How should Airlines Structure? A Comparison of Low Cost and Legacy Carriers
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Date: 11-15-2007
Start Time:
1:00pm
End Time: 2:00pm
Speaker: Sunil Chopra, Kellogg School of Management
Location: Uris 333
ABSTRACT
This paper compares the financial performance of low cost carriers and legacy carriers in the airline industry between 1994 and 2004 with the objective of identifying key operational factors that drive financial performance. Our analysis identifies two sets of operational factors – one set that drives costs and the other that drives revenues. Historically, low cost carriers have performed better on the cost related factors, whereas legacy carriers have performed better on revenue related factors. Our goal is to link these factors to the operating structure of airlines to see which factors can provide a sustainable advantage to either type of airline. These linkages offer some insight into how airlines should try to structure and where their competitive advantage may lie.
BIO
Sunil Chopra is the IBM Distinguished Professor of Operations
Management at the Kellogg Graduate School of Management. He is also the
Senior Associate Dean for Curriculum and Teaching at Kellogg. He became
a faculty of the school in 1989. Previously he was an Assistant
Professor at the Stern School of Business Administration at New York
University. He has a PhD in Operations Research from SUNY Stony Brook.
Professor Chopra’s research and teaching interests are in Operations
Management, Logistics and Distribution Management, design of
communication networks and design of distribution networks. He has
co-authored the books Managing Business Process Flows and Supply Chain
Management: Strategy, Planning, and Operation. Both books are published
by Prentice Hall and are used at several of the top business schools to
teach Operations Management and Supply Chain Management respectively.
The Supply Chain Management book was awarded the best book of the year
for 2001 by the Institute of Industrial Engineers (IIE). Professor
Chopra has won several teaching awards at Kellogg.
He has been Departmental Editor for the journals Management Science and
an Associate Editor for the Decision Sciences Journal, Manufacturing
& Service Operations Management and Operations Research. His recent
research has focused on risk management in supply chains. He has also
studied distribution systems in a variety of companies trying to
identify market, manufacturing, and product characteristics that drive
the structure of a supply chain. He has studied the impact of
e-business on supply chain performance in different industries and is
currently looking at supply chain risk.
He has consulted for a variety of firms including Boise Cascade Office
Products, GE Capital, W.W. Grainger, Motorola, Intel, and Sara Lee.