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ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES

Year 2016, Volume: 6 Issue: 1, 5 - 12, 23.07.2016

Yağmur Öz Can Deniz Köksal

Abstract

Comparing the efficiency levels and productivities of domestic and international airline companies is an active research area in services sector and has lots of interests in business administration field. In this study, Data Envelopment Analysis and Total Factor Productivity Analysis are used to compare the efficiencies and productivities of Star Alliance member international airline companies. Eight variables, including both inputs and outputs named as Number of Annual Passengers, Daily Departures, Number of Countries Served, Number of Airports Served, Revenue Passenger (Km), Sales Revenue ($), Number of Employees and Fleet of 26 airline companies are taken place in analysis for the years 2013 and 2014. Because of price differences in access the resources of services and goods that the companies used, the Variable Returns to Scale Method of Data Envelopment Analysis is used instead of Constant Returns to Scale Method to figure out efficiencies in years. Results show that there are differences in efficiencies and productivities of airline companies by the means of using their inputs to produce outputs while some of them are wasting their resource and some others are not

Keywords

Airlines Total Factor

References

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  • Assaf, A.G. & Josiassen, A. (2012). European vs. US airlines: performance comparison in a dynamic market (pp.
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  • Barros, C.P. & Couto, E. (2013). Productivity analysis of European airlines, 2000-2011 (pp.11-13). Journal of Air Transport Management 31.
  • Barros, C.P., Liang, Q.B. & Peypoch, N. (2013). The technical efficiency of US airlines (pp.139-148). Transportation Research Part A: Policy and Practice 50.
  • Bosetti, V., Cassinelli, M. & Lanza, A. (2003). Using Data Envelopment Analysis to Evaluate Environmentally Conscious Tourism Management, Conference for Tourism and Sustainable Development.
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  • Charnes, F., Cooper, W.W., Lewin, A.Y. & Seiford, L.M. (1994). Data Envelopment Analysis: Theory, Methodology, and Application. Kluwer Academic.
  • Chiou, Y.-C. & Chen, Y.-H. (2006). Route-Based Performance Evaluation of Taiwanese Domestic Airlines Using Data Envelopment Analysis (pp.116-127). Transportation Research Part E: Logistics and Transportation Review 42(2).
  • Choi, K., Lee, D. & Olson, D.L. (2013). Service quality and productivity in the US airline industry: a service quality-adjusted DEA model (pp.1-24). Service Business.
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  • Fitzsimons, J. A. & Fitzsimmons, M. J. (1998). Service Management Operations, Strategy and Information Technology, New York, Irwin McGraw-Hill.
  • Forsyth, P.J., Hill, R. & Trengove, C. (1986). Measuring airline efficiency (pp.61-81). Fiscal Studies 7.
  • Gelles, Gregory M. & Mitchell, Douglas W. (1996). Returns to scale and economies of scale: Further observations (pp. 259–261). Journal of Economic Education 27 (3).
  • Hirst, M. (2008). The Air Transport System. Library of Flight, Virginia. Hong, S. & Zhang, A. (2010). An efficiency study of airlines and air cargo/passenger divisions: a DEA approach (pp. 137-149). World Review of Intermodal Transportation Research 3.
  • Lee, B.L. & Worthington, A.C. (2014). Technical efficiency of mainstream airlines and low-cost carriers: new evidence using bootstrap data envelopment analysis truncated regression (pp. 15-20). Journal of Air Transport Management 38.
  • Lu, W.-M., Hung, S.-W., Kweh, Q.L., Wang, W.-K. & Lu, E.-T. (2014). Production and marketing efficiencies of the U.S. airline industry: a two-stage network DEA approach (pp.537-567). In: Cook, W.D., Zhu, J.
  • (Eds.), Data Envelopment Analysis. Springer, New York. Machek O. (2012). Data Issues in Total Factor Productivity Benchmarking: A Central European Perspective (pp.
  • 224-230). The Annals of the University of Oradea. Economic Sciences 21.
  • Merkert, R. & Hensher, D.A. (2011). The impact of strategic management and fleet planning on airline efficiency-a random effects Tobit model based on DEA efficiency scores (pp.686-695). Transportation Research Part A: Policy and Practice 45.
  • Metters, R.D., Frei, F.X. & Vargas, V.A. (1999). Measurement of multiple sites in Service Firms with Data Envelopment Analysis. Production and Operation Management 3.
  • Norman , M. & Stoker, B. (1991). Data Envelopment Analysis, The Assessment of Performance, John Wiley and Sons, New Jersey.
  • Sarkis, J. (2007). Preparing Your Data for DEA, Modeling Data Irregularities and Structural Complexities in Data Envelopment Analysis (pp.305-320). Springer.
  • Star Alliance. (2015, August 20). Star Alliance Services GmbH. Retrieved from http://www.staralliance.com/en/about/organisation
  • Star Alliance. (2015, August 20). Travel the World with Star Alliance Network. Retrieved from http://www.staralliance.com/en/about/member_airlines/
  • Tavassoli, M., Faramarzi, G.R. & Farzipoor Saen, R. (2014). Efficiency and effectiveness in airline performance using a SBM-NDEA model in the presence of shared input (pp.146-153). Journal of Air Transport Management.
  • Wu, W.-Y. & Liao, Y.-K. (2014). A balanced scorecard envelopment approach to assess airlines' performance (pp.123-143). Industrial Management & Data Systems Journal 114.
  • Yolalan, R. (1993). ,VOHWPHOHU$UDVÕ*|UHOL(WNLQOLN2OoP, MPM Yayinlari No: 483. Ankara.
  • Zelenyuk V. (2014). Scale efficiency and homotheticity: equivalence of primal and dual measures (pp.15-24). Journal of Productivity Analysis 42(1).
  • Zhu, J. (2011). Airlines performance via two-stage network DEA approach (pp.260-269). J. CENTRUM Cathedra 4.

