, presented to the Department of Civil Engineering of the Faculty of Sciences and Technology of the University of Coimbra December 2017 Joana Filipa Silva Fernandes Carreira AIRLINE FLEET COMPOSITION: ANALYSIS AND PLANNING PhD Thesis in Doctoral Program in Transport Systems supervised by Professor António Pais Antunes and Professor Morton O’Kelly, presented to the Department of Civil Engineering of the Faculty of Sciences and Technology of the University of Coimbra December 2017 [Page Intentionally Left Blank] FINANCIAL SUPPORT This research work was conducted under the MIT-Portugal Program and financed by “Fundação para a Ciência e a Tecnologia” (FCT, Portugal) through the PhD scholarship with the following reference: SFRH / BD / 51937 / 2012. [Page Intentionally Left Blank] Airline Fleet Composition: Analysis and Planning ACKNOWLEDGMENTS ACKNOWLEDGMENTS Firstly, I want to sincerely thank Professor António Pais Antunes for all the guidance, availability and support. I am grateful for the knowledge you shared with me and I profoundly thank you for all the help and encouragement you gave me, so I could pursue and accomplish my goals. Thank you for your key role in the development of this work, I could not have done it without you. I would also like to thank Professor Morton O’Kelly for the support and supervision. Your help and assistance were fundamental and contributed greatly for the achievement and conclusion of this work. My deepest gratitude goes to Professor Guglielmo Lulli for the essential contributions and guidance provided during the development of this research.
    [Show full text]
  • GE Aviation Scott C
    GE Aviation Scott C. Donnelly February 15, 2006 "This document contains "forward-looking statements" – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties arise from the behavior of financial markets, including fluctuations in interest rates and commodity prices; from future integration of acquired businesses; from future financial performance of major industries which we serve including, without limitation, the air and rail transportation, energy generation and healthcare industries; from unanticipated loss development in our insurance businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements." This presentation includes certain non-GAAP measures as defined by SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in our Supplemental Information file on our investor relations
    [Show full text]
  • Crossover Jets Market Report May 2021 Angus Von Schoenberg Crossover Jet Foreword
    Crossover Jets Market Report May 2021 Angus von Schoenberg Crossover Jet Foreword The entire value chain in the global aviation industry has been hit by a devastating crisis since 2020. However, not all segments of the industry are affected equally. The following report aims to decipher the current market dynamics in one part of the industry that has so far suffered less than others and is expected to lead its recovery. From a passenger demand perspective, this is domestic and regional short-haul travel. According to Kroll Bond Rating Agency (KBRA) “The global regional market is poised to be a leader in the overall aviation market recovery as international travel remains restricted and passengers may be more comfortable with shorter-duration regional flights before long-haul flights, especially in light of vaccine rollouts which should support domestic and regional safety concerns more immediately.” Many industry experts and observers believe that pent-up demand for leisure and visiting friends and relatives will drive this recovery with business travel lagging behind. However, previous, albeit less severe, crises have almost always predicted a decline in business travel, a concern which persistently proved to be unfounded on every occasion. The equipment serving this demand is met by a combination of narrowbody and regional aircraft. This report covers aircraft in the 100-150 seat category, primarily the new generation Airbus A220 and its Embraer E2 competitor that are increasingly referred to as Crossover Jets, along with current generation E1s. These represent a substantial portion of TrueNoord’s target market, and those of other lessors that focus on regional aircraft.
    [Show full text]
  • Section 7: Labor Cost Factors
    7. LABOR COST FACTORS 7.1 INTRODUCTION Many changes to FAA investment or regulatory programs require the expenditure of labor hours to construct, manufacture, modify, operate or service aviation facilities or equipment. In addition, regulations can require additional education or training of personnel. While many of these costs are embedded in other cost factors (e.g., flight crew costs are typically included in aircraft operating costs), there may be a need to separately place a value on labor hours expended. This section of the report summarizes data on labor costs for typical aviation industry employees. It also suggests ways of including these and related costs in benefit-cost analyses. There are many types of labor that could be affected by FAA investments or regulations, and labor rates for even the same occupation can vary widely by industry segment, years of experience, and geographic location, among other factors. Labor costs can be stated in a variety of ways, including the direct salary or wage cost of a unit of labor (annual or hourly), the direct cost plus the cost of benefits, or the “fully loaded” cost, which includes the enterprise’s overhead costs that are allocated to labor as well as the direct costs and the cost of benefits. Which cost should be used depends on the regulatory impact of interest; in particular, whether the impact would include the hiring of additional staff or capital investments along with labor impacts. Impacts that are modest in terms of additional labor hour requirements can be best estimated using direct labor costs alone. An impact that includes the hiring of some new workers arguably should include fringe benefits1 costs as well, and an impact that involves significant expansion of operations and equipment along with employment should also include overhead costs in the labor rates used.
    [Show full text]
  • An Overview of Commercial Aircraft 2018 - 2019
    An Overview of Commercial Aircraft 2018 - 2019 DVB Bank SE Aviation Research (AR) An Overview of For Each Aircraft Type: - Type Description Commercial Aircraft - Performance Data - World Fleet Data - Engine Split 2018 - 2019 For Each Aircraft Category: - Payload-Range Diagrams Authors: Albert Muntane Casanova Bert van Leeuwen Coen Capelle Simon Finn Steven Guo Disclaimer: This booklet dated December 2017 has been prepared by DVB Bank SE’s (‘DVB’) Aviation Research department (‘AR’) for general information purposes. Although DVB has checked the information contained in this guide carefully, DVB does not warrant that the information in this guide is complete, correct or up-to-date. Nothing contained in this booklet should be regarded as any kind of advice relating to the suitability or otherwise of the subject matter for any particular purpose. Except to the extent that liability under any applicable law or regulation cannot be excluded, neither DVB, nor AR or any other member of DVB is liable for loss or damage of any kind arising as a result of any opinion or information expressly published or implied in this report notwithstanding negligence, default or lack of care by DVB or that such loss or damage was foreseeable. Neither DVB nor AR or any member of DVB accepts liability in any way (including by reason of negligence) for errors in, or omissions from, the information in this guide. The content of this report is proprietary and cannot be used, copied, reproduced, disseminated and/or distributed to other parties without AR’s prior written consent. The pictures in this booklet were provided by Bert van Leeuwen, Coen Capelle or the OEMs.
    [Show full text]