IV. Data Analysis
4.2. Test and Weighting Computation
Table 35. Criteria Inconsistency
Second Layer Third Layer
Major Criteria Mobility Finance Growth M Economic P Environmental Quality of Life Equity
CI CI CI CI CI CI CI CI
Firstly, need to check if the consistency test of the questionnaire (CI) is good enough, and seek consistency at all levels of the proportion of eigenvalues (at λmax). Knife root
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smoked (1993) pointed out that the CI and CR, preferably less than 0.1, as the case may sometimes be allowed to 0.15. However, Deng Zhenyuan (2002) pointed out that the maximum allowable range of the CI value of 0.2. As in this research study most of the data consistency is around 0.2 then data selected for the study would have a CI and CR range below 0.2. From the 26 questionnaire collected, 5 questionnaire are invalid due that their CI and CR are higher than 0.2 as shown in the table below. The invalid questionnaire corresponds to participant 1, 3, 5, 10, and 17.
4.3. Analysis of all the AHP’s level
Each stakeholder has a different opinion and need about their business industries therefore, a variety of stakeholder respondents were needed to understand the important of the criteria. As there are more than 1 participant, a geometric mean is used for the computation of all the matrix of the AHP’s level and weighting as shown in the below tables.
4.3.1. Major criteria
The impact of the Cross Strait Air Policy on aviation industries take in consideration 7 criteria such as (1) mobility, (2) finance, (3) growth management, (4) economic prosperity, (5) environmental stewardship, (6) quality of life, and (7) equity.
Table 36. Airlines Industry - Major Criteria’s Weighting
M F GM EP ES QL E Weighting Ranking
M 1 1/1.99 1/2.61 1/1.94 1.20 1.73 1.27 0.105 5
F 1.99 1 1.44 1.73 3.13 4.09 2.39 0.263 1
GM 2.61 1/1.44 1 1 1.05 3.00 2.75 0.192 2
EP 1.94 1/1.73 1 1 1.66 3.31 2.50 0.187 3
ES 1/1.20 1/3.13 1/1.05 1/1.66 1 1.10 1.57 0.108 4
QL 1/1.73 1/4.09 1/3.00 1/3.31 1/1.10 1 1.10 0.069 7 E 1/1.27 1/2.39 1/2.75 1/2.50 1/1.57 1/1.10 1 0.076 6 Lambda: 4.045, C.I.:0.02, C.R.:0.02
M: mobility, F: finance, GM: growth management, EP: economic prosperity, ES:
environmental stewardship, QL: quality of life, E: equity.
Source: This research data
As shown in the table 36, Airlines Industry care more about finance, growth management, economic prosperity, environmental stewardship, mobility, equity and quality of
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life. This industry weights these criteria in the following way: 0.263, 0.192, 0.187, 0.108, 0.105, 0.076 and 0.069, respectively. While this level of the consistency test is CI = 0.02, CR
= 0.02, are less than 0.1, then CI and CR fill with the requirements of consistency.
Table 37. High Tech Industry – Major Criteria’s Weighting
M F GM EP ES QL E Weighting Ranking stewardship, QL: quality of life, E: equity.
Source: This research data
On the other hand, High Tech industry concern more about finance, mobility, environmental stewardship, growth management, equity, quality of life and followed by economic prosperity. In contrast, as shown in table 38, Government considers as priority environmental stewardship, quality of life, equity, economic prosperity, growth management, finance and then mobility. All these results are useful due that the CI and CR of both table fix in with the consistency value range established.
Table 38. Government – Major Criteria’s weighting
M F GM EP ES QL E Weighting Ranking stewardship, QL: quality of life, E: equity.
Source: This research data
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Table 39. Overall Assessment- Major Criteria’s Weighting
M F GM EP ES QL E Weighting Ranking Lambda: 3.099, C.I.:0.00761, C.R.:0.00761
M: mobility, F: finance, GM: growth management, EP: economic prosperity, ES:
environmental stewardship, QL: quality of life, E: equity.
Source: This research data
And finally, at table 39, we have the assessment of the 3 stakeholder together. As shown in the table, in an overall point of view, the stakeholder would concern more about finance, growth management, environmental stewardship, economic prosperity, quality of life, equity and mobility.
