What is it about?
The authors investigate how air cargo business affects the efficiency of passenger-cargo combination carriers (CCs). The globalization of the supply chain has impacted airlines and resulted in competitive pressure on the air cargo industry. Since 2008, the air cargo growth rate has not sustained the growth of previous years. We show that the cargo business of CCs using wide-bodied dedicated freighter aircraft (DFA) has had not a positive relationship on the airlines’ efficiency due to a lack of similarities between the passenger and cargo networks for asset sharing. The findings indicate that the DFA that use CCs should have independent and improved supply chain strategies to assist their customers in positioning global supply chain capability as part of their integrated supply chain strategies.
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Why is it important?
). The air cargo strategies could be different between combination carriers (CCs) with dedicated freighters and CCs with only belly space of passenger aircraft. However, within academic literature, there is limited coverage of the wide-bodied dedicated freighter aircraft on CCs and the corresponding competitive airline strategies that have been developed. Hence the overall aim of this paper is to fill this gap by applying the data envelopment analysis (DEA)-principal component analysis (PCA), ordinary least square (OLS) regression, and Kruskal-Wallis (K-W) tests on the relationship between the use of wide-bodied DFAs and the efficiency of the CCs.
Perspectives
Air cargo services are vital for the manufacturing trade, particularly the trade of components that is a major part of the cross-border trade (IATA, 2017). To deliver competitive services, the industry has to evolve significantly. The biggest challenges that led to the air cargo growth rate not sustaining the growth of previous years are the economic recession, changes in product characteristics (Fisher, 2003), dissimilarities, and lack of economies of scale between the passenger and cargo service networks (Reis & Silva, 2016), especially for CCs using wide-bodied DFAs. Using the belly space of passenger aircraft is more efficient than the use of DFAs given the limited supply chain services. Thus, combination carriers that provide cargo services using wide-bodied DFAs should incorporate better supply chain strategies for their clients’ long-term needs instead of simply focusing on transporting cargo from airport to airport. Alternatively, combination carriers can offer a competitive advantage by providing a complementary business model for dedicated freighter aircraft and the use of the passenger aircraft’s belly space.
Dr. Seock-Jin Hong
Read the Original
This page is a summary of: Estimation viability of dedicated freighter aircraft of combination carriers: A data envelopment and principal component analysis, International Journal of Production Economics, August 2018, Elsevier,
DOI: 10.1016/j.ijpe.2018.05.012.
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