Fleet Standardisation and Airline Performance

Li Zou, Chunyan Yu, Martin Dresner

Research output: Contribution to journalArticlepeer-review

Abstract

We develop three fleet standardisation measurements to estimate their impacts on airline costs and profitability. Using panel data for a group of US airlines from 1999 to 2009, we find that fleet standardisation, as expected, leads to lower unit costs. However, after controlling for its cost-reducing effects, fleet standardisation is negatively related to profit margin. Our findings provide quantitative evidence of the trade-off between the costs and benefits from fleet commonality. Although airlines can benefit from cost savings in flight operations and maintenance with a more standardised fleet, the potential negative revenue impacts from fleet standardisation have generally been overlooked.
Original languageAmerican English
JournalJournal of Transport Economics and Policy
Volume49
StatePublished - Jan 2015

Keywords

  • airlines
  • aircraft
  • unit costs
  • profit margins
  • revenue
  • passengers
  • operating costs
  • transportation economics
  • economic policy
  • economic models

Disciplines

  • Business
  • Finance and Financial Management
  • Business Analytics

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