1st Edition
The Airline Profit Cycle A System Analysis of Airline Industry Dynamics
Contents
List of Figures
List of Tables
Foreword by Peter-M. Milling
Foreword by R. John Hansman
Preface
1. The airline profit cycle as a persistent phenomenon
1.1. The development of airline traffic and cyclic financial results
1.2. Consequences of the airline profit cycle
1.3. Research objective and approach
2. Potential causes of the airline profit cycle
2.1. Literature review on business cycle drivers
2.2. Systems literature on cyclical dynamics
2.3. Existing airline profit cycle research
2.4. Industry practitioners’ views on airline profit cyclicality
2.5. Categorisation of airline profit cycle drivers
3. System Dynamics model of airline industry profit development
3.1. Need for a System Dynamics analysis
3.2. Outline of the airline profit cycle model
3.3. Decision design and mechanisms in the model
3.4. Validation of model structure
3.5. Calibration of the model for the U.S. airline industry
3.6. Confidence in the model’s behaviour and results
4. Examination of airline profitability dynamics in model experiments
4.1. Identification of cycle origin area
4.2. Approach to scenario analysis and sensitivity assessment
4.3. Influence of general economic factors on airline profits
4.4. Impact of airline industry environment on airlines’ financial performance
4.5. Airlines’ behaviour as driver of cyclicality
4.6. Main causes and dynamics constituting the airline profit cycle
5. Conclusions for the airline industry
6. References
7. Appendix
7.1. Appendix A: Cost classification
7.2. Appendix B: Background information ATA Cost Index
7.3. Appendix C: Airline profit cycle model data and equations
Index
Biography
Eva-Maria Cronrath is Executive Assistant to the Executive Board Member for Aeronautics, German Aerospace Center (DLR), Germany.
