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Sustainability 2016, 8(11), 1204; doi:10.3390/su8111204

Airline Sustainability Modeling: A New Framework with Application of Bayesian Structural Equation Modeling

1
Department of Science and Technology Studies, University of Malaya, Kuala Lumpur 50603, Malaysia
2
Department of Civil & Structural Engineering, Universiti Kebangsaan Malaysia, Kampung Bangi 43600, Malaysia
3
Department of Media Management, Faculty of Management, University of Tehran, Tehran141556311, Iran
4
Department of Corporate Entrepreneurship, University of Tehran, Tehran1439813141, Iran
*
Author to whom correspondence should be addressed.
Academic Editor: Marc A. Rosen
Received: 20 July 2016 / Revised: 11 November 2016 / Accepted: 13 November 2016 / Published: 22 November 2016
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Abstract

There are many factors which could influence the sustainability of airlines. The main purpose of this study is to introduce a framework for a financial sustainability index and model it based on structural equation modeling (SEM) with maximum likelihood and Bayesian predictors. The introduced framework includes economic performance, operational performance, cost performance, and financial performance. Based on both Bayesian SEM (Bayesian-SEM) and Classical SEM (Classical-SEM), it was found that economic performance with both operational performance and cost performance are significantly related to the financial performance index. The four mathematical indices employed are root mean square error, coefficient of determination, mean absolute error, and mean absolute percentage error to compare the efficiency of Bayesian-SEM and Classical-SEM in predicting the airline financial performance. The outputs confirmed that the framework with Bayesian prediction delivered a good fit with the data, although the framework predicted with a Classical-SEM approach did not prepare a well-fitting model. The reasons for this discrepancy between Classical and Bayesian predictions, as well as the potential advantages and caveats with the application of Bayesian approach in airline sustainability studies, are debated. View Full-Text
Keywords: airline performance index; Bayesian structural equation modeling; cost function; Gibbs sampler; airline sustainability airline performance index; Bayesian structural equation modeling; cost function; Gibbs sampler; airline sustainability
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MDPI and ACS Style

Salarzadeh Jenatabadi, H.; Babashamsi, P.; Khajeheian, D.; Seyyed Amiri, N. Airline Sustainability Modeling: A New Framework with Application of Bayesian Structural Equation Modeling. Sustainability 2016, 8, 1204.

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