Year 2016, Volume: 6 Issue: 1, 5 - 12, 23.07.2016

Yağmur Öz Can Deniz Köksal

Abstract

References

  • Arjomandi, A. & Seufert, J.H. (2014). An evaluation of the world's major airlines' technical and environmental performance (pp. 133-144). Econ. Model 41.
  • Assaf, A.G. & Josiassen, A. (2012). European vs. US airlines: performance comparison in a dynamic market (pp.
  • 317-326). Tourism Management 33. Barros, C.P. & Peypoch, N. (2009). An evaluation of European airlines’ operational performance (pp.525-533). International Journal of Production Economics 122.
  • Barros, C.P. & Couto, E. (2013). Productivity analysis of European airlines, 2000-2011 (pp.11-13). Journal of Air Transport Management 31.
  • Barros, C.P., Liang, Q.B. & Peypoch, N. (2013). The technical efficiency of US airlines (pp.139-148). Transportation Research Part A: Policy and Practice 50.
  • Bosetti, V., Cassinelli, M. & Lanza, A. (2003). Using Data Envelopment Analysis to Evaluate Environmentally Conscious Tourism Management, Conference for Tourism and Sustainable Development.
  • Chang, Y.-T., Park, H.-S., Jeong, J.-B. & Lee, J.-W. (2014). Evaluating economic and environmental efficiency of global airlines: a SBM-DEA approach (pp.46-50). Transportation Research Part D: Transport and Environment 27.
  • Charnes, A., Cooper, W.W. & Rhodes, E. (1978). Measuring the efficiency of decision making units (pp.429- 444). European Journal of Operational Research 2.
  • Charnes, F., Cooper, W.W., Lewin, A.Y. & Seiford, L.M. (1994). Data Envelopment Analysis: Theory, Methodology, and Application. Kluwer Academic.
  • Chiou, Y.-C. & Chen, Y.-H. (2006). Route-Based Performance Evaluation of Taiwanese Domestic Airlines Using Data Envelopment Analysis (pp.116-127). Transportation Research Part E: Logistics and Transportation Review 42(2).
  • Choi, K., Lee, D. & Olson, D.L. (2013). Service quality and productivity in the US airline industry: a service quality-adjusted DEA model (pp.1-24). Service Business.
  • Cook, W.D., Tone, K. & Zhu, J. (2014). Data envelopment analysis: prior to choosing a model (pp.1-4). Omega 44.
  • Fitzsimons, J. A. & Fitzsimmons, M. J. (1998). Service Management Operations, Strategy and Information Technology, New York, Irwin McGraw-Hill.
  • Forsyth, P.J., Hill, R. & Trengove, C. (1986). Measuring airline efficiency (pp.61-81). Fiscal Studies 7.
  • Gelles, Gregory M. & Mitchell, Douglas W. (1996). Returns to scale and economies of scale: Further observations (pp. 259–261). Journal of Economic Education 27 (3).
  • Hirst, M. (2008). The Air Transport System. Library of Flight, Virginia. Hong, S. & Zhang, A. (2010). An efficiency study of airlines and air cargo/passenger divisions: a DEA approach (pp. 137-149). World Review of Intermodal Transportation Research 3.
  • Lee, B.L. & Worthington, A.C. (2014). Technical efficiency of mainstream airlines and low-cost carriers: new evidence using bootstrap data envelopment analysis truncated regression (pp. 15-20). Journal of Air Transport Management 38.
