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Relevance of route and network profitability analysis for the network management process of network carriers

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  • Niehaus, Thomas
  • Ruehle, Jens
  • Knigge, Alexander

Abstract

Route profitability analysis (RPA) and network profitability analysis (NPA) represent common approaches to measure the profitability of flights in the airline industry. Scientific discussion, however, lacks an in-depth understanding of their impact on the network management process or of their implementation throughout the industry and their design. Here we analyze RPA and NPA and evaluate their potential influence on network management-related decision making. We argue that both approaches vary in applicability and suitability according to airline business models (i.e. network carriers, point-to-point carriers). Furthermore, we present the findings of a study among the top 100 network carriers worldwide on the relevance of RPA and NPA. Results indicate a wide implementation of RPA and to a lesser degree of NPA. In addition, the sophistication of the profitability analysis and the application of the retrieved profitability data for planning purposes differ considerably between airlines.

Suggested Citation

  • Niehaus, Thomas & Ruehle, Jens & Knigge, Alexander, 2009. "Relevance of route and network profitability analysis for the network management process of network carriers," Journal of Air Transport Management, Elsevier, vol. 15(4), pages 175-183.
    • Handle: RePEc:eee:jaitra:v:15:y:2009:i:4:p:175-183
    DOI: 10.1016/j.jairtraman.2008.09.011
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    References listed on IDEAS

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    1. Francis, Graham & Humphreys, Ian & Fry, Jackie, 2005. "The nature and prevalence of the use of performance measurement techniques by airlines," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 207-217.
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    Cited by:

    1. Lohmann, Gui & Vianna, Camila, 2016. "Air route suspension: The role of stakeholder engagement and aviation and non-aviation factors," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 199-210.
    2. Daft, Jost & Albers, Sascha, 2012. "A profitability analysis of low-cost long-haul flight operations," Journal of Air Transport Management, Elsevier, vol. 19(C), pages 49-54.
    3. Heinz, Stephan & O’Connell, John F., 2013. "Air transport in Africa: toward sustainable business models for African airlines," Journal of Transport Geography, Elsevier, vol. 31(C), pages 72-83.

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