Modeling Organizational Performance: Differentiating Factors in Economic Periods Prior, During, and Post Recession

Since the Airline Deregulation Act of 1978, US airlines have been facing increasing pressure to reduce fares while competing in areas such as passenger comfort and amenities. In a highly volatile industry ruled by economic factors, this research intends to examine the health and status of the American economy, and its implications on the airline industry as a whole. More specifically, airline performance during economic recessions will be compared to performance during times of expansion or growth. Taking airline passenger perception into account, this model will investigate how airline operations during a recession combine with passenger perceptions to determine if the airlines are meeting or exceeding the traveling public’s expectations. Directly, this investigation looks to examine the impact of the United State’s economy (prior, during and post recession) on US air carriers. Methodology will include intensive case study to determine recessionary periods in comparison to trending Airline Quality Rating (AQR) data for a select group of airlines representative of the industry. Particularly, this research will focus on three US carriers: Continental (legacy), AirTran (low-budget) and SkyWest (regional). Benchmarked expansion periods between 2003 and 2010 will be pitted against airline performance during and after economic downturns