Air Freight
The main aspect that limits the frequency of air freight in developing nations is the inadequacy of considerable volumes of two-way movement. The enhancement of air freight necessitates landlocked countries to reinforce activities at airports and open access for foreign airplanes. The volume of air freight is mainly restrained by high cost, which is characteristically more than ten times that of sea transport and fivefold that of road shipment. This paper presents current research progress in the area of air freight, especially with respect to historical standpoint, industry conditions, and major inclinations. The key exports transported by air from developing nations are flowers, vegetables, fruits, and electronic components. Imports into such nations usually encompass high-value consumer products. Devoid of a noteworthy outbound flow, inbound air freight costs are high hence decreasing varieties and quantities of commodities transported by air.
Budd and Ison (2017) assert that in 2014, more than 50 million tonnes of cargo worth over six trillion US dollars were transported across the globe. About 56% of the total cargo was transported on devoted freighter airplanes either made particularly for this purpose or switched from passenger use. The remainder, 44% of the cargo, was transported on airplanes that carry both passengers and goods. Even if both forms provide similar fundamental service, air freight of time responsive and soaring value-to-weight products, they demonstrate varying cost arrangements, functioning attributes, and spatial instances of supply and demand. This study employs empirical data on the current scope and level of international freighter functions. It assesses the task of dedicated freighter airplanes in the conveyance of international air freight services while establishing a scale of exogenous and interior aspects that might influence demand and supply attributes of all-cargo air services in the future. Budd and Ison (2017) highlight a rising trend, in addition to future challenges, of air freight services.
Alexander and Merkert (2017) recognize regional financial aspects that impinge on the force of attraction for all air freight destinations. Having two of the most engaged air traffic routes internationally, Sydney-Brisbane and Sydney-Melbourne, alongside liberal open skies arrangements, and the most secluded big city in Perth, Australia’s air freight ought to be set for considerable growth, but has in contradiction of other places such as the United States not yet materialized. In their study, Alexander and Merkert (2017) examine problems facing internal air freight regions in Australia and evaluate transportation by air against road freight with the help of gravity modeling techniques. The findings of the study imply that challenges to effective internal air freight services in the country are higher for all regions between basic cities (for example, Canberra that lies between Melbourne and Sydney) than for the ones in remote places (for instance, Cairns). Existing models further establish that over and above distance, air freight capability on all the assessed sections regardless of being demand-pulled with regard to GDP dependence considerably adjusted to different aspects at both the origin (particularly internal trade competence such as logistics and manufacturing) and location.
The spatial attention of freighter functions has augmented during the last decade. In their article, Boonekamp and Burghouwt (2017) establish an air transport connectivity pattern for all freights. In the study, connectivity is identified as every achievable direct and indirect link to and fro an airfield used by wide-body airplanes. The researchers weigh connectivity for the excellence of the linkage concerning in-flight durations and transshipment. With the application of the connectivity model, the researchers assess systems of seven airports in Europe. The biggest airports in Europe convey the majority of air freights attributable to widespread global passenger systems while small airports have a powerful concentration on cargo transport large quantities on committed aircraft. With regard to air freight functions, the catchment section of airports is bigger than that of passenger services since consignments are conveyed to their departure area all through mainland Europe. As numerous airports share a similar catchment section, possible rivalry for air freight is severe. It was established that excellently positioned regions among four of the biggest airports in Europe can access large freight complexes while local connectivity in areas to the South and North of Europe is significantly lower.
Multimodal transportation acts as a vital element of the modern logistics network, particularly for long-distance intercontinental coverage. Ha, Yang and Heo (2017) explore the different alternative directions for laptop exports from China to Holland. In their study, the researchers choose seven possible courses for laptop conveyance from Chongqing to their destination in Rotterdam. The multimodal approach was embraced to illustrate different paths with the help of numerous aspects such as the cost of transport, transfer outlay, transmission period, distance covered, charges entailed, additional expenses for port jamming, customs charge, and confidence indicator among others. Out of the different possible courses, the findings of the study show that route 7 (air freight) was the fastest means of transportation, followed by route 6 (railway transport), whereas route 1 (water transport) proved to be the cheapest and most untroubled. Nevertheless, inland water-maritime transportation represented by route 1 might not be appropriate for laptop shipment attributable to the significance of aptness. It is apparent that logisticians have the capacity to use the findings of the study to achieve a sense of balance between transit time and entailed costs for the successful multimodal conveyance of laptops from Chongqing, China, to Rotterdam, in the Netherlands. Airfreight presents an unparalleled advantage for the transportation of laptops in bulk thanks to speedy delivery.
