The Effects of Sales Changes on Resource Utilisation in the Airline Industry

Mark Anderson, Joo Hyung Lee, Raj Mashruwala and Zhimin Yu

Accounting and Finance, 2025, vol. 65, issue 3, 2665-2677

Abstract: We investigate how sales changes affect resource utilisation across operating strategies by examining how full‐time and part‐time employment change with increases and decreases in sales for full‐service carriers (FSCs) and low‐cost carriers (LCCs). We componentise sales into capacity provided (available seat miles or ASM), capacity used (average load) and selling price. We predict and find that LCCs increase full‐time labour utilisation more (exhibit resource strain) than FSCs when sales increase and that FSCs decrease full‐time labour utilisation more (exhibit resource slack) than LCCs when sales decrease. LCCs, on the other hand, retain more part‐time labour when sales decrease.

Date: 2025
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