To read this content please select one of the options below:

Modeling Airline Efficiency – A Comparison of International Airlines Using Data Envelopment Analysis

ISBN: 978-1-78560-940-4, eISBN: 978-1-78560-939-8

Publication date: 31 May 2016

Abstract

This paper aims to develop and test a new way of modeling airline operations and apply it to measure and compare the efficiency of international airlines, with a special focus on deregulation effects. The paper elaborates on the choice of variables, following the early work of Schefczyk (1993) and Scheraga (2004). The value chain of the airlines determines the variables included in three different models. Using data envelopment analysis, the efficiency scores show that North American airlines are more efficient in producing services offered to customers. Few differences are found between regions in allocating service output to match demand. One plausible explanation for this difference is that airlines operate within competitive environments. In a highly competitive market, management decisions focus on productive actions and cost reduction. In a less competitive environment, there is a higher degree of adjustments of the services produced. Using the Malmquist productivity index, measurements reveal that there is a catch-up effect for the European and Asian/South American airlines service production during the studied time period, which was from 1990 to 2003.

Keywords

Acknowledgements

Acknowledgments

The author would like to thank Professor Ted Lindblom, Professor Kevin Cullinane, Associate Professor Magnus Söderberg, Associate Professor Jan Marton, Professor Martin Holmén, Associate Professor Hans Bjurek, Professor Rickard Bergqvist, and two anonymous reviewers for valuable comments. The author would like to give special thanks to Professor John Bitzan for highly appreciated suggestions on how to improve this chapter. The author also wants to thank the Sustainable Transport Initiative (STI) and the Centre for Finance, Gothenburg University, for financial support during the project.

Citation

Sjögren, S. (2016), "Modeling Airline Efficiency – A Comparison of International Airlines Using Data Envelopment Analysis", Airline Efficiency (Advances in Airline Economics, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 103-129. https://doi.org/10.1108/S2212-160920160000005005

Publisher

:

Emerald Group Publishing Limited