The rise in international fiscal connectivity stimulated by links involving Chinese manufacturing and the international market, especially in high worth, low weight products, resulted in the preference of air cargo arrangements. Airfreight networks remain under-evaluated but effective especially for second and third level metropolitan hub cities. Walcott and Fan (2017) aimed at evaluating the air freight linkages within China, a crucial and quickly developing trading center, and application of the aerotropolis notion to hasten growth in the dawdling inland area. The researchers refer to UPS and FedEx operations with the United States business region, in addition to China, to evaluate existing disparities in political financial establishments and adaptation of thriving global models. The undertaken theoretical framework encompasses international production systems tactically joined by transport management associated with the aerotropolis form of development. Data were obtained from public aviation and shipping sources, the examination of a wide pool of studies, organizational and industrial statements, and dialogues with Chinese representatives. The major focus of Walcott and Fan (2017) was on Zhengzhou, a major town in Henan Province of China, as well as the nation’s first airport-centered fiscal region. They found that hub cities in china strongly characterize vital industrialized and population centers, in addition to central strategy guidelines for development distribution.
Even if airports play a significant function in the European and international economies, consistent with the new directives of the government on the newly established regulations for an aggressive aviation sector, it will be difficult for unbeneficial airports to acquire public monetary grants in the future. The EU Commission noted that most of the local airports encounter severe challenges in covering their operative outlays, emanating from other practices such as overlapping of catchment regions of airfields. The study affirms that policies should be implemented to ensure that the most inefficient airports are closed. The major aim of the measures listed by Beifert (2016) is not to shut local airports, but to encourage them to function on cost-effective, lucrative, and more flexible foundations. To triumph over the present problems, local airports should re-evaluate their future developmental goals. In the past, air freight encompassing small and local airports concentrated on passenger traffic. However, with globalization and the commencement of international markets, the likely gains and prospects of air cargo cannot be undervalued. However, many local airports in the Baltic Sea area operate fully secluded and do not benefit from present conditions on the global air cargo market, cannot understand its future viewpoints, and sustainable development strategies are essentially concealed. There is a need to increase political and public awareness of the road feeder service perception and its benefit in the global logistics network since it can be effectively employed in the EU and Baltic Sea Region transport strategies and developmental tactics for enhanced success.
Most of the major airports around the world have a direct connection to other airfields worldwide devoid of intermediate directions. Such connectivity may be portrayed as the network where airports operate as the node and the course turns out to be a linking corridor (Song & Yeo, 2017). This study evaluates air transport systems of more than 1,000 airports with the help of the social network analysis technique. The researchers merged data from three airline connections and created a system of airports and over 5,500 routes in 170 nations. Numerous previous studies on air transport networks evaluated different airports or places precisely and mostly employed the internal pointers of airports. On the contrary, Song and Yeo (2017) carried out an extensive assessment of 170 nations with the help of air routes, an external pointer of airports. Their article presented the general attribute of major nations and destinations from the viewpoint of social network analysis and provided a comparison of individual systems of China and the US that have the highest influence on global air logistics within the scale of the full network study. The article helps in the comprehension of air transport systems and progressions of connectivity in inter-region and country practices.
Apart from passenger flights, air cargo operations have become significant and profitable endeavors for the international air transport sector. This signifies that air cargo management activities are crucial for airport practices and officials who offer essential services (Drljača, Štimac, Vidović, & Petar, 2020). To qualitatively address the air cargo handling process, particular requirements should be met; for instance, proficient cargo personnel, systems, consignment information network, infrastructure with sufficient capacity, and development management. The aim of the study by Drljača et al. (2020) was to examine the air cargo handling process and its intricate structure although in the framework of sustainability and security. The application of numerous scientific approaches of cognition enabled the researchers to study the organization of air cargo handling processes, safety, and environmental factors. The findings of the study underscore ecological and safety facets of the progression, which have a significant operation, in addition to an excellent scope of service that satisfies the needs of customers and facilitates the sustainability of the procedure. The study affirms that considerable effects of security and ecological factors are pertinent to endeavors in air cargo handling and influence the consistency and functionality of the entire process, its productivity, and its competitiveness. This underlines the necessity for perceiving air cargo handling in context and comprehending sustainability concerns and components.
