دانلود رایگان مقاله محرک های بهره وری عملیاتی و تاثیر آن بر عملکرد بازار

abstract

India is considered to be one of the toughest aviation markets in the world, due to high fuel prices, overcapacity and intense price competition. It is therefore important to identify critical drivers of performance, which enable the airlines to survive and succeed in this emerging market with huge growth potential. In the current empirical study, we investigate the linkages between various performance drivers, operational efficiencies and market performance. An extensive data collection using primary and secondary sources enabled us to gather data on all the airlines operating in India, both private and public, for the period 2005e2012, on a variety of important parameters. We carried out a two-stage empirical analysis, which involved estimation of operational efficiencies during the first stage using Data Envelopment Analysis, and determination of performance drivers during the second stage using a two-way random effects GLS regression and also a Tobit model. Our findings suggest that while some of the structural and regulatory factors have an undesirable impact on airline performance, the low cost carriers in India have managed to achieve significant operational efficiencies. In addition, we find that, while cost efficiency is driven by a variety of factors, it is the technical efficiency which brings in better market performance through pricing power in the Indian airline industry.

6. Conclusions and managerial implications

Our empirical findings from the two-stage analysis have significant implications for airlines operating in India currently, as well as for future aspirants. There is intense competition in the industry, which is further exacerbated by the additional capacity being added by the current players and new entrants. Currently, 63% of the domestic passengers fly by LCCs, and even the remaining 27% flying by FSAs pay similar fares as LCCs (at times even lower), due to price wars and very little distinction between the services offered by LCCs and FSAs. Therefore, it is safe to assume that the Indian airline industry is characterized mainly as a low cost industry. However, the cost structure of FSAs is much higher than that of LCCs27, resulting in huge losses for almost all FSAs and even for most LCCs (except for Indigo airlines) during the past several years. In an industry such as this, where loss-making is a norm and any profits by an airline are reported as front page news28, one has to be extra cautious in understanding the various linkages between drivers of performance, both operational and financial. Since India is considered to be one of the most cost conscious29 countries to operate in, whether it is automobile market or airline services, one has to pay special attention to costs and operational efficiencies, as there is very little scope to manoeuvre on the price front.

Our empirical study findings therefore provide important pointers to senior executives who are carefully scanning the Indian skies for a possible entry into this highly competitive but coveted market, mainly due to its huge population and large potential for growth. One of the critical findings from our study is the fact that technical efficiency is not just required to manage operations more efficiently and to cut-down on costs; it is also needed to gain market power. Our results indicate that airlines that have higher technical efficiencies are able to charge price premiums, as they are able to offer services that are highly valued by customers. Although this seems intuitive, the efficiency related studies mainly focus on the cost side of operations and very rarely identify the linkages with market dynamics. While our analysis finds various drivers of cost efficiency, technical efficiency seems to be the determinant of future pricing power in the Indian airline industry