Economics and Finance

Integrated Air Freight Cost Structure: The Case of Federal Express

Kiesling, Max K.
Hansen, Mark
1993

This paper analyzes the economic structure of the integrated air freight industry. We evaluate a total cost model for Federal Express, Inc. by analyzing quarterly time-series data from 1986-1992. We find that Federal Express, and arguably all dedicated air freight carriers, exhibit diseconomies of scale and significant economies of density. We show that these two economic concepts can be restrictive, however, and introduce a third aspect of the integrated air freight industry’s economic structure that combines the effects of economies of density and economies of scale. We call it economies...

Predictability Evaluation Based on Gate-In Fuel Prediction and Cost-to-Carry Estimation

Kang, Lei
Hansen, Mark
Ryerson, Megan
2016

Aviation system predictability has recently gained popularity among air navigation service providers and academic researchers. To better understand how to measure predictability and how to assess the potential benefit of enhanced predictability, the authors propose a new predictability metric based on flight gate-in fuel (GIF). The GIF can indicate the impact of predictability on airlines. A GIF prediction model was first developed using a comprehensive flight level fuel uplift and consumption dataset provided by a U.S.-based airline. Then, available FAA data were merged in the process and...

Econometric Analysis of U.S. Airline Flight Delays with Time-of-Day Effects

Hsiao, Chieh-Yu
Hansen, Mark
2006
An econometric model of average daily delay is formulated and estimated to analyze flight delay in the U.S. domestic system. The model considers the effects of arrival queuing, volume, terminal weather, en route weather, seasonal effects, and secular effects. In particular, the time-of-day effects of arrival queuing, the effects of scheduled arrivals, and the interaction between scheduled arrivals and weather conditions are investigated. The estimation results suggest that (a) queuing has a greater delay impact in the morning than in the afternoon or evening (one unit of morning queuing delay...

Multivariate Analysis of the Impacts of NAS Investments: A Case Study of a Major Capacity Expansion at Dallas-Fort Worth Airport

Hansen, Mark M.
Wei, Wenbin
1998

This paper presents a case study of how to empirically estimate the impact of a NAS investment on system performance. We employ multivariate statistical analysis to estimate the impacts of a major capacity expansion at DFW airport.

Hubbing and Airline Costs

Hansen, Mark
Kanafani, Adib
1989
Airline hubbing can be viewed as a strategy to increase airline network efficiency and to reduce operating costs. Alternatively, hubbing can be viewed as a marketing strategy permitting airlines to achieve dominant market shares at their hub airports and to take advantage of market preferences for the increased frequancies that the strategy permits. This study inquires into the hypothesis that significant cost reductions can be achieved by hubbing. Using a detailed cost analysis of 13 airlines with different degrees of hubbing over the period 1976‐1984, we find no evidence of a relation...

Going South?

Hansen, Mark
Hsiao, Chieh Yu
2005
The recent increase in flight delays in the U.S. domestic system is analyzed by estimating an econometric model of average daily delay that incorporates the effects of arrival queuing, convective weather, terminal weather conditions, seasonal effects, and secular effects (trends in delays not accounted for by other variables). From the estimation results it was possible to quantify some sources of higher delays in late 2003 and early 2004 and track changes in delays that are not attributable to major causal factors. Results suggest that when these factors are controlled for, delays decreased...

Freeway Expansion and Land Development: An Empirical Analysis of Transportation Corridors

Hansen, Mark
Gillen, David
Puvathingal, Mohnish
2001

Road transport infrastructure can, together with other factors, influence location choices and decisions involving residential, commercial, and industrial development. The network of roads and highways provides a means for access for workers and materials as well as a way for distributing products and services. Greater access lowers the costs of transportation and therefore increases the supply of many resources, including land, labor, and materials. An investment in highway infrastructure can have a variety of land use impacts, depending upon which of the above factors have been affected...

Assessing the Impact of Aviation System Performance by Using Airline Cost Functions

Hansen, Mark
Gillen, David
2000
The manner in which changes in the performance of the U.S. National Airspace System (NAS) affect carrier costs is examined. The methodology includes estimation of airline cost functions that contain NAS performance metrics as arguments, using quarterly data for 10 U.S. domestic airlines. The primary interest is in the impact of delay on cost performance, and performance metrics that vary by airline and quarter are developed. The potentially large number of metrics are reduced by applying factor analysis to seven underlying variables, including average delay, delay variance, and the proportion...

Capital in Flight: Japanese Investment and Japanese Air Service in the United States During the 1980s

1991

The relationship between Japanese air service to the US and Japanese direct investment in the US during the 1980s is examined. It is argued that regions receiving more air service to Japan could receive more direct investment because greater accessibility to Japan facilitates freight and passenger transport between the 2 countries and that flights between the US and Japan generate flows of information that create greater awareness of investment opportunities on the part of Japanese investors. The hypotheses are tested independently using a pooled, cross-sectional data set consisting of the...

Mobile Phone Location Data for Disasters: A Review from Natural Hazards and Epidemics

Yabe, Takahiro
Jones, Nicholas K. W.
Rao, P. Suresh C.
Gonzalez, Marta C.
Ukkusuri, Satish V.
2022

Rapid urbanization and climate change trends, intertwined with complex interactions of various social, economic, and political factors, have resulted in an increase in the frequency and intensity of disaster events. While regions around the world face urgent demands to prepare for, respond to, and to recover from such disasters, large-scale location data collected from mobile phone devices have opened up novel approaches to tackle these challenges. Mobile phone location data have enabled us to observe, estimate, and model human mobility dynamics at an unprecedented spatio-temporal...