Relationship of Covid-19 Pandemic on Performance and Internal Operation of The Airline
DOI:
https://doi.org/10.12695/ajtm.2021.14.3.5Keywords:
Airline, Pandemic, Performance, OperationAbstract
Abstract. Air transport business is challenged to oversee their performance and operations to preserve their business presence within the COVID-19 widespread. It is fundamental to distinguish the suitable performance and operation and their relationship with the pandemic. In this way, we used the indicators to employ a systematic literature review and experts’ point of view to select and group suitable indicators to address the literature gap. Twenty performance and internal operations indicators are identified and redefined from the review. The Delphi method’s result suggests eight indicators categorized in airline performance indicators and seven indicators categorized in internal operation indicators. We investigate the relationship of COVID-19 pandemic on the selected indicators using SmartPLS based on fifty-two weeks performance, and operation report of one of full-service airline started from 08 March 2020 until 28 February 2021. It can be deduced that the COVID-19 pandemic has a significant and negative influence on the airline’s performance. This study fills the gap by synthesizing and creating suitable and comprehensive performance and operation indicators of air transport carriers in a pandemic situation and their relationships. Finally, this study provides an invaluable point for analyzing the air transport carrier industries in a pandemic to maximize performance through profitability and load factors indicators.
Keywords: Airline, Pandemic, Performance, Operation
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References
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Jenatabadi, H. S., & Ismail, N. A. (2014). Application of structural equation modelling for estimating airline performance. Journal of Air Transport Management, 40, 25-33. Retrieved from https://doi.org/10.1016/j.jairtraman.2014.05.005
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Malhotra, N. K., & Dash, S. (2016). Marketing research: An applied orientation: Pearson.
Méndez-Suárez, M., & Monfort, A. (2020). The amplifying effect of branded queries on advertising in multi-channel retailing. Journal of business research, 112, 254-260.
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See, K. F., & Abdul Rashid, A. (2016). Total factor productivity analysis of Malaysia Airlines: Lessons from the past and directions for the future. Research in Transportation Economics, 56, 42-49. doi:10.1016/j.retrec.2016.07.004
Shaw, S. (2007). Airline Marketing and Management. Burlington: Ashgate Publishing Limited.
Singh, J., Sharma, S. K., & Srivastava, R. (2019). What drives Indian Airlines operational expense: An econometric model. Journal of Air Transport Management, 77, 32-38. Retrieved from https://doi.org/10.1016/j.jairtraman.2019.03.003
Skinner, R., Nelson, R. R., Chin, W. W., & Land, L. (2015). The Delphi method research strategy in studies of information systems. Retrieved from https://doi.org/10.17705/1CAIS.03702
Slack, N., Brandon-Jones, A., & Johnston, R. (2011). Essentials of Operations Management (1 ed.). Edinburg: Pearson Education Limited.
Teker, S., Teker, D., & Güner, A. (2016). Financial performance of top 20 airlines. Procedía-Social and behavioral sciences, 235, 603-610. Retrieved from https://doi.org/10.1016/j.sbspro.2016.11.035
Vasigh, B., Fleming, K., & Humphreys, B. (2015). Foundations of Airline Finance: Methodology and Practise (1 ed.). Oxon: Routledge.
Zhang, Q., Koutmos, D., Chen, K., & Zhu, J. (2019). Using operational and stock analytics to measure airline performance: A network DEA approach. Decision Sciences. Retrieved from https://doi.org/10.1111/deci.12363
Arviansyah, E. B., & Tan, C.-W. (2011). Evaluation of ICT Investment in Healthcare: Insights and Agenda for Future Research. University of Groningen.
Banks, E. (2007). The Basics Finance. Oxon: Routledge.
Barbot, C., Costa, Á., & Sochirca, E. (2008). Airlines performance in the new market context: A comparative productivity and efficiency analysis. Journal of Air Transport Management, 14(5), 270-274. Retrieved from https://doi.org/10.1016/j.jairtraman.2008.05.003
Bhadra, D. (2009). Race to the bottom or swimming upstream: performance analysis of US airlines. Journal of Air Transport Management, 15(5), 227-235. Retrieved from https://doi.org/10.1016/j.jairtraman.2008.09.014
Budd, L., & Ison, S. (2017). Air Transport management: An International Perspective (1 ed.). Oxon: Routledge.
