Time-Series Statistical Model for Forecasting Revenue and Risk Management

Following a Low-Cost Carrier (LCC) model, Southwest Airlines has consistently demonstrated growing annual revenues up until the start of the COVID-19 pandemic. Southwest’s quarterly revenue shows that there exists a strong seasonal component with the revenue in the first quarter of the fiscal year (September) significantly higher than other quarters. Using the quarterly revenue data we constructed a time-series model: a seasonal autoregressive integrated moving average (SARIMA) model to forecast Southwest’s revenue over 2020. We then performed a cost and solvency risk analysis using the company’s financial results from its annual reports to analyze Southwest’s financial performance due to COVID-19, and proposed business strategies to keep Southwest financially stable.

Are Passengers Willingness to Pay Extra Money for Domestic Flight Low-Cost Carrier Airline in Covid-19 Pandemic?

This paper examines willingness to pay extra money for domestic flight low-cost carrier airline in covid-19 pandemic. Specifically, the goal of this research is to investigate the level of willingness to pay, measured by perceived passengers and perceived prices. This study found that only perceived prices for domestic flight low-cost carrier airline in Covid-19 pandemic showed has a statistically significant impact on willingness to pay extra money has a value 85 percent. In addition, the key topics for willingness to pay are enjoyfull, agreeableness, brave, comfortable, easy going and confidence. Future studies, with the data of specific not only LCC Airlines Companies are encouraged to explore this issue.

Customers’ Experiences of Compassion and Brand Attitude: Evidence From Low-Cost Carriers

The purpose of this study is to examine the effect of compassion experienced by low-cost carriers customers on their brand attitudes. Specifically, this study aims to unbox the mechanisms through how the customers’ experiences of compassion influence the formation of positive brand attitudes. Using the data from 423 low-cost carriers customers in South Korea, this study found that the more low-cost carriers’ customers experience compassion, the more positive their brand attitudes are toward the low-cost carriers. Notably, this study demonstrated that the positive relationship between compassion and brand attitudes is serially mediated by positive emotion and positive brand image. The results from this study contribute to the literature on the airline industry by examining the roles of compassion, which is relatively new to the field, and also provide practical insights for a low-cost carrier to come up with competitive strategies to achieve a competitive advantage over its competitors in the industry.

Factors Affecting the Revenue of Air Asia Berhad During Covid-19 Pandemic

Air Asia Berhad is very well-known as the low-cost airline, the headquarter is located in Kuala Lumpur, Malaysia. It is the largest airline in Malaysia by fleet size and destinations. It has consistently been named as the world’s best low-cost carrier for 11 years by Skytrax. Low-cost plan helps the company to earn profit in fact. However, in 2020, the revenue of Air Asia Berhad has decreased terribly due to the Covid-19 pandemic. Covid-19 pandemic began to spread in the final week of January 2020 at Malaysia and until this moment in time, the whole world is still facing the pandemic. It is also known as Coronavirus which can be spread through air and close contact. Due to Covid-19 pandemic, the passengers carried has been decreased by 74% by January to December 2020 on comparison with January to December 2019 which directly implies less revenue generation. Furthermore, many of the staff has been laid off. The particular aim for this research is to determine the factors affecting the revenue generation of the company during Covid-19. Google form was used to collect the needed information for this research. With the collected data through the study, it was found out that restrictions in travelling, paucity of passengers and high number of workers in the company are the main factors giving the current impact to the company’s revenue.

Pengaruh Service Quality Dan Customer Trust Terhadap Kepuasan Konsumen Maskapai Penerbangan Lion Air (Studi Kasus Bandara Internasional Raja Haji Fisabilillah Tanjungpinang)

Consumer satisfaction (Consumer Satisfaction) is a given positive attitude of consumers towards a service provided by a service company. Companies are expected to consider the factors that affect customer satisfaction. Lion Air, which is based on top brand award, is ranked first in the category of aviation services that use the LCC (low cost carrier). The almost all airports increase in passenger numbers in Indonesia, particularly in the international airport Raja Haji Fisabilillah Tanjungpinang. This study aims to examine the effect of service quality and customer trust to satisfaction of the consumer. The sample size is 60 people. This study uses a sampling method is the accidental sampling technique. technical analysis hypothesis testing using the Lisrel 8.5 program and Microsoft Excel version 2013. From this test later it can be seen how much the contribution of the independent variable (Service Quality, customer trust to the dependent variable (Lion Air Airlines customer satisfaction). The results showed that both directly and indirectly service quality and customer trust affect the satisfaction of customers of Lion Air

Effects of Southwest Airlines on Carrier Profits and Entry Probabilities

This paper studies the effects of Southwest Airlines, the largest low-cost carrier (LCC) in the U.S., on other carriers’ payoff functions and entry probabilities. A static entry game model is developed and estimated by viewing entry as an indicator of underlying profitability and making use of Nash Equilibrium. Results indicate that Southwest has a remarkable and negative impact on the payoffs of other carriers. This impact is firm-specific, with LCCs being more affected than full-service carriers (FSCs). Comparing the two service types, the results show that Southwest’s nonstop presence apparently imposes more downward pressure on opponents’ profits than its connecting presence. A counterfactual experiment is then conducted. Once Southwest is counterfactually removed, the probability of each carrier entering a market significantly changes. This paper examines Southwest’s impacts from a new perspective and extends literature on entry game estimation.