Dynamically interdependent business model for airline–airport coexistence

 

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This study examines the load factor guarantee, a dynamically interdependent business model for airline-airport coexistence where an airline and an airport agree on the load factor of a flight, after which either party compensates for any discrepancies between the actual and agreed-upon load factor. The simulation results show that adjustments to the load factor can decrease any discrepancies between the financial states of an airline and an airport. However, it cannot break the symmetry of both parties’ financial states. Conversely, adjustments to the demand can break the symmetry, but they cannot lessen the discrepancy. Thus, it is concluded that integrating load factor adjustment and monthly demand adjustment is the key to successful airline-airport coexistence. Although integration of a subsidy with an LFG means a temporary financial loss for the airport, research indicates that such a measure is effective for long-term airline-airport coexistence.

Collected and summarized from the source below by Giang Tan  https://db.vista.gov.vn:2095/science/article/pii/S0969699716302988