4.3.2. Mobility
With the mobility factor, we wanted to define better which benefits gain is more appreciated by users of the Cross Strait direct flight. As same as above, we have separate assessment by stakeholder and ending with a group assessment. The purpose is to see the opinion of each industry in an individual point of view and then, in a group point of view.
In the airlines industry, respondents take more emphasis in the “travel time saving”
with a weighting level of 0.319. Following the travel time saving, respondents desire high reliability, vehicle operating and ownership and the last one, other user benefits.
Table 40. Airlines Industry – Mobility Weighting
M1 M2 M3 M4 Weighting Ranking
M1: travel time saving, M2:reliability, M3:vehicle operating and ownership, M4:
other user benefit
Source: This research data
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Stakeholder strongly care about time saving especially in for airlines industries and technology industries due to the behavior and characteristics of their business, they require certain level of tight logistic performance. For airlines industries, saving in travel time represent a benefit for the wages paid to their labor especially pilot and air hostess. Also, shorten flight distance can represent less consumption of fuel. As shown in the figure 37.
Mainland China and Taiwan airlines expenses, labor and fuel cost represent 48% above of their operating cost. Past studies suggested that lower cost in freight movement have a positive effect on all firms engaged in production, distribution, trade or retail sale of physical goods.
Figure 37. Mainland China (left side) and Taiwan (right side) airlines expenses
Source: Airlines Annual Report (2010)
On the other hand, high tech industry respondent appreciated more the reliability with a weighting of 0.419. Next, this industry care about the mobility, vehicle operating and ownership and other user benefits. High tech industry weights these criteria as follow 0.243, 0.186, and 0.154, respectively.
As many literature mentioned, users of transportation system value travel time reliability as well as saving since greater predictability in travel time help to reduce the cost associated with activity scheduling. Greater schedule reliability will have significant impacts in term of time gains. Therefore, allow high tech firms to manage their inventories and supply chains more efficiently. Increased in reliability reduce the requirement for buffer stock, inventory held to protect against delivery failure.
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Table 41. High Tech Industry – Mobility Weighting
M1 M2 M3 M4 Weighting Ranking
M1: travel time saving, M2:reliability, M3:vehicle operating and ownership, M4:
other user benefit
Source: This research data However, government considers more desire improving the “travel time saving” which weight it with 0.380. Then followed by the criteria “reliability” weighting it with 0.324;
“vehicle operating and ownership”, weight it with 0.185. And last, government considers the criteria “other user benefits”, the level of a weight of 0.111.
Table 42. Government - Mobility Weighting
M1 M2 M3 M4 Weighting Ranking
M1: travel time saving, M2:reliability, M3:vehicle operating and ownership, M4: other user benefit
Source: This research data Regarding operation and ownership of vehicles, it involves real resource costs that are associated with using the transportation system. There are extensive literature that related vehicle operating and ownership with the changes in industries networks. For airlines is essential the selection of an airport point where their hub would be located. This means that after the Cross Strait direct air policy, carriers can planned better their hub and create better schedule of their fleet, employer and routing. Carriers that can provide better service can influence shipper business and logistics performance.
At last, the table 43 shows the overall assessment of the stakeholder’s point of view for the criteria mobility. In an overall assessment, stakeholders appreciate the gain of mobility
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benefits in the following order: reliability, travel time saving, vehicle operating and ownership, and other user benefit.
Table 43. Overall Assessment- Mobility Weighting
M1 M2 M3 M4 Weighting Ranking
M1 1 1.03 1.74 1.74 0.318 2
M2 1/1.03 1 2.06 2.36 0.345 1
M3 1/1.74 1/2.06 1 1.68 0.195 3
M4 1/1.74 1/2.36 1/1.68 1 0.142 4
Lambda: 4.452, C.I.:0.01, C.R.:0.01
M1: travel time saving, M2:reliability, M3:vehicle operating and ownership, M4:
other user benefit
Source: This research data
4.3.3. Finance
As shown in the tables below, with the criteria finance, we try to capture what cost is more concerning for transportation users. In the case of airlines industry, they concern more about capital cost, followed by operating revenue, then, operating cost and finally, influence of finance on economy. However, high tech industry would concern more about operating revenue, operating cost, capital cost and at last, influence of finance on economy.
