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Financial Performance Evaluation of Airline Companies with Fuzzy AHP and Grey Relational Analysis Methods

Year 2021, Issue: 34, 37 - 56, 26.07.2021

Abstract

Air transport is an essential part of the transportation sector to provide speed, reliability and economic advantage. It is possible to say that; companies operating in the aviation sector have a financially fragile structure. There are many airline companies in the aviation sector in the world and Turkey. In this study five airline companies from EU member states and Turkey, including Turkish Airlines (THY), British Airways, Air France KLM, Lufthansa and Ryanair’s financial performance in the 2012-2018 period were evaluated. To determine the importance of the financial criteria, which were determined according to the literature, eight different expert opinions were taken and the weights of the criteria were determined according to expert’s opinions with the Fuzzy Analytical Hierarchy Process (FAHP) method. The financial performance rankings of the companies were realized with the Grey Relational Analysis (GRA) method. When looking at the analysis results of 2018, the company with the best financial performance was determined as THY. It is followed by Air France KLM, British Airways, Ryanair and Lufthansa, respectively. In the study, the Spearman correlation method was applied to the financial performance rankings determined by the GRA. The rankings were interpreted statistically, and Kendall's Tau correlation test was applied to examine the relationship between the number of flight destinations and the financial performance rankings of airline companies.

References

  • Akgün, M. and Soy Temür, A. (2016) “Evaluation of Financial Performance of Companies Registered in BIST Transport Index by TOPSIS Method”, Journal of International Management Economics and Management, 30, 173-186.
  • Amile, M., Sedaghat, M., & Poorhossein, M. (2013), “Performance Evaluation Of Banks Using Fuzzy AHP And TOPSIS, Case Study: State-Owned Banks, Partially Private And Private Banks İn Iran”, Caspian Journal Of Applied Sciences Research, 2(3).
  • Bektaş, H. and Tuna, K. (2013). Performance Measurement of Companies Traded with Grey Relational Analysis in Borsa İstanbul Emerging Companies Market. Çankırı Karatekin University Journal of FEAS, 3 (2), 185-198.
  • Chang, D. Y. (1996). Applications of the extent analysis method on fuzzy AHP. European Journal of Operational Research, 95(3), 649-655.
  • Doğan, M. (2013). Grey Relational Analysis of the Bank Performance Measurement: The Case of Turkey. Ege Academic View Magazine, 13 (2), 215-226.
  • Elitaş, C., Eleren, A., Yıldız, F. and Doğan, M. (2012). Determining the Performance of Insurance Companies by Grey Relational Analysis.
  • Ellibeş, E. (2020). Evaluation of Financial Performance of Airline Companies with Fuzzy AHP and Grey Relational Analysis Methods. Sakarya University Institute of Social Sciences Master Thesis. Feng, C. M., & Wang, R. T. (2000). Performance evaluation for airlines including the consideration of financial ratios. Journal of Air Transport Management, 6(3), 133-142.
  • Gerede, E. (2002). Airline Transporters Globalization and Airline Collaborations - An Application in Thy Ao. Unpublished Doctoral Thesis, Eskisehir: Anadolu University Institute of Social Sciences.
  • Göktepe, H.: 2007 Application of Competition Law Rules in the Air Transport Industry, Anadolu University Journal of Social Sciences, 1, 213-240.
  • Göksu, A. and Güngör, İ. (2008). Fuzzy analytical hierarchical processing and university preference ranking. Süleyman Demirel University Journal of Faculty of Economics and Administrative Sciences, 13 (3).
