Examining the impact of cargo and ancillary revenues on net profit for full service carrier airlines

Onur Bas and Tamer Aksoy
Additional contact information
Onur Bas: Department of Business Management, School of Graduate Studies, Ibn Haldun University, Istanbul, Turkey
Tamer Aksoy: School of Business, Ibn Haldun University, Istanbul, Turkey

International Journal of Business Ecosystem & Strategy (2687-2293), 2022, vol. 4, issue 3, 48-72

Abstract: In this study, the relationships between cargo revenues, ancillary revenues and net profitability of airline companies were examined in the examples of three full-service airline companies (Turkish Airlines, American Airlines, Delta Air Lines). Methodologically, a logarithmic econometric model was used in which cargo revenues and ancillary revenues were included as independent variables and net profit as the dependent variables. The data used for the period 2014Q1-2019Q4 were collected from the annual reports on the official websites of related airline companies and The International Air Transport Association (IATA). EViews 10 and STATA-15 versions, which are the most modern econometric analysis programs that can be used to control the stationarity, were used in the analysis of the data. In addition to econometric analyzes and general statistics, Cross Section dependency tests, CADF second-generation unit root tests, Delta slope homogeneity tests, Panel cointegration analysis, Westerlund Panel cointegration tests and Dumitrescu Hurlin Panel Causality tests and Breusch Pagan LM Tests were also performed. The study revealed that there is cointegration between cargo revenues, ancillary revenues and net profit, and there is a one-way causality relationship from both cargo revenues to net profit and from ancillary revenues to net profit. The study also indicated a positive correlation between cargo revenues and ancillary revenues and net profit. In other words, cargo revenues and ancillary revenues have a positive effect on the net profit of airline companies. In addition, the study found that aviation ancillary revenues provide an important resource for airline companies; furthermore, two US companies are among the top three companies with the highest revenues in the world in terms of cargo and ancillary revenues; also showed that Turkish Airlines' ancillary revenues are lower than those of these two US companies. On the other hand, the study showed that the contribution of Turkish Airlines cargo revenues to net profit is much higher than the other two companies.

Keywords: Cargo Revenues; Ancillary Revenues; Net Profit; Aviation; Financial Management; Financial Accounting (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bussecon.com/ojs/index.php/ijbes/article/view/330/175 (application/pdf)
https://doi.org/10.36096/ijbes.v4i3.330 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adi:ijbess:v:4:y:2022:i:3:p:48-72

Access Statistics for this article

International Journal of Business Ecosystem & Strategy (2687-2293) is currently edited by Umit Hacioglu

More articles in International Journal of Business Ecosystem & Strategy (2687-2293) from Bussecon International Academy Bussecon International Academy, School of Business, IHU, Ordu cad. F-05 Blok No 3, 34480 Basaksehir, Istanbul, Turkey. Contact information at EDIRC.
Bibliographic data for series maintained by Umit Hacioglu ().