Caridá, V. D., & Bonizio, R. C. (2018). Operating Performance Analysis of Gol and Ryanair Airlines. REBRAE, 11(2), 242-257. Retrieved from https://doi.org/10.7213/rebrae.11.002.A005
Castro, A. J. M., Rocha, A. P., & Olivera, E. (2014). A New Approach for Disruption Management in Airline Operations Control. (Vol. 562). London: Springer-Verlag Berlin Heidelberg.
Chao, C.-C., & Yu, P.-C. (2013). Quantitative evaluation model of air cargo competitiveness and comparative analysis of major Asia-Pacific airports. Transport Policy, 30, 318-326. Retrieved from https://doi.org/10.1016/j.tranpol.2013.10.001
Chen, S.-J., Chen, M.-H., & Wei, H.-L. (2017). Financial performance of Chinese airlines: Does state ownership matter? Journal of Hospitality and Tourism Management, 33, 1-10. Retrieved from https://doi.org/10.1016/j.jhtm.2017.08.001
Chuang, I. Y., Chiu, Y.-C., & Edward Wang, C. (2008). The performance of Asian airlines in the recent financial turmoil based on VaR and modified Sharpe ratio. Journal of Air Transport Management, 14(5), 257-262. doi:10.1016/j.jairtraman.2008.05.001
Cook, G. N., & Billig, B. G. (2017). Airline Operations and Management: A Management Textbook (1 ed.). Oxon: Routledge.
Czerny, A. I., Fu, X., Lei, Z., & Oum, T. H. (2021). Post pandemic aviation market recovery: Experience and lessons from China. Journal of Air Transport Management, 90, 101971. Retrieved from https://doi.org/10.1016/j.jairtraman.2020.101971
da Silveira Pereira, D., & de Mello, J. C. C. S. (2021). Efficiency evaluation of Brazilian airlines operations considering the Covid-19 outbreak. Journal of Air Transport Management, 91, 101976. Retrieved from https://doi.org/10.1016/j.jairtraman.2020.101976
Doganis, R. (2002). Flying Off Course III: The Economics of International Airlines (3 ed.). Oxon: Routledge.
FAA. (2004). Airplane Flying Handbook. Retrieved from https://www.faa.gov/regulations_policies/handbooks_manuals/aviation/
Ghozali, I., & Latan, H. (2015). Partial least squares konsep, teknik dan aplikasi menggunakan program smartpls 3.0 untuk penelitian empiris. Semarang: Badan Penerbit UNDIP.
Giannarou, L., & Zervas, E. (2014). Using Delphi technique to build consensus in practice. International Journal of Business Science & Applied Management (IJBSAM), 9(2), 65-82. Retrieved from https://www.econstor.eu/handle/10419/190657
Gyanwali, S., & Walsh, J. C. (2019). Influencing Factors of Organizational Performance in Nepal Airlines Corporation. International Business Research, 13(1). doi:10.5539/ibr.v13n1p268
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, 19(2), 139-152. Retrieved from https://doi.org/10.2753/MTP1069-6679190202
Hair Jr, J. F. (2020). Next-generation prediction metrics for composite-based PLS-SEM. Industrial Management & Data Systems. Retrieved from https://doi.org/10.1108/IMDS-08-2020-0505
Hanlon, P. (2007). Global Airlines: Competition in A Transnational Industry. Burlington: Butterworth-Heinemann.
