ECONOMIC IMPACT OF SAFETY ON AIRLINE PROFITABILITY

다국어 초록 (Multilingual Abstract)

ABSTRACT
ECONOMIC IMPACT OF SAFETY ON AIRLINE PROFITABILITY
PETER MWEBESA
Global Aviation Policy Program
The Graduate School
Korea Aerospace University
(Supervisor: Professor Sanghyun Kim, PhD)
Core Problem: While airline safety is universally recognized as an operational imperative, its direct and indirect economic impacts on profitability are not fully understood. A significant research gap exists in empirically examining how safety influences the bottom line through key financial and behavioral pathways like accident compensation and customer loyalty.
Primary Objective: To examine the economic impact of airline safety on airline profitability, specifically by investigating the mediating roles of accident compensation and customer trust & loyalty, and the moderating role of safety investment.
Methodology: The research employed a qualitative, multiple case study design, analyzing secondary data from seven major aviation entities, Ethiopian Airlines, Ryanair, Boeing, Malaysia Airlines, Qantas, Emirates, and Korean Air, from 2010 to 2025. Data from annual reports, safety documents, and industry publications were analyzed using thematic analysis to explore the proposed relationships.

목차 (Table of Contents)

• CHAPTER ONE: INTRODUCTION 1
• 1.1 Background of the Study 1
• 1.2 Research Problem statement 1
• 1.3 Research Objectives 2
• 1.4 Research Questions 3
• 1.5 Significance of the Study 3
• 1.6 Research Gap 4
• CHAPTER TWO: LITERATURE REVIEW 5
• 2.1 Understanding and Conceptualizing Airline Safety in the Modern Aviation Context. 5
• 2.2 Assessing the Relationship Between Airline Safety, Accident Payouts, and Profitability. 10
• 2.3 Airline Safety as a Determinant of Customer Trust, Loyalty, and Financial Performance 14
• 2.4 Airline Safety Investment as a Catalyst for Enhanced Profitability 19
• CHAPTER THREE: THEORETICAL FRAMEWORKS. 23
• 3.1. Resource-Based View (RBV) Theory 23
• 3.2. Stakeholder Theory 24
• 3.3. Signaling Theory 24
• CHAPTER FOUR: RESEARCH MODEL AND HYPOTHESES 26
• 4.1. Independent Variable: Airline Safety 26
• 4.2. Mediating Variables 26
• 4.3. Moderating Variable: Investment in Safety Promotion 26
• 4.4 Dependent Variable: Airline Profitability 27
• 4.5 Research Hypotheses 28
• CHAPTER FIVE: RESEARCH DESIGN AND METHODOLOGY 31
• 5.1 Case Selection and Population. 32
• 5.2 Data Collection Methods 32
• 5.3 Data Analysis Techniques: 33
• 5.4 Variables and Conceptual Linkages (Qualitative Perspective) 33
• 5.5 Ethical Considerations 34
• CHAPTER SIX: RESULTS AND DISCUSSION 36
• 6.1 Case Study 1: Ethiopian Airlines and the Economic Impact of Safety on Profitability 36
• 6.2 Case Study 2: Ryanair Holdings plc and the Economic Impact of Safety on Airline Profitability 40
• 6.3 Case Study 3: Boeing Company and the Economic Impact of Safety on Profitability 43
• 6.3.1 Harvard Law Corporate Governance Forum 44
• 6.4 Case Study 4: Malaysia Aviation Group and the Economic Impact of Safety on Airline Profitability. 47
• 6.5 Case Study 5: Qantas Airways and the Economic Impact of Safety on Airline Profitability. 50
• 6.6 Case Study 6: Qantas Airways and the Economic Impact of Safety on Airline Profitability. 53
• 6.7 Case Study 7: Korean Air and the Economic Impact of Safety on Airline Profitability. 56
• 6.8 Summary of case Studies. 59
• CHAPTER SEVEN: CONCLUSION 60
• 7.1 Discussion 60
• 7.2 Recommendations 61
• 7.3 Limitations of the Study 62
• REFERENCES 64
• APENDICES 71