Factors Affecting Airline Profits: Evidence From The Philippines

This article examines the factors that affect the profits of four airlines in the Philippines. The estimated profit equation indicates that an additional passenger contributes PHP 1,989 to profits, while an additional seat reduces profits by PHP 1,312. The findings indicate that airlines have a stro...

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Main Author: Manuela, Wilfred S, Jr
Format: text
Published: Archīum Ateneo 2011
Subjects:
Online Access:https://archium.ateneo.edu/leadership-and-strategy-faculty-pubs/13
https://clutejournals.com/index.php/JABR/article/view/6462
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Institution: Ateneo De Manila University
id ph-ateneo-arc.leadership-and-strategy-faculty-pubs-1012
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spelling ph-ateneo-arc.leadership-and-strategy-faculty-pubs-10122020-09-14T05:53:30Z Factors Affecting Airline Profits: Evidence From The Philippines Manuela, Wilfred S, Jr This article examines the factors that affect the profits of four airlines in the Philippines. The estimated profit equation indicates that an additional passenger contributes PHP 1,989 to profits, while an additional seat reduces profits by PHP 1,312. The findings indicate that airlines have a strong incentive to fill a seat before departure, justifying the practice of heavy discounting to stimulate passenger traffic during periods of low demand. An additional route reduces profits by PHP 107.736 million, which may indicate that new routes have lower-than-expected passenger traffic. This may also suggest that most profitable routes are already served by at least one airline and entry into existing routes may not be profitable. The 1997 Asian financial crisis, the 2001 terror attacks in the United States, and the most recent global financial crisis, collectively result in PHP 1.391 billion reduction in profits, underscoring the vulnerability of the airline industry to unanticipated events. 2011-10-27T07:00:00Z text https://archium.ateneo.edu/leadership-and-strategy-faculty-pubs/13 https://clutejournals.com/index.php/JABR/article/view/6462 Leadership and Strategy Faculty Publications Archīum Ateneo Airline Profits Philippine Airline Industry Business
institution Ateneo De Manila University
building Ateneo De Manila University Library
country Philippines
collection archium.Ateneo Institutional Repository
topic Airline Profits
Philippine Airline Industry
Business
spellingShingle Airline Profits
Philippine Airline Industry
Business
Manuela, Wilfred S, Jr
Factors Affecting Airline Profits: Evidence From The Philippines
description This article examines the factors that affect the profits of four airlines in the Philippines. The estimated profit equation indicates that an additional passenger contributes PHP 1,989 to profits, while an additional seat reduces profits by PHP 1,312. The findings indicate that airlines have a strong incentive to fill a seat before departure, justifying the practice of heavy discounting to stimulate passenger traffic during periods of low demand. An additional route reduces profits by PHP 107.736 million, which may indicate that new routes have lower-than-expected passenger traffic. This may also suggest that most profitable routes are already served by at least one airline and entry into existing routes may not be profitable. The 1997 Asian financial crisis, the 2001 terror attacks in the United States, and the most recent global financial crisis, collectively result in PHP 1.391 billion reduction in profits, underscoring the vulnerability of the airline industry to unanticipated events.
format text
author Manuela, Wilfred S, Jr
author_facet Manuela, Wilfred S, Jr
author_sort Manuela, Wilfred S, Jr
title Factors Affecting Airline Profits: Evidence From The Philippines
title_short Factors Affecting Airline Profits: Evidence From The Philippines
title_full Factors Affecting Airline Profits: Evidence From The Philippines
title_fullStr Factors Affecting Airline Profits: Evidence From The Philippines
title_full_unstemmed Factors Affecting Airline Profits: Evidence From The Philippines
title_sort factors affecting airline profits: evidence from the philippines
publisher Archīum Ateneo
publishDate 2011
url https://archium.ateneo.edu/leadership-and-strategy-faculty-pubs/13
https://clutejournals.com/index.php/JABR/article/view/6462
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