  • Hoe, L. W., Din, M. A., Siew, L. W., & Wai, C. J. (2018), “Evaluation On The Performance Of Suppliers İn Malaysia With TOPSİS Model”, Journal Of Fundamental And Applied Sciences, 10(6S), 406-415
  • Kahraman, C., Cebeci, U. ve Ruan, D., 2004” Multi Attribute Comparison of Catering Service Companies Using Fuzzy AHP: The Case of Turkey”, International Journal of Economics, 171-184.
  • Kaptanoğlu, D., Özok A.F. (2006). A Fuzzy Model for Academic Performance Evaluation. ITU Journal, 5 (1), 199.
  • Kaya, E., 2000. Accounting Information System in Terms of Pricing at Airports, Anadolu University Civil Aviation Schools Publications, Eskişehir.
  • Kökçam, A. H., Uygun, Ö. Kılıçaslan, E. Optimum Tire Selection Using Grey Relational Analysis Method. Journal of Intelligent Systems Theory and Applications, 1 (1), 31-35.
  • Okumuş, A. Ve Asil, H. (2007). Investigation of the Expectations of Airline Transporters According to Satisfaction Levels of Domestic and Foreign Passengers, Kocaeli University Journal of Social Sciences Institute, 13, 152-175.
  • Ömürbek, V. ve Kınay, Ö. G. B. (2013), “Financial Performance Evaluation Using the TOPSIS Method in the Airline Transportation Sector”, Süleyman Demirel University Faculty of Economics and Administrative Sciences Journal, 18 (3).
  • Özdemir, A.İ. and Deste, M. (2009). Multi-criteria selection with grey relational analysis: An application in the automotive industry. Istanbul University Faculty of Business Journal, 38 (2).
  • Öztürk, D. and Onurlubaş, E. (2019) Evaluation of Airline Transport Service Service Quality with AHP and Topsis Methods. Gümüşhane University Institute of Social Sciences Electronic Journal, 10, 81-97.
  • Sakarya, Ş., Yıldırım, HH and Akkus, HT (2015) “Determining the Financial Performance of BIST's Trade Energy Company by TOPSIS Multi Criteria Decision Making Method”, Hitit University, 19th Finance Symposium Çorum / 21 24 October 2015.
  • Shaverdi, M., Heshmati, M. R., & Ramezani, I. (2014) “Application Of Fuzzy AHP Approach For Financial Performance Evaluation Of Iranian Petrochemical Sector”, Procedia Computer Science, 31, 995-1004.
  • SHGM Annual Report 2016, Http://Web.Shgm.Gov.Tr/Documents/Sivilhavacilik/Files/Pdf/Kurumsal/ Reports / 2016_Activity_Report.Pdf, Access Date: 20.04.2018.
  • Şişman, A. G. B. and Eleren, A. (2013). Selection of the most suitable car with Grey Relational Analysis and Electr methods. Süleyman Demirel University Journal of the Faculty of Economics and Administrative Sciences, 18 (3).
  • Tayyar, N., Akcanlı, F., Genç, E. and Erem, I. (2014). It is written with the analytical hierarchy process (AHP) and grey relational analysis (GRA) method of financial performances. Accounting and Finance Magazine, (61), 19-40.
  • Uygurtürk, H. and Korkmaz, T. (2012) “Determining Financial Performance by TOPSIS Multi-Criteria Decision-Making Method: An Application on Basic Metal Industry Enterprises”, Eskisehir Osmangazi University Journal of Economics and Administrative Sciences, 7 (2).
  • Van Laarhoven, P.J.M., Pedrycz, W., “A fuzzy extension of Saaty’s priority theory”, Fuzzy Sets and Systems, 11,229-241,1983.
  • Wang, Y. J. (2008), “Applying FMCDM To Evaluate Financial Performance Of Domestic Airlines İn Taiwan”, Expert Systems With Applications, 34(3), 1837-1845.
  • Wanke, P., Barros, C. P., & Chen, Z. (2015) “An Analysis Of Asian Airlines Efficiency With Two Stage TOPSİS And MCMC Generalized Linear Mixed Models”, International Journal Of Production Economics, 169, 110-126.
  • Wen, K. L. (2004). The grey system analysis and its application in gas breakdown and var compensator finding. International Journal of Computational Cognition, 2(1), 21-44.
Year 2021, Issue: 34, 37 - 56, 26.07.2021

