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Effects of cargo types and load efficiency on airline cargo revenues

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  • Chao, Ching-Cheng
  • Li, Ru-Guo

Abstract

Numerous factors affect air cargo revenue management. Air cargo companies base their cargo charges on whichever is the greater of gross weight or volumetric weight. We developed a cargo consolidation model based on air cargo characteristics, and investigated the effect of cargo density, the Density Ratio of Heavy cargo to Light cargo (DRHL), and the percentage of small cargo on the chargeable weights and revenues of airlines. The empirical results show that a higher DRHL indicates greater chargeable weight, and that as the DRHL climbs to a certain level, the extent of chargeable cargo weights tends to stabilize gradually. The closer the cargo density approaches the most suitable loading density for a flight, the greater the chargeable weight is. A higher proportion of small cargo loaded on an aircraft means higher airline revenue. Our results can effectively combine types of air cargo to increase loading rates and revenues for airlines.

Suggested Citation

  • Chao, Ching-Cheng & Li, Ru-Guo, 2017. "Effects of cargo types and load efficiency on airline cargo revenues," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 26-33.
    • Handle: RePEc:eee:jaitra:v:61:y:2017:i:c:p:26-33
    DOI: 10.1016/j.jairtraman.2015.11.006
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    2. Bierwirth, Benjamin & Schocke, Kai-Oliver, 2017. "Lead-time optimization potential of digitization in air cargo," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Kersten, Wolfgang & Blecker, Thorsten & Ringle, Christian M. (ed.), Digitalization in Supply Chain Management and Logistics: Smart and Digital Solutions for an Industry 4.0 Environment. Proceedings of the Hamburg Inter, volume 23, pages 75-98, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
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