The relationship between airlines and airports: Th l ti hi b t i - - PowerPoint PPT Presentation

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The relationship between airlines and airports: Th l ti hi b t i - - PowerPoint PPT Presentation

May 30, 2023 244 likes •440 views

U NIVERSITY OF C OLOGNE Department of Business Policy & Logistics Prof. Dr. Dr. h.c. Werner Delfmann The relationship between airlines and airports: Th l ti hi b t i li d i t An analysis of dimensions and success factors to improve

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

  • Prof. Dr. Dr. h.c. Werner Delfmann

Th l ti hi b t i li d i t The relationship between airlines and airports: An analysis of dimensions and success factors to improve cooperation and efficiency to improve cooperation and efficiency

Bjoern Goetsch, Jens Ruehle & Sascha Albers Department of Business Policy & Logistics University of Cologne

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

AGENDA

  • Prof. Dr. Dr. h.c. Werner Delfmann

1 Introduction 2 1 Theoretical Framework: Extended IMP Model Introduction 3 Airport-Airline Model 4 5 Empirical Study Preliminary Results 5 Preliminary Results

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Introduction

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • The ongoing liberalization and privatization leads to sustainable change in

the relationship between airports and airlines A th ff t th d l t lt i il i id

  • Among other effects, these developments result primarily in a wider range
  • f strategic options for both actors
  • Due to increased air traffic demand and pressure on costs and capacity,

p p y, the importance of this relationship will increase significantly

  • Another problem area arises from the very different (service) requirements
  • f the carriers (LCC vs FSC) and substantial regional (international)
  • f the carriers (LCC vs. FSC) and substantial regional (international)

differences in the industry

  • In most cases the current relationship can be characterized as problematic
  • r at least as difficult
  • A solution to this issue can only be reached by joint efforts

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Introduction (2)

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • „In all cases, [airport] operators will have to work much more closely with

the carriers to optimize joint interfaces and to leverage cost and revenue synergies.“ y g (BCG Report, 2004)

  • „From the customers’ point of view, closer cooperation will be increasingly

necessary for the simple reason that if customers don’t have a good necessary for the simple reason that if customers don t have a good perception of the situation (…), it will obviously impact on the image of both partners.“ (Spinetta CEO AirFrance & IATA in: Jarach: Airport Marketing 2005) (Spinetta, CEO AirFrance & IATA, in: Jarach: Airport Marketing, 2005)

  • „…, thus establishing a solid basis for a strong partnership between airlines

and the airport.“ (G b Vi P id t LH A i ti I f t t M t i JATM (Gerber, Vice President LH Aviation Infrastructure Management, in: JATM, 2002)

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Literature Review

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • Although there is extensive research on all forms of cooperation, the

airport-airline relationship in general has been almost neglected S f f

  • Single aspects of the relationship are dominating the research field,

e.g. slot allocation mechanisms or pricing issues

  • Existing research may also take a very general approach to describe the

g y y g pp relation, e.g. Graham (2002)

  • A systematic analysis and configurational propositions are rather limited

[Exceptions: Fuhr & Beckers 2006; Albers Koch Ruff (2005); [Exceptions: Fuhr & Beckers, 2006; Albers, Koch, Ruff (2005); Gillen, Lall (2004); Francis, Fidato, Humphreys (2003)]

  • Due to its increasing importance, the topic tends to be an issue on industry

conferences (e.g. London 2004, Orlando 2005)

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

AGENDA

  • Prof. Dr. Dr. h.c. Werner Delfmann

1 Introduction 2 1 Theoretical Framework: Extended IMP Model Introduction 3 Airport-Airline Model 4 5 Empirical Study Preliminary Results 5 Preliminary Results

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Research Logic

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • Goal is to conceptually grasp the relationship and to uncover

major mechanisms and interactions between determinants and elements of the very complex relationship elements of the very complex relationship

  • Model as diagnostic as well as design tool for the relationship
  • Two classes of variables
  • Contingency variables: given, cannot be influenced directly, but

considerable influence on the relationship

  • Design variables: directly adjustable by management decisions,

i.e. they offer opportunities to shape relationship

  • Focus on design variables and propositions
  • Focus on design variables and propositions
  • Model based on IMP interaction model (Hakansson, 1982)

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Extended IMP Interaction Model

  • Prof. Dr. Dr. h.c. Werner Delfmann

fixed variables Environment Actors Atmosphere adjustable variables Interaction Process Strategic Outcome Strategic Outcome

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

AGENDA

  • Prof. Dr. Dr. h.c. Werner Delfmann

1 Introduction 2 1 Theoretical Framework: Extended IMP Model Introduction 3 Airport-Airline Model 4 5 Empirical Study Preliminary Results 5 Preliminary Results

