Airline service quality and economic factors: An ARDL approach on US airlines

Panagiotis Stamolampros, Nikolaos Korfiatis

Research output: Contribution to journalArticle

7 Citations (Scopus)
7 Downloads (Pure)

Abstract

This study examines the impact of interest rates, fuel prices, and market concentration on airline service performance. Rather than focusing on an airline-level analysis, we employ aggregated data from the US Department of Transportation (DOT) and the Airline Consumer Report (ACR) to explore four airline service performance metrics, namely: on-time performance, cancelled flights, mishandled baggage, and passenger's complaints. We gauge the long run effect of the variables of interest using an Autoregressive Distributed Lag bound approach. The findings reveal long-term linkages between airline service levels and the variation in interest rates and market concentration providing new evidence on the trade-off relation between financial pressures and service quality and has practical implications for both regulators and airline managers. Our results are robust to business cycle effects including the great recession.
Original languageEnglish
Pages (from-to)24-31
JournalJournal of Air Transport Management
Volume77
Early online date22 Mar 2019
DOIs
Publication statusPublished - Jun 2019

Keywords

  • Airline service levels
  • ARDL bound test
  • Market concentration

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