The Effects of Sales Changes on Resource Utilisation in the Airline Industry

Abstract

We investigate how sales changes affect resource utilisation across operating strategies by examining how full-time and part-time employment change with increases and decreases in sales for full-service carriers (FSCs) and low-cost carriers (LCCs). We componentise sales into capacity provided (available seat miles or ASM), capacity used (average load) and selling price. We predict and find that LCCs increase full-time labour utilisation more (exhibit resource strain) than FSCs when sales increase and that FSCs decrease full-time labour utilisation more (exhibit resource slack) than LCCs when sales decrease. LCCs, on the other hand, retain more part-time labour when sales decrease.