PASSENGER AND FREIGHT REVENUE YIELD FORECASTING

The review of the historical trends in scheduled domestic airline passenger and freight revenue yields, is informative in two respects. Not only is a basis provided for the short and intermediate term forecasting of yields, passenger and freight miles and revenues, but so too is an evaluation criterion provided for gauging the effects of past regulatory efforts as well as the implications of the current proposals for airline deregulation. Knowledge of the cost structure and its allocation is also necessary for the translation of this yield history to a record of profit and rate of return levels, which in turn, have directly influenced capital financing and fleet investment levels. In addition, an analysis of the market demand, structure and growth factors characterizing the domestic airlines' operating environment is essential to gauge the potential effects of deregulation upon the fare structure, revenues, scheduling policy and flight frequencies, operating expenses and yields. It is in this context that a forecasting framework for passenger and freight revenues, miles and yields will be advanced, including the determinants of the model's functional form, namely the market maturity-growth prospects and the regulatory environment. An initial discussion of the dominant economic factors within the airline industry with a significant impact upon revenue, yield and profit levels will supplement the forecast model development, referencing such factors as the kinked-demand curve, price discrimination and entry-limiting pricing as an entry barrier, as well as their trends under deregulation. /Author/

  • Corporate Authors:

    Wallace Research Cen, Embry-Riddle Aeronautl Univ

    Regional Airport
    Daytona Beach, FL  USA  32014
  • Publication Date: 1978-8

Media Info

  • Features: Figures; References; Tables;
  • Pagination: p. 31-37
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00196334
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 15 1979 12:00AM