External expenses have marked a vital concern in the previous years of transport operations. In European countries, this inclination is in proportion to the political readiness to interiorize externalities in transportation pricing strategies. Mostert and Limbourg (2016) carried out their study for two main objectives. One of the rationales behind the study was the identification of recent tasks carried out in the sector of external outlays of road and freight transport concerns. Other research works are examined with regard to their points of view (either project or academic-based), its objective (use, prescription, and projection), the form of externality (noise, unfortunate occurrences, congestion, climatic variation, air pollution), and nature of cost (for example, total or marginal). The study discloses the existing gap in the advancement of standard mathematical operations for underlying transportation expenditures. The second aim of the study is to emphasize the effectiveness of mathematical operations by establishing the major parameters that sway the success of freight transport with respect to external outlays, and determining the factor that ought to be integrated into further research endeavors.
The objective of the study by Tawfik and Limbourg (2018) was to mull over the subject of pricing determinations based on intermodal transportation as a topic of considerable impact on intermodality’s accomplishment and the shift towards ecologically friendly practices of enhancing the system. The authors highlight the situation of studies on cost from the operational research standpoint as an issue that has a crucial connection to energy utilization and sustainability evaluation. The researchers particularly studied air freight anchored in a revenue maximization view. Motivated by political enticements to reinforce its market perspective, Tawfik and Limbourg (2018) direct their research to the specific gap in optimization techniques that handle service costs as open strategic rationales from the carriers’ viewpoint. They recommend the application of the bilevel programming framework in air freight price establishment, in addition to the explanation of its broadly thriving utilization to comparable hierarchical decision plans. Numerous methods of articulating the conduct of shippers and the likelihood of intermodal transportation clients have been suggested alongside modeling propositions of varying probable objectives over and above multimodal network configurations.
Air-freight can occur in all the places that may be reached by aircraft. It is the quickest but the most expensive mode of transport when compared to transportation by other means such as rail or sea. Products that are transported by air are usually the ones that have a sensitive time of delivery and high worth. The delivery of products by aircraft guarantees safety and provides progressively high profitability for global freight transport. Regardless of its high cost, the capacity of air freight to react to pressing demands is well meaningful when it comes to long distances.
Air Cargo Market
Air cargo is a consistent, safe, and quick mode of transportation over long distances such as across international boundaries. It is a considerable component of globalization since it backs the international division of labor and facilitates the establishment of intricate and timely supply chains. In cargo markets where commodities are perishable, air transport is the quickest means of conveying products in reaction to customers’ inclinations and needs. Rising customer demands for electronics might be a different contributory aspect, propagated by an augment in purchasing power, particularly in several Asian markets. This paper presents recent research progress in the area of the developing air cargo market. With prospects of international marketing becoming a preference for air cargo increases as a means of ensuring enhanced processing speeds, higher efficiency, professional consumer services, timely delivery, and decreased costs.
Global air traffic is anticipated to rise considerably in the subsequent ten years and beyond. Linked to air traffic are enhanced programs to construct other airports for the expansion of current ones (Omondi & Kimutai, 2018). Implementation of such projects entails crucial endeavors to attain set goals and meet anticipations of different stakeholders devoid of compromising the outcome of the plan. Contribution to a project from its commencement to completion is vital to its success as the concerns of diverse stakeholders may be considered and incorporated into the finished scheme. Nonetheless, this may not essentially yield a jointly acceptable solution particularly when stakeholders’ interests are inconsistent and diverse. The fundamental principle of project management is that the views of all stakeholders will enhance the success level of every scheme by their provision of positive influence and insights. In their study, Omondi and Kimutai (2018) sought to assess the conflicts of stakeholders and their impact on the success of expansion schemes at Jomo Kenyatta International Airport. They established that stakeholders’ engagement in conflicts negatively affects the undertaking of expansion projects. The study suggested that the contribution of stakeholders in all phases of a project ought to be based on existing strategies, regulations, and performance assessment of the management to prevent looming complaints and qualms.
Ochola (2018) examined the effect of operational tactics on the effectiveness of air cargo handling schemes at Jomo Kenyatta International Airport. The researcher employed a probability sampling approach to obtain a sample of 97 participants from 129 personnel. The study assumed a descriptive nature to obtain data from all participants with the application of a structured questionnaire. Data gathered were analyzed with the help of quantitative data analysis methods encompassing inferential and descriptive statistics. Inferential statistics encompassed the application of bivariate correlation and linear regression model while the descriptive one, for example, proportion and frequency, acted as the foundation of the study. It was then analyzed via content appraisal and conveyed in a continuous prose structure. The impact of operational tactics on the success of air cargo management plans was obtained from the findings of the study. All operational tactics demonstrated a strong positive relationship with the effectiveness of air cargo management plans. The researcher found that quality management policies, procurement organization approach, cost administration techniques, and risk addressing methods sway the success of air cargo handling schemes in the order of statistical implication. Proposed recommendations include the need for airport authorities to create an air cargo risk management database, reinforce handling of air freight supply chain, uphold an extensive knowledge capacity of markets where it operates, and eliminate paper-anchored confirmation of documentation in support of digital resolutions.
