Analysis of Civil Reserve Air Fleet Participation

<p>Organizational slack is the cushion of actual or potential resources that allows an organization to adapt to internal or external pressures. Slack resources can come in many forms such as excess capacity and unused capital. Commercial airlines possess slack in the form of excess capacity also known as load factor. Due to the increasing pressures to reduce costs and eliminate excess capacity the commercial carriers constant try to increase their load factors to a breakeven point. One method air carriers use to reach this breakeven point is by participating in the Civil Reserve Air Fleet (CRAF) program. By participating commercial carriers are eligible for a portion of the $2 billion dollars in annual Department of Defense business and have access to a revenue stream to augment their commercial business and manage slack resources. The purpose of this study was to examine which factors have the greatest influence on CRAF participation. Due to the volatile nature of the airline industry we examined the roles of organizational slack financial health and U.S. economic conditions in CRAF participation. After conducting linear regression of the data at least two conclusions can be derived from these results: First the economic conditions that the commercial carriers are experiencing have little bearing on the CRAF participation. Second the results indicate that the large passenger and integrated cargo carriers are the least likely carriers to want to participate in CRAF. The empirical evidence shows that CRAF participation is driven more by the carrier size financial health of the carrier and the carrier type. These results have significant implications for policy changes in the CRAF program. Maintaining a viable incentive program is vital to the long term success of the CRAF program.</p><p>This work has been selected by scholars as being culturally important and is part of the knowledge base of civilization as we know it. This work was reproduced from the original artifact and remains as true to the original work as possible. Therefore you will see the original copyright references library stamps (as most of these works have been housed in our most important libraries around the world) and other notations in the work.</p><p>This work is in the public domain in the United States of America and possibly other nations. Within the United States you may freely copy and distribute this work as no entity (individual or corporate) has a copyright on the body of the work.</p><p>As a reproduction of a historical artifact this work may contain missing or blurred pages poor pictures errant marks etc. Scholars believe and we concur that this work is important enough to be preserved reproduced and made generally available to the public. We appreciate your support of the preservation process and thank you for being an important part of keeping this knowledge alive and relevant.</p>