The impact of airline business models on excess capacity

Fecri Karanki

Managerial and Decision Economics, 2023, vol. 44, issue 6, 3556-3571

Abstract: Could airlines manage their excess capacity? This is a timely question, considering the likely growth in demand in the post‐pandemic period. As capacity reflects competitive priorities, business models can account for excess capacity. This study examines the impact of business models on excess capacity. The results show that capacity utilization decreased by 7%, although technical efficiency increased by 6%. As excess capacity differs across business models, airlines adopting the full‐service airline business model have higher capacity utilization than their competitors. This can be explained by the actions taken by full‐service airlines after the 2008 financial crisis.

Date: 2023
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https://doi.org/10.1002/mde.3895

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:44:y:2023:i:6:p:3556-3571

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