Figure 38. Mainland China (left side) and Taiwan (right side) airlines revenue
Source: Airlines Annual Report (2008)
The criteria “operating revenue” is relevant for this kind of industry due to the nature of their business. As carriers measure their profitability by the seat and weight load factor, it is very important for them to know what make their business. As shown in the figure 38.
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Mainland China (left side) and Taiwan (right side) airlines revenue, passenger activity represents more than 90% of the total revenue gain by Mainland China airlines. On the other hand, Taiwanese airline’s revenue represents almost half of cargo and half of passenger activities. However, high tech industries rely more in transportation to improve their logistic activities which allows the industries to reduce their cost and allow them to serve a wider market.
Besides operating revenue, the operating cost is another big concern especially for transportation industry as they rely heavily in petroleum and qualified professional. As mentioned in figure 37. Mainland China (left side) and Taiwan (right side) airlines expenses, labor and fuel are very important for airlines. On the other hand, many Taiwanese manufacturing established their factories in Mainland China are due to lower labor cost.
Table 44. Airlines Industry – Finance Weighting
F1 F2 F3 F4 Weighting Ranking
F1: operating cost, F2:capital cost, F3:operating revenue, F4: influence of finance on economy
Source: This research data
Table 45. High Tech Industry – Finance Weighting
F1 F2 F3 F4 Weighting Ranking
F1: operating cost, F2:capital cost, F3:operating revenue, F4: influence of finance on economy
Source: This research data
On the other hand, government would concern about operating revenue, influence of finance on economy, operating cost, and capital cost. Based on government’s respondent, they
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weight the criteria “operating revenue” with 0.354. Subsequently, governments weight the criteria “influence of finance on economy” with 0.286. Next, the criteria “operating cost” with 0.197, and capital cost, weight it with 0.163.
Table 46. Government – Finance Weighting
F1 F2 F3 F4 Weighting Ranking
F1: operating cost, F2:capital cost, F3:operating revenue, F4: influence of finance on economy
Source: This research data
Table 47. Overall Assessment – Finance Weighting
F1 F2 F3 F4 Weighting Ranking
F1: operating cost, F2:capital cost, F3:operating revenue, F4: influence of finance on economy
Source: This research data
In the overall assessment with all respondent’s opinion put together, we get that stakeholders would put more emphasis in the “capital cost” with a weighting level of 0.241.
The investment cost among different industries can vary according to the nature of their business. However, airlines industries, high technology industries and airport require a very high capital cost and the recovery of such investment may vary.
4.3.4. Growth Management
The criteria growth management tries to identify which population and employment distribution within the region is more desire for each stakeholder. Decision maker usually use the criteria “Growth Management” to measure the impact that new growth will going to have on a community and define the method by which that impact is mitigated.
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As shown in the table below, airlines industry’s respondents place additional importance in the criteria “employment” with a weighting level of 0.355. Following, consider the criteria “job and population in center”, the level of a weight of 0.228. Third, respondents would consider the criteria “population”, with a level of weight of 0.213. Last, respondents consider the criteria “job and housing balance”, the level of a weight of 0.204.
Deregulation literature suggests that relaxing airlines regulation can impact economy growth and therefore would provide more jobs opportunities. Nevertheless, airlines deregulation can influence other area such as trade and tourism. This means that can boost those industries growth. On the other hand, as Taiwan government tries to attract firm to invest in Taiwan Trade Free Zones and Science Park, this can bring more job opportunities.
Table 48. Airlines Industry – Growth Management Weighting GM1 GM2 GM3 GM4 Weighting Ranking
GM1: population, GM2:employment, GM3:job and housing balance, GM4: job and population in center
Source: This research data
Table 49. High Tech Industry – Growth Management Weighting GM1 GM2 GM3 GM4 Weighting Ranking
GM1: population, GM2:employment, GM3:job and housing balance, GM4: job and population in center
Source: This research data Nevertheless, high tech industry set the criteria ranking in as follow: employment, job and population in center, population and job and housing balance. The criteria “employment”, high tech industry weights it with 0.383. Following, consider the criteria “job and population
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in center”, the level of a weight of 0.231. Third, respondents weight the criteria “population”, with a level of weight of 0.196. Last, respondents consider the criteria “job and housing balance”, the level of a weight of 0.190.
