Methodological framework for a deeper understanding of airline profit cycles in the context of disruptive exogenous impacts

Renold, Manuel; Vollenweider, Janik; Mijović, Nemanja; Kuljanin, Jovana; Kalić, Milica

doi:10.1016/j.jairtraman.2022.102305

Please use this identifier to cite or link to this item: https://doi.org/10.21256/zhaw-28498

Publication type:	Article in scientific journal
Type of review:	Peer review (publication)
Title:	Methodological framework for a deeper understanding of airline profit cycles in the context of disruptive exogenous impacts
Authors:	Renold, Manuel Vollenweider, Janik Mijović, Nemanja Kuljanin, Jovana Kalić, Milica
et. al:	No
DOI:	10.1016/j.jairtraman.2022.102305 10.21256/zhaw-28498
Published in:	Journal of Air Transport Management
Volume(Issue):	106
Issue:	102305
Issue Date:	2023
Publisher / Ed. Institution:	Elsevier
ISSN:	0969-6997 1873-2089
Language:	English
Subjects:	k-means clustering; Airline profitability cycle; Operating profit prediction; System dynamic modelling; Principal component analysis
Subject (DDC):	380: Transportation
Abstract:	This paper combines the k-means clustering method in combination with PCA and the system dynamic modeling approach to derive a better insight into the behavior of airline profitability during the time span of 1995 until 2020. The model includes various explanatory variables that capture different aspects of airline economic and operational metrics, whose fluctuations may affect the airline profitability. By forecasting these exogenous variables, the system dynamic model is used to predict airline profitability through 2025 and answer the question of whether the US airline industry will return to its pre-COVID 19 pandemic state. The latter research question can be agreed with, as the effect of introducing a fourth dimension derived from Principal Component Analysis (PCA) to sufficiently cover the variation within the dataset during the years of COVID-19 pandemic diminishes towards the end of the forecast period. Furthermore, the key measures from PCA imply that under the assumption of continuous growth and a non-exogenous shock, future years will not cluster in past years. The six different clusters from 2019 to 2025 showed how the system stays in a certain state for a few years and then drifts further to a new state. There are only a few variables that change to transfer from one cluster to the next.
URI:	https://digitalcollection.zhaw.ch/handle/11475/28498
Fulltext version:	Published version
License (according to publishing contract):	CC BY-NC-ND 4.0: Attribution - Non commercial - No derivatives 4.0 International
Departement:	School of Engineering
Organisational Unit:	Institute of Data Analysis and Process Design (IDP)
Appears in collections:	Publikationen School of Engineering

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Renold, M., Vollenweider, J., Mijović, N., Kuljanin, J., & Kalić, M. (2023). Methodological framework for a deeper understanding of airline profit cycles in the context of disruptive exogenous impacts. Journal of Air Transport Management, 106(102305). https://doi.org/10.1016/j.jairtraman.2022.102305

Renold, M. et al. (2023) ‘Methodological framework for a deeper understanding of airline profit cycles in the context of disruptive exogenous impacts’, Journal of Air Transport Management, 106(102305). Available at: https://doi.org/10.1016/j.jairtraman.2022.102305.

M. Renold, J. Vollenweider, N. Mijović, J. Kuljanin, and M. Kalić, “Methodological framework for a deeper understanding of airline profit cycles in the context of disruptive exogenous impacts,” Journal of Air Transport Management, vol. 106, no. 102305, 2023, doi: 10.1016/j.jairtraman.2022.102305.

RENOLD, Manuel, Janik VOLLENWEIDER, Nemanja MIJOVIĆ, Jovana KULJANIN und Milica KALIĆ, 2023. Methodological framework for a deeper understanding of airline profit cycles in the context of disruptive exogenous impacts. Journal of Air Transport Management. 2023. Bd. 106, Nr. 102305. DOI 10.1016/j.jairtraman.2022.102305

Renold, Manuel, Janik Vollenweider, Nemanja Mijović, Jovana Kuljanin, and Milica Kalić. 2023. “Methodological Framework for a Deeper Understanding of Airline Profit Cycles in the Context of Disruptive Exogenous Impacts.” Journal of Air Transport Management 106 (102305). https://doi.org/10.1016/j.jairtraman.2022.102305.

Renold, Manuel, et al. “Methodological Framework for a Deeper Understanding of Airline Profit Cycles in the Context of Disruptive Exogenous Impacts.” Journal of Air Transport Management, vol. 106, no. 102305, 2023, https://doi.org/10.1016/j.jairtraman.2022.102305.