10/01/2023
Speaker: Milind Sohoni
Professor of Operations Management
Indian School of Business (ISB)
Abstract:
Airlines showcase their on-time performance (OTP), a globally accepted operational performance metric, to demonstrate punctuality, service reliability, and attract air travelers. Airlines adopt passive strategies, such as ``schedule padding," and active processes, such as making operational improvements, to improve their OTP. Also, factors outside an airline's control, such as unexpected bad weather, cause the actual observed performance to deviate from the planned execution. Hence, in addition to schedule padding and operational improvement, we define a third factor called ``retrospective luck", i.e., the difference between the actual realization and the expected outcome. This paper develops a framework to study the impact of these three factors on the OTP of airlines and also quantifies the impact of these three factors. Additionally, we study the effect of these strategies on OTP {\em rankings}, routinely used to compare airlines operating in common geographies (\cm{we have to change this -- we are not comparing rankings in common geographies, we are comparing them irrespective of the routes they fly}). Our methodology builds on the structural estimation model developed in prior literature and replicates the typical schedule planning process observed in the airline industry. We use an eleven-year panel data of flights operated by the US domestic carriers from 2005 to 2015 to measure OTP changes, schedule padding, and operational improvements. \cm{The most important result of our analysis is that operational improvements have the highest association with both the change in OTP and OTP rankings of airlines, followed by schedule buffer adjustments; the impact of network changes on OTP and OTP rankings is the lowest. Our results also indicate that active actions taken by airlines could have a higher impact than passive strategies.
About the Speaker:
Dr. Milind Sohoni is a Professor of Operations Management (OM) at the Indian School of Business (ISB). His other academic appointments include visiting positions at the Kellogg School of Management, Northwestern University. He has been a visiting scholar at the Krannert School of Management, Purdue University, and the Stern School of Business at New York University.
Professor Sohoni’s research broadly spans four interconnected areas: (i) mobility, platform operations, and revenue management, (ii) transportation and logistics, (iii) information sharing, competition, and incentives in supply chain management, and (iv) non-profit and developmental/sustainable operations. His research is motivated by practice and uses data from the industry. He use analytical and empirical modeling tools, game theoretic analysis, large-scale computational optimization, and data-driven methods in his research. Some of his research insights, algorithms, and solutions have been implemented in practice to improve operational outcomes for firms. Governmental agencies and policymakers have also quoted some of his work. He has published several research articles in top-tier academic journals. He serves as an editor/associate editor for leading, top-tier academic journals in operations management.
Professor Sohoni has several years of corporate experience in consulting and research. Before joining ISB, he was a research advisor with the R&D group at Delta Technology, a wholly-owned subsidiary of Delta Air Lines, Atlanta, GA. Before that, he worked with the Advanced Decision Support Systems group at AT&T Bell Labs in Holmdel, New Jersey, and Ryder Dedicated Logistics, Miami, Florida.
