Abstract Title

Creating a Multi-Factor Index to Model Performance in the U.S. Airline Industry

Faculty Mentor Name

Jacqueline Luedtke and Brent Bowen

Format Preference

Poster

Abstract

The Airline Quality Rating (AQR) is a formula first created in 1991 used to measure operational performance of domestic airlines in the aviation industry to produce an index. The AQR was designed by developing a formula that compiles factors the traveling public views as most critical to an airline’s performance, including baggage handling, customer complaints, denied boarding and on-time arrivals. With this weighted average, an index measuring operational performance has been created. When all criteria, weights and impacts are combined for an airline over the year, a single interval scaled value is obtained. This value is comparable across airlines and time periods. This formula is employed and computed on a monthly basis using mandatory reporting data from the Department of Transportation. A panel of experts was used to conduct research to produce the weighted average and continues to authenticate the validity of the index every few years to ensure reliability. This approach can produce reliable outcomes through the use of objective data and the continuous analysis of the industry. Airline Quality Rating reports are released consistently every year for 25 years and the technique to create the index is repeatable. Airlines are able to utilize this data to employ strategies, and consumers are able to analyze the movement of the airline market place.

Poster Presentation

IGNITE GRANT AWARD

Location

AC1-ATRIUM

Start Date

4-8-2016 1:00 PM

End Date

4-8-2016 3:00 PM

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Apr 8th, 1:00 PM Apr 8th, 3:00 PM

Creating a Multi-Factor Index to Model Performance in the U.S. Airline Industry

AC1-ATRIUM

The Airline Quality Rating (AQR) is a formula first created in 1991 used to measure operational performance of domestic airlines in the aviation industry to produce an index. The AQR was designed by developing a formula that compiles factors the traveling public views as most critical to an airline’s performance, including baggage handling, customer complaints, denied boarding and on-time arrivals. With this weighted average, an index measuring operational performance has been created. When all criteria, weights and impacts are combined for an airline over the year, a single interval scaled value is obtained. This value is comparable across airlines and time periods. This formula is employed and computed on a monthly basis using mandatory reporting data from the Department of Transportation. A panel of experts was used to conduct research to produce the weighted average and continues to authenticate the validity of the index every few years to ensure reliability. This approach can produce reliable outcomes through the use of objective data and the continuous analysis of the industry. Airline Quality Rating reports are released consistently every year for 25 years and the technique to create the index is repeatable. Airlines are able to utilize this data to employ strategies, and consumers are able to analyze the movement of the airline market place.

Poster Presentation

IGNITE GRANT AWARD