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Overview of Hypotheses

  • Prof. Dr. Dr. h.c. Werner Delfmann

ENVIRONMENT ATMOSPHERE INTERACTION PROCESS

Interdependence Specific Investments Uncertainty p Trust p Institutionalization Trust Institutionalization regular contingency variables and relations Commitment Joint Action italics and relations design variables and relations

STRATEGIC OUTCOME

Relationship Performance G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

AGENDA

  • Prof. Dr. Dr. h.c. Werner Delfmann

1 Introduction 2 1 Theoretical Framework: Extended IMP Model Introduction 3 Airport-Airline Model 4 5 Empirical Study Preliminary Results 5 Preliminary Results

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Data Collection and Methodology

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • The sample was drawn from the TOP 200 airlines as ranked

by Airline Business in 2007 (see Airline Business, Vol. 23, No 8)

  • No. 8)
  • Key informants: Senior airline manager of respective hub or

base airport

  • Response rate: Approx. 33% (n=65)
  • A structural equation modeling (SEM) approach has been

chosen to evaluate both error in construct measurement and chosen to evaluate both error in construct measurement and error in hypothesized relations

  • PLS approach (in contrast to LISREL) due to small sample

pp ( ) p size and the use of formative and second order constructs

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Sample Description

  • Prof. Dr. Dr. h.c. Werner Delfmann

Geographical Spread Business Models

Europe North America Asia Full Service Carrier Low Cost Carrier Regional Carrier

R 2007 (i i USD) P (i i ) Revenue 2007 (in mio. USD)

< 1,000

Passenger (in mio.)

< 10 1,000 1,000 - 10,000 > 10,000 10 10 - 40 > 40

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Structural Model – Direct Effects

  • Prof. Dr. Dr. h.c. Werner Delfmann

ENVIRONMENT ATMOSPHERE INTERACTION PROCESS

Interdependence Specific Investments 0,200 * Uncertainty p Trust p Institutionalization 0,222 * 0,457 ***

  • 0,147 n.s.
  • 0,083 n.s.

0,515 *** 0 242 ** Trust Institutionalization regular contingency variables and relations 0,199 * 0,563 *** , 0,404 ** 0,136 n.s. 0,456 *** 0,242 ** Commitment Joint Action italics and relations design variables and relations 0,471 *** 0,182 n.s.

STRATEGIC OUTCOME

Relationship Performance n.s. = not significant * = significant at 0,05 level ** = significant at 0,01 level *** = significant at 0,001 level g , G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Structural Model – Indirect and Total Effects

  • Prof. Dr. Dr. h.c. Werner Delfmann

ATMOSPHERE INTERACTION PROCESS

Specific Investments

Direct Effect Institutionalization – Relationship Performance: 0 136 n.s.

Trust p Institutionalization 0,457 ***

Indirect Effects Relationship Performance: 0,136 n.s.

Trust Institutionalization 0,136 n.s. 0,456 *** 0,242 **

via Trust: 0,214 ** via Specific Investments: 0,111 * via Joint Action: 0,071 n.s.

0,563 *** 0,471 *** Joint Action 0,182 n.s.

(results based on Sobel-Test)

STRATEGIC OUTCOME

Relationship Performance

Total Effect Institutionalization – Relationship Performance: 0,532 *** p ,

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

AGENDA

  • Prof. Dr. Dr. h.c. Werner Delfmann

1 Introduction 2 1 Theoretical Framework: Extended IMP Model Introduction 3 Airport-Airline Model 4 5 Empirical Study Preliminary Results 5 Preliminary Results

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Preliminary Results

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • Airline-Airport-Interaction-Model as a first step to structure and analyze

the relationship

  • Introduced different dimensions / variables and propositions regarding
  • Introduced different dimensions / variables and propositions regarding

the interaction process

  • Apparently, trust and institutionalization (=governance of the relationship)

l j l i ti l ti hi play a major role in generating relationship success

  • Relationship model allows for a systematic analysis of the current

situation of the airport-airline relationship (diagnostic tool)

  • Based on this assessment the management may identify additional

potential for efficiency or service level improvements (design tool)

  • This in turn may cumulate in a customer-specific development of the
  • This, in turn, may cumulate in a customer-specific development of the

relationship, i.e. the creation of trust or the development of dedicated governance mechanisms

G.A.R.S. Berlin 2008 - Bjoern Goetsch

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Department of Business Policy & Logistics

UNIVERSITY OF COLOGNE

Future Research

  • Prof. Dr. Dr. h.c. Werner Delfmann
  • Detailed analysis of interdependence construct as effects from

dependence (one-sided) and interdependence (two-sided) may differ differ

  • Detailed analysis of institutionalization construct, i.e. determining

the performance contribution of every single governance mechanism (control, coordination, incentive)

  • Control relationship model for airline business model and regional

differences differences

  • Due to the importance of trust it might be helpful to identify trust-

building mechanisms in the airport-airline context

  • Consideration of the airports’ view in order to account for major

differences

G.A.R.S. Berlin 2008 - Bjoern Goetsch