Time Series Analysis of Global Airline Passengers Transportation Industry

Radoslaw Okulski () and Almas Heshmati ()
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Radoslaw Okulski: Technology Management, Economics, and Policy Program (TEMEP), Seoul National University

No 201065, TEMEP Discussion Papers from Seoul National University; Technology Management, Economics, and Policy Program (TEMEP)

Abstract: Technological developments and the global economic crisis are two types of developments that have affected the commercial airline industry in the last decade. This paper investigates time series analysis of the airline industry. The research has been conducted and is being presented, in a number of steps. First, a new, large database covering the global airline industry was assembled. Second, as part of the descriptive analysis of the industry and modeling a number of statistical tests are investigated. Third, the passenger airline transportation services models are estimated, to investigate their transportation entry and exit activities, as well as issues of heterogeneity and autocorrelation. Finally, we predict future developments within the industry. The empirical results are based on a large panel of 130 airlines observed monthly from January 2001 to April 2009. The airline produce two services of passenger and goods separately or jointly. The results show that specialized passenger companies cannot obtain sufficient revenues to stay at the market for long time. Airlines reduce costs through adding additional products. The worst performed joint service airlines¡¯ result of carrying passengers is much better than the result of specialized best practice airlines. In order to gain profit and improved survival rate, airlines specialized in passenger transportation must diversify their practice to carry both goods and passengers together.

Keywords: Airlines; time series analysis; ARIMA model; forecasts; information technology. (search for similar items in EconPapers)
JEL-codes: C22 C53 D21 L20 L93 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2010-07, Revised 2010-07
New Economics Papers: this item is included in nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:snv:dp2009:201065

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