Abstract

References

  • Akgün, M. and Soy Temür, A. (2016) “Evaluation of Financial Performance of Companies Registered in BIST Transport Index by TOPSIS Method”, Journal of International Management Economics and Management, 30, 173-186.
  • Amile, M., Sedaghat, M., & Poorhossein, M. (2013), “Performance Evaluation Of Banks Using Fuzzy AHP And TOPSIS, Case Study: State-Owned Banks, Partially Private And Private Banks İn Iran”, Caspian Journal Of Applied Sciences Research, 2(3).
  • Bektaş, H. and Tuna, K. (2013). Performance Measurement of Companies Traded with Grey Relational Analysis in Borsa İstanbul Emerging Companies Market. Çankırı Karatekin University Journal of FEAS, 3 (2), 185-198.
  • Chang, D. Y. (1996). Applications of the extent analysis method on fuzzy AHP. European Journal of Operational Research, 95(3), 649-655.
  • Doğan, M. (2013). Grey Relational Analysis of the Bank Performance Measurement: The Case of Turkey. Ege Academic View Magazine, 13 (2), 215-226.
  • Elitaş, C., Eleren, A., Yıldız, F. and Doğan, M. (2012). Determining the Performance of Insurance Companies by Grey Relational Analysis.
  • Ellibeş, E. (2020). Evaluation of Financial Performance of Airline Companies with Fuzzy AHP and Grey Relational Analysis Methods. Sakarya University Institute of Social Sciences Master Thesis. Feng, C. M., & Wang, R. T. (2000). Performance evaluation for airlines including the consideration of financial ratios. Journal of Air Transport Management, 6(3), 133-142.
  • Gerede, E. (2002). Airline Transporters Globalization and Airline Collaborations - An Application in Thy Ao. Unpublished Doctoral Thesis, Eskisehir: Anadolu University Institute of Social Sciences.
  • Göktepe, H.: 2007 Application of Competition Law Rules in the Air Transport Industry, Anadolu University Journal of Social Sciences, 1, 213-240.
  • Göksu, A. and Güngör, İ. (2008). Fuzzy analytical hierarchical processing and university preference ranking. Süleyman Demirel University Journal of Faculty of Economics and Administrative Sciences, 13 (3).
  • Hoe, L. W., Din, M. A., Siew, L. W., & Wai, C. J. (2018), “Evaluation On The Performance Of Suppliers İn Malaysia With TOPSİS Model”, Journal Of Fundamental And Applied Sciences, 10(6S), 406-415
  • Kahraman, C., Cebeci, U. ve Ruan, D., 2004” Multi Attribute Comparison of Catering Service Companies Using Fuzzy AHP: The Case of Turkey”, International Journal of Economics, 171-184.
  • Kaptanoğlu, D., Özok A.F. (2006). A Fuzzy Model for Academic Performance Evaluation. ITU Journal, 5 (1), 199.
  • Kaya, E., 2000. Accounting Information System in Terms of Pricing at Airports, Anadolu University Civil Aviation Schools Publications, Eskişehir.
  • Kökçam, A. H., Uygun, Ö. Kılıçaslan, E. Optimum Tire Selection Using Grey Relational Analysis Method. Journal of Intelligent Systems Theory and Applications, 1 (1), 31-35.
  • Okumuş, A. Ve Asil, H. (2007). Investigation of the Expectations of Airline Transporters According to Satisfaction Levels of Domestic and Foreign Passengers, Kocaeli University Journal of Social Sciences Institute, 13, 152-175.
  • Ömürbek, V. ve Kınay, Ö. G. B. (2013), “Financial Performance Evaluation Using the TOPSIS Method in the Airline Transportation Sector”, Süleyman Demirel University Faculty of Economics and Administrative Sciences Journal, 18 (3).
  • Özdemir, A.İ. and Deste, M. (2009). Multi-criteria selection with grey relational analysis: An application in the automotive industry. Istanbul University Faculty of Business Journal, 38 (2).
  • Öztürk, D. and Onurlubaş, E. (2019) Evaluation of Airline Transport Service Service Quality with AHP and Topsis Methods. Gümüşhane University Institute of Social Sciences Electronic Journal, 10, 81-97.
  • Sakarya, Ş., Yıldırım, HH and Akkus, HT (2015) “Determining the Financial Performance of BIST's Trade Energy Company by TOPSIS Multi Criteria Decision Making Method”, Hitit University, 19th Finance Symposium Çorum / 21 24 October 2015.
  • Shaverdi, M., Heshmati, M. R., & Ramezani, I. (2014) “Application Of Fuzzy AHP Approach For Financial Performance Evaluation Of Iranian Petrochemical Sector”, Procedia Computer Science, 31, 995-1004.
  • SHGM Annual Report 2016, Http://Web.Shgm.Gov.Tr/Documents/Sivilhavacilik/Files/Pdf/Kurumsal/ Reports / 2016_Activity_Report.Pdf, Access Date: 20.04.2018.
  • Şişman, A. G. B. and Eleren, A. (2013). Selection of the most suitable car with Grey Relational Analysis and Electr methods. Süleyman Demirel University Journal of the Faculty of Economics and Administrative Sciences, 18 (3).
  • Tayyar, N., Akcanlı, F., Genç, E. and Erem, I. (2014). It is written with the analytical hierarchy process (AHP) and grey relational analysis (GRA) method of financial performances. Accounting and Finance Magazine, (61), 19-40.
  • Uygurtürk, H. and Korkmaz, T. (2012) “Determining Financial Performance by TOPSIS Multi-Criteria Decision-Making Method: An Application on Basic Metal Industry Enterprises”, Eskisehir Osmangazi University Journal of Economics and Administrative Sciences, 7 (2).
  • Van Laarhoven, P.J.M., Pedrycz, W., “A fuzzy extension of Saaty’s priority theory”, Fuzzy Sets and Systems, 11,229-241,1983.
  • Wang, Y. J. (2008), “Applying FMCDM To Evaluate Financial Performance Of Domestic Airlines İn Taiwan”, Expert Systems With Applications, 34(3), 1837-1845.
  • Wanke, P., Barros, C. P., & Chen, Z. (2015) “An Analysis Of Asian Airlines Efficiency With Two Stage TOPSİS And MCMC Generalized Linear Mixed Models”, International Journal Of Production Economics, 169, 110-126.
  • Wen, K. L. (2004). The grey system analysis and its application in gas breakdown and var compensator finding. International Journal of Computational Cognition, 2(1), 21-44.
There are 29 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Enes Ellibeş 0000-0002-0694-3523

Gökçe Candan 0000-0002-5966-0009

Publication Date July 26, 2021
Submission Date April 16, 2021
Published in Issue Year 2021 Issue: 34

Cite

APA Ellibeş, E., & Candan, G. (2021). Financial Performance Evaluation of Airline Companies with Fuzzy AHP and Grey Relational Analysis Methods. EKOIST Journal of Econometrics and Statistics(34), 37-56.