ASSIGNMENT

The dataset contains monthly information on total passenger volume and employee numbers for two airlines. The first, Airline 1, is a major airline (defined as having over $1 billion annual operating revenue). The second, Airline 2, is a US national airline (defined as one with over $100 million to $1 billion annual operating revenue). The data spans the period from 2000 January to 2011 August.

Please refer to the Excel data file that is provided for this assignment.

In the dataset, YEAR and MONTH are self-explanatory date variables. DOMESTIC_1 and INTERNATIONAL_1 refer to domestic and international passenger volumes for Airline 1, while FT_1 and PT_1 refer to full-time and part-time employees for Airline 1. Similar naming applies to the variables for Airline 2.

Question 1

Create variables for monthly total passenger volume and monthly total employee numbers in Airline 1. Do the same for Airline 2. Plot the pair of variables for each airline on a scatter diagram and explain the similarities and differences between the two plots. (Hint: Check your new variables to ensure you have not missed observations. In particular, note that some software ignore missing values when carrying out transformations). (12 marks)

Question 2

Using an appropriate technique, test if the variance of total passenger volume differs significantly between the two airlines. State the null and alternative hypotheses for your test and explain the outcome. Repeat the test for the equality of the variances of employee numbers.

Interpret the results of the tests. By referring to your experience with the aviation or related industries, explain the similarity or difference in the outcomes. (14 marks)

Question 3

1. Model the relationship between total passengers and total number of employees. Interpret the estimated coefficients, and explain whether the model can provide a reliable depiction of the way the aviation industry operates? (12 marks)
2. Create new indicator variables to represent the calendar months of a year. To indicate the month of January, for instance, such a variable, call it MTH01, should take the value 1 for an observation that corresponds to January, and zero for observations which correspond to all other months of the year.
   (Hint: In SPSS, you can use the TRANSFORM>RECODE INTO DIFFERENT VARIABLE option to create new monthly indicators.) (4 marks)
3. Augment the models from part (a) by adding the monthly indicator variables (also called dummy variables). Are there any patterns in the estimated indicator variables? Compare the seasonal cycles of the two airlines, and explain if they think appear similar.

(Note: There is no need to discuss the analysis of the specific estimation output in detail for the two cases. Focus on the comparison of the new results with those of Question 3(b), as well as between the two airlines in these new estimates.) (8 marks)

Question 4

In about 200 +/- 10% words, provide an executive summary to the management of either one of the airline companies depicted in this assignment your findings. You should explain your interpretation of the analysis and highlight any other considerations. (15 marks)

Price: $23.87

Solution: The downloadable solution consists of 10 pages, 1387 words and 13 charts.
Deliverable: Word Document