Past literature states that firms tend to located in the cities where there populations and employees where situated. Because of the environmental impact of having activities inside a city is very high and affect a large group of resident then firms used to move their operation farther into suburban or county sides. In contrast, high tech industries tend form clustering and located their business near each other. This would let employees from different companies to share and exchange working experience among them. The centralization and des-centralization of firms don’t have a formal development pattern according to many literatures (Genevieve Giuliano, 1988).
Table 50. Government – Growth Management Weighting
GM1 GM2 GM3 GM4 Weighting Ranking
GM1: population, GM2:employment, GM3:job and housing balance, GM4: job and population in center
Source: This research data Table 51. Overall Assessment – Growth Management Weighting
GM1 GM2 GM3 GM4 Weighting Ranking
GM1: population, GM2:employment, GM3:job and housing balance, GM4: job and population in center
Source: This research data On table 51 shows the government’s position toward the growth management criteria.
Respondents consider more important employment, job and housing balance, job and population in center and population. In the overall assessment, we get that stakeholders care
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more about the criteria employment, job and population in center, job and housing balance and finally, population.
4.3.5. Economic Prosperity
Economic prosperity means overall economy, the economy is doing well and most people have sufficient income for essentials and perhaps a little extra. It means that businesses are hiring and jobs are relatively easy to get. The criteria, economic prosperity, try to identify which factors of transportation system that may tend to improve or degrade economic vitality have more important.
As shown in the table below, airlines industry place additional importance in the
“cluster employment” with a weighting level of 0.413 then following by the criteria “low and high wage employment”, with the level of a weight of 0.403. And at last, consider the criteria
“freight related employment”. But, high tech industry takes in account other criterion to weight the economic prosperity. For high tech industry, according to survey answer, it is more important “freight related employment”; followed by “low and high wage employment” and then by “cluster employment”.
Table 52. Airlines Industry – Economic Prosperity Weighting
EP1 EP2 EP3 Weighting Ranking
EP1 1 1.14 1.89 0.403 2
EP2 1/1.14 1 2.60 0.413 1
EP3 1/1.89 1/2.60 1 0.184 3
Lambda: 3.675, C.I.:0.02, C.R.:0.02
EP1: low and high wage employment, EP2:cluster employment, EP3:freight related employment
Source: This research data
Table 53. High Tech Industry – Economic Prosperity Weighting
EP1 EP2 EP3 Weighting Ranking
EP1 1 1.27 1/2.25 0.261 2
EP2 1/1.27 1 1/1.64 0.248 3
EP3 2.25 1.64 1 0.491 1
Lambda: 3.007, C.I.:0.03, C.R.:0.03
EP1: low and high wage employment, EP2:cluster employment, EP3:freight related employment
Source: This research data
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Carrier behavior toward serving a market is that if a market has demand, they will try to serve it. Rationale thinking suggests that high demand for freight related employment mean that high tech industries need movement of good. The need to move goods can be translate to growing in business activities. Both industries are afraid about new competitor entrants the Cross Strait market, however, the Cross Strait niche market is still immature; so there is still area where airlines and high tech companies haven’t explore yet.
Table 54. Government – Economic Prosperity Weighting
EP1 EP2 EP3 Weighting Ranking
EP1 1 1/2.45 1/1.27 0.218 3
EP2 2.45 1 1.26 0.463 1
EP3 1.27 1/1.26 1 0.319 2
Lambda: 3.312, C.I.:0.02, C.R.:0.02
EP1: low and high wage employment, EP2:cluster employment, EP3:freight related employment
Source: This research data
Meanwhile, government desire would be different from airlines or high tech industry.
