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
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