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Date of Award

Spring 2001

Document Type

Thesis - Open Access

Degree Name

Master of Business Administration in Aviation

Department

Business Administration

Committee Chair

Dr. Robert N. McGrath

Committee Member

Dr. Vahindran Rao

Committee Member

Dr. Saad Laraqui

Abstract

By combining cargo and passenger operations under the same business, airlines are facing an operational conflict with respect to the cargo operation, which has always been perceived as a by-product and not as an essential revenue generating activity; This fact leads to poor product quality, weak revenues, and value deterioration. By dedicating time and resources to the cargo operation in a different business unit with a defined strategy, carriers may increase cargo profitability and achieve superior operational results.

The purpose of this study is to identify and explain the benefits for passenger airlines to invest in air-cargo operations by defining a clear strategy and creating a separate business unit. Through developing a concept-based decision model the study explains why it makes sense to dedicate time and resources (invest) implementing a strategy for cargo operations. The outcome of this investigation will serve as a decision support tool for those airlines that are evaluating whether or not to invest in developing further their current cargo operations.

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