As government wants to attract Taiwanese manufacturing back to Taiwan, they would also need to provide them an efficient transportation to get to their final market. At table 54, respondents take more priority to the criteria cluster employment, freight related employment and then, low and high wage employment.
Figure 39. Taiwan unemployment rate
Source: Trading Economics (2010)
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Nowadays, Taiwan has an unemployment rate of 4.5% as shown in the figure 39.
Taiwan -unemployment rate. A low unemployment rate means that inflows occur and this make up change in the labor force. The figure 40. Share of GDP of Agriculture, Industry and Services sectors shows the share of GDP between agriculture, services (transportation labor force is included) and industries sector (manufacturing labor force is included).
Figure 40. Share of GDP of Agriculture, Industry and Services sectors
Source: Industrial Development Bureau, Ministry of Economic Affairs (2010)
In an overall assessment, airlines, high tech and government all together consider the priority as follows: the criteria cluster employment, freight related employment and then, low and high wage employment. Stakeholders ranking the criteria “cluster employment’ with a level of 0.360; the criteria “freight related employment” with a level of 0.337 and then, the criteria “ low and high wage employment” with a level of 0.303.
Table 55. Overall Assessment – Economic Prosperity Weighting EP1 EP2 EP3 Weighting Ranking
EP1 1 1/1.11 1/1.19 0.303 3
EP2 1.11 1 1.14 0.360 1
EP3 1.19 1/1.14 1 0.337 2
Lambda: 4.312, C.I.:0.00428, C.R.:0.00428
EP1: low and high wage employment, EP2:cluster employment, EP3:freight related employment
Source: This research data
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Even though the criteria “low and high wage employment is ranking in the third place, it doesn’t mean is less important than above criteria. As aviation industries are gaining welfare, employees also want to gain that welfare. Trying to gain welfare from the deregulation may be the case that employees seek to press with labor strikes. As deregulation take place, firm can be threatened by other competitor.
4.3.6. Environmental Stewardship
The criteria environmental stewardship tries to determine which pollution has higher relevant for transportation users. As mentioned before, each industry may vary according to their business nature. As we know, airline firm is an industry that produces a high level of CO2 and has a high level of noise pollution. On the other hand, high tech firm and airport require land space for their activities and their activities can affect communities living nearby them. Therefore, it is of concern of government to protect and regulation firm’s activities.
Besides, they need to tries find a way to mitigate the impact of aviation industries on common people.32
Airlines industry’s respondents place additional importance in the “noise level” with a weighting level of 0.340. Secondly, consider the criteria “noise level”, the level of a weight of 0.218 then following the criteria “energy usage”, the level of a weight of 0.218. Next, the criteria “water quality” is considered by respondents with a level of a weight of 0.131. And last, stakeholder considers the criteria “resources land”, the level of a weight of 0.109.
Table 56. Airlines Industry – Environmental Stewardship Weighting ES1 ES2 ES3 ES4 ES5 Weighting Ranking
ES1 1 2.61 3.76 1.57 1.44 0.340 1
ES2 1/2.61 1 1/1.04 1/1.66 1/1.25 0.131 4
ES3 1/3.76 1.04 1 1/2.17 1/1.80 0.109 5
ES4 1/1.57 1.66 2.17 1 1/1.42 0.203 3
ES5 1/1.44 1.25 1.80 1.42 1 0.218 2
Lambda: 5.484, C.I.:0.01, C.R.:0.01
ES1: air quality, ES2:water quality, ES3:resources land, GM4: energy usage, ES5:noise level
Source: This research data
32 Refer to chapter 2.4.
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Meanwhile, high tech industry’s respondents place additional importance in the
“resources land” with a weighting level of 0.266. Secondly, consider the criteria “energy usage”, the level of a weight of 0.223 then following the criteria “noise level”, the level of a weight of 0.201. Next, the criteria “water quality” is considered by respondents with a level of a weight of 0.186. And last, stakeholders consider the criteria “air quality”, the level of a weight of 0.123.
Table 57. High Tech Industry – Environmental Stewardship Weighting ES1 ES2 ES3 ES4 ES5 Weighting Ranking
However, government’s respondents place additional importance in the “resources land”
However, government’s respondents place additional importance in the “resources land”