Air cargo markets have obtained minimal focus in airport studies. In this study, Mayer (2016) categorizes 110 airports consistent with their cargo market attributes. Using successive cluster analysis, the article employs unlimited (cargo tonnage) and comparative measures (share of cargo workload components, transportation, and global consignment) to ascertain the dependence of diverse airport categories and classification of air freight. Eight diverse groups are presented to demonstrate vivid divergences in qualities of samples in terms of cargo operations. Geographic models of airports have been explained in the study. For instance, aspects that are exceptional to the regions typify European and North American airports. Places and airports that are heavily reliant on air cargo have the inclination of gaining from a central position within systems of freight airlines while other regions that have immense consignment volumes create them on account of noteworthy belly-ability of passenger aircraft. Comprehension of the heterogeneousness of cargo airports is paramount for future benchmarking lessons in the field.
With international technological and economic advancements continuing to restructure the air cargo market, expertise has improved successfully to diversify available services, modify progressions, and maximize the application of resources in proportion to digitization. An advancing peer-to-peer network enables the decentralization of computer-terminal contributors, known as the blockchain (Lim, 2018). This network reinforces the distributed ledger technology thereby facilitating real-time messages concerning exchange-and-confirmation, requests, and transactions between different members within the system devoid of the need for conventional go-betweens. This study aimed to generate and assign to the Dizistics concept in the application of blockchain technology, in addition to employing a fundamental model for the continued growth of the air cargo market and business flow. This will necessitate varying interaction with stakeholders, in addition to developing effective key-value, trust, and automatic transactions through the eradication of air freight forwarders and mediators in the sector. The findings of the study at the preliminary phase of the development concern the application of the Dizistics concept for the facilitation and enhancement of an improved air cargo business approach. Lim (2018) offers a broad comprehension overview of the way blockchain technology is utilized alongside the concept to influence numerous aspects of air cargo business practices. This is enabled by the decentralization of monetary and information dealings, peer-to-peer systems, successful contracts, and confidence in digital verification and instantaneous data exchange and procedures.
Hu, Lee, Chuang, and Chiu (2018) assert that in Taiwan, the air cargo market is currently a public franchise. Attributable to varying order and delivery approaches, the magnitude of cargo exports has gradually reduced in the recent past. This has led to intensified aggressiveness in the air cargo business. Earlier studies on the air cargo industry have mainly centered on workforce supply policies and business operations. The moment businesses seek continued growth and development; they strengthen the excellence of the service offered, uphold customer satisfaction, and improve competitiveness while ensuring the loyalty of consumers in a bid to support sustained progress and increased profitability. After reviewing the literature, Hu et al. (2018) undertake exploration and interviews with professionals to generate a formation anchored in theory and performance. The researchers create a structure for the excellence of the air cargo market with the application of the Decision-Making Trial and Evaluation Laboratory approach in conjunction with the Analytic Network Process. To ensure that the quality of service required by consumers is realized, numerous approaches should be employed to create a frame of reference for air cargo market operators.
In their study, Durak and Yılmaz (2016) affirm that the volume of the air cargo market has augmented twofold each decade from 1970. Such a trend is anticipated to keep rising by six percent each year over the next two decades. The rise in air cargo volume is attributable to the development of international trade. The researchers establish that the air cargo business has been developing at a quicker rate than global trade. With the fast development of the air cargo sector, passenger airlines are increasingly increasing their operations in this market. With regard to sustainability and rising competitiveness, the establishment of practices that mull over considerable rates of selective conditions is vital for airplanes venturing in air cargo transportation. The objective of the study by Durak and Yılmaz (2016) was to examine the criteria that influence the choice of airline and cargo transportation to help in the computation of considerable rates with the Analytic Hierarchy Process technique, a multi-condition management procedure. To attain the objective, this study assesses significant aspects that influence the choice of air cargo movers. The researchers employed the survey method of collecting data. It was carried out with the main participants being senior executives at air cargo organizations. The study established that price is the greatest component amongst airline choice criteria followed by speed.