Hirschhorn, F. (2019). Reflections on the application of the Delphi method: lessons from a case in public transport research. International Journal of Social Research Methodology, 22(3), 309-322. Retrieved from https://doi.org/10.1080/13645579.2018.1543841
IATA. (2020). Economic Performance of The Airline Industry. IATA Airline Industry Economic Performance. Retrieved from https://www.iata.org/en/publications/economics/
Ismail, N. A., & Jenatabadi, H. S. (2014). The influence of firm age on the relationships of airline performance, economic situation and internal operation. Transportation Research Part A: Policy and Practice, 67, 212-224. Retrieved from https://doi.org/10.1016/j.tra.2014.06.010
Jenatabadi, H. S., & Ismail, N. A. (2014). Application of structural equation modelling for estimating airline performance. Journal of Air Transport Management, 40, 25-33. Retrieved from https://doi.org/10.1016/j.jairtraman.2014.05.005
Kearns, S. K. (2018). Fundamentals of International Aviation (1 ed.). Oxon: Routledege.
KeskİN, B., UlaŞ, E., & BİLek, G. (2018). Negative Values in Dea: Examination of the Relationship between Economic Growth Rates and Airline Performances. International Journal of Management Economics and Business, 14(2), 0-0. doi:10.17130/ijmeb.2018239939
KİRaci, K., & Yaşar, M. (2020). The Determinants of Airline Operational Performance: An Empirical Study on Major World Airlines. Sosyoekonomi, 107-117. doi:10.17233/sosyoekonomi.2020.01.06
Malhotra, N. K., & Dash, S. (2016). Marketing research: An applied orientation: Pearson.
Méndez-Suárez, M., & Monfort, A. (2020). The amplifying effect of branded queries on advertising in multi-channel retailing. Journal of business research, 112, 254-260.
Peoples, J., Abdullah, M. A., & Satar, N. M. (2020). COVID-19 and Airline Performance in the Asia Pacific region. Emerald Open Research, 2(62), 62. Retrieved from https://doi.org/10.35241/emeraldopenres.13914.1
Quilty, B. J., Clifford, S., Flasche, S., & Eggo, R. M. (2020). Effectiveness of airport screening at detecting travellers infected with novel coronavirus (2019-nCoV). Eurosurveillance, 25(5), 2000080. Retrieved from https://pubmed.ncbi.nlm.nih.gov/32046816/
See, K. F., & Abdul Rashid, A. (2016). Total factor productivity analysis of Malaysia Airlines: Lessons from the past and directions for the future. Research in Transportation Economics, 56, 42-49. doi:10.1016/j.retrec.2016.07.004
Shaw, S. (2007). Airline Marketing and Management. Burlington: Ashgate Publishing Limited.
Singh, J., Sharma, S. K., & Srivastava, R. (2019). What drives Indian Airlines operational expense: An econometric model. Journal of Air Transport Management, 77, 32-38. Retrieved from https://doi.org/10.1016/j.jairtraman.2019.03.003
Skinner, R., Nelson, R. R., Chin, W. W., & Land, L. (2015). The Delphi method research strategy in studies of information systems. Retrieved from https://doi.org/10.17705/1CAIS.03702
Slack, N., Brandon-Jones, A., & Johnston, R. (2011). Essentials of Operations Management (1 ed.). Edinburg: Pearson Education Limited.
Teker, S., Teker, D., & Güner, A. (2016). Financial performance of top 20 airlines. Procedía-Social and behavioral sciences, 235, 603-610. Retrieved from https://doi.org/10.1016/j.sbspro.2016.11.035
Vasigh, B., Fleming, K., & Humphreys, B. (2015). Foundations of Airline Finance: Methodology and Practise (1 ed.). Oxon: Routledge.
Zhang, Q., Koutmos, D., Chen, K., & Zhu, J. (2019). Using operational and stock analytics to measure airline performance: A network DEA approach. Decision Sciences. Retrieved from https://doi.org/10.1111/deci.12363
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Submitted
2021-12-11
Accepted
2021-12-27
Published
2021-12-28
How to Cite
Iskandar, D., & ., A. (2021). Relationship of Covid-19 Pandemic on Performance and Internal Operation of The Airline. The Asian Journal of Technology Management (AJTM), 14(3), 256–271. https://doi.org/10.12695/ajtm.2021.14.3.5
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