Relevance of route and network profitability analysis for the network management process of network carriers

Thomas Niehaus, Jens Ruehle and Alexander Knigge

Journal of Air Transport Management, 2009, vol. 15, issue 4, 175-183

Abstract: Route profitability analysis (RPA) and network profitability analysis (NPA) represent common approaches to measure the profitability of flights in the airline industry. Scientific discussion, however, lacks an in-depth understanding of their impact on the network management process or of their implementation throughout the industry and their design. Here we analyze RPA and NPA and evaluate their potential influence on network management-related decision making. We argue that both approaches vary in applicability and suitability according to airline business models (i.e. network carriers, point-to-point carriers). Furthermore, we present the findings of a study among the top 100 network carriers worldwide on the relevance of RPA and NPA. Results indicate a wide implementation of RPA and to a lesser degree of NPA. In addition, the sophistication of the profitability analysis and the application of the retrieved profitability data for planning purposes differ considerably between airlines.

Keywords: Route Profitability Analysis; Network Profitability Analysis; Network Management; Controlling (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:15:y:2009:i:4:p:175-183

DOI: 10.1016/j.jairtraman.2008.09.011

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