Merkert, Van de Voorde, and de Wit (2017) provide an introductory paper that mulls over numerous crucial evolutions in the air cargo market. The researchers sought to highlight the heterogeneous setting in which air cargo services are carried out. The increasing volume of air cargo across the globe is playing a fundamental role in the transportation chain, as well as in the development of the global economy. With other forms of transportation apart from air, the necessity for cargo is a consequential demand. Earlier studies establish that the major causal aspects of air cargo necessity are merchandise trade and the proportion of traders in the market. Merkert et al. (2017) vividly underscore the most remarkable developments in the air cargo market. Moreover, the researchers examine the market structure carefully with the likely change of policies in the future.
Wong, Chung, and Hsu (2016) sought to evaluate competitiveness among airports in the Asian-Pacific market. Globalization and the subsequent variations in the supply chain system have intensified competition among airlines and airfields around the world. In this article, the researchers chose 13 major airports in the Asian-Pacific cargo market and assessed their competition, hierarchy, and competitive perspective with respect to the increasing demand and supply. In particular, indicators evaluated in the study encompass flight rate, route spread, the composition of major carriers, global trade, and the position of the chosen airports. The findings established that Hong Kong International Airport, Incheon International Airport, Shanghai Pudong International Airport and Taiwan Taoyuan International Airport demonstrated the highest competitive strength and characteristic developmental patterns. Hong Kong International Airport and Shanghai Pudong International Airport have been improved effectively to cater to both national and foreign carriers compared with Taiwan Taoyuan International Airport and Incheon International Airport, which are national-carrier-based. Although the latter operate excellently in the system of conventional carriers, Shanghai Pudong International Airport is highly competitive in the network of air cargo transporters, and Hong Kong International Airport functions successfully in both conventional and freight carriage operations. Of all the players in the Asian-Pacific air cargo market, Hong Kong International Airport has been the most outstanding. Nonetheless, mulling over the system of cargo carriers, Chinese airports have the greatest perspective in the area.
In their study, Delgado, Sirhan, Katscher, and Larrain (2020) initiate the Air Cargo Schedule Recovery Problem and offer a mathematical function for the underlying issue. The researchers recommend three different approaches to penalizing divergence from the initial schedule. In the study, formulation and recovery strategies have been evaluated on 96 situations to realize savings of about 10% when compared with a benchmark recovery strategy. In the Air Cargo Schedule Recovery Problem, Delgado et al. (2020) established that a carrier airline is supposed to reorganize flights and plans in an effort to adjust to last-minute variations in demand. The three approaches suggested for crew management strategies translate into practices of assessing the cost of deviation from the set program. The authors formulate the Air Cargo Schedule Recovery Problem as an assorted integer linear programming setback and tested the execution on 24 initial schedules that had about 30 orders in eight different airports and with four diverse interruption scenarios for each. The study establishes that, against a standard retrieval plan where just freight is re-routed, recovery may generate increased savings.
The aim of the study by Brandt and Nickel (2019) was to establish an effective air cargo reservation and pricing model under the alternative contract. The researchers took into consideration one carrier and numerous freight forwarders. Alternative contracts have been increasingly employed in the air cargo market in the past several decades attributable to the propensity to alleviate the capacity application risk of the asset provider. By getting into an alternative contract with air cargo transporters, freight carriers reserve a considerable capacity following acceptance of the option and its fractional or complete execution after recognition of the market demand (Brandt & Nickel, 2019). In the study, the researchers tackled the capacity stipulation and pricing issue under alternative contract in the air cargo market. Through numerical results, the research establishes that competition decreases the profit of cargo forwarders. The researchers establish a Stackelberg game model to enhance operations of air cargo operators and correspondingly develop favorable pricing and reservation strategies for both carriers and forwarders with the objective of maximizing their anticipated profitability. Numerical tests and sensitivity studies were subsequently undertaken with management insights established for asset providers and cargo carriers to offer directives for other players in the market.
Air cargo acts as a consistent, safe, and fast means of transport over long distances such as across national borders. With the likelihood of international marketing gaining a high preference for air cargo transportation in the future, there is a need for its progressive development. This will act as a way of upholding processing speeds, efficiency, specialized consumer services, opportune delivery, and decreased costs. The moment businesses implement strategies of ensuring sustained growth and development; they reinforce the quality of the service offered, support customer satisfaction, and advance competitiveness while promoting the loyalty of consumers for increased progress and augmented profitability. To make sure that the quality of service needed by consumers is achieved, numerous approaches should be pursued to generate a framework of reference for stakeholders in the air cargo market.
References
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