  • Lu, W.-M., Hung, S.-W., Kweh, Q.L., Wang, W.-K. & Lu, E.-T. (2014). Production and marketing efficiencies of the U.S. airline industry: a two-stage network DEA approach (pp.537-567). In: Cook, W.D., Zhu, J.
  • (Eds.), Data Envelopment Analysis. Springer, New York. Machek O. (2012). Data Issues in Total Factor Productivity Benchmarking: A Central European Perspective (pp.
  • 224-230). The Annals of the University of Oradea. Economic Sciences 21.
  • Merkert, R. & Hensher, D.A. (2011). The impact of strategic management and fleet planning on airline efficiency-a random effects Tobit model based on DEA efficiency scores (pp.686-695). Transportation Research Part A: Policy and Practice 45.
  • Metters, R.D., Frei, F.X. & Vargas, V.A. (1999). Measurement of multiple sites in Service Firms with Data Envelopment Analysis. Production and Operation Management 3.
  • Norman , M. & Stoker, B. (1991). Data Envelopment Analysis, The Assessment of Performance, John Wiley and Sons, New Jersey.
  • Sarkis, J. (2007). Preparing Your Data for DEA, Modeling Data Irregularities and Structural Complexities in Data Envelopment Analysis (pp.305-320). Springer.
  • Star Alliance. (2015, August 20). Star Alliance Services GmbH. Retrieved from http://www.staralliance.com/en/about/organisation
  • Star Alliance. (2015, August 20). Travel the World with Star Alliance Network. Retrieved from http://www.staralliance.com/en/about/member_airlines/
  • Tavassoli, M., Faramarzi, G.R. & Farzipoor Saen, R. (2014). Efficiency and effectiveness in airline performance using a SBM-NDEA model in the presence of shared input (pp.146-153). Journal of Air Transport Management.
  • Wu, W.-Y. & Liao, Y.-K. (2014). A balanced scorecard envelopment approach to assess airlines' performance (pp.123-143). Industrial Management & Data Systems Journal 114.
  • Yolalan, R. (1993). ,VOHWPHOHU$UDVÕ*|UHOL(WNLQOLN2OoP, MPM Yayinlari No: 483. Ankara.
  • Zelenyuk V. (2014). Scale efficiency and homotheticity: equivalence of primal and dual measures (pp.15-24). Journal of Productivity Analysis 42(1).
  • Zhu, J. (2011). Airlines performance via two-stage network DEA approach (pp.260-269). J. CENTRUM Cathedra 4.
There are 31 citations in total.

Details

Other ID JA56CF65JM
Journal Section Articles
Authors

Yağmur Öz This is me

Can Deniz Köksal This is me

Publication Date July 23, 2016
Published in Issue Year 2016 Volume: 6 Issue: 1

Cite

APA Öz, Y., & Köksal, C. D. (2016). ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES. TOJSAT, 6(1), 5-12.
AMA Öz Y, Köksal CD. ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES. TOJSAT. July 2016;6(1):5-12.
Chicago Öz, Yağmur, and Can Deniz Köksal. “ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES”. TOJSAT 6, no. 1 (July 2016): 5-12.
EndNote Öz Y, Köksal CD (July 1, 2016) ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES. TOJSAT 6 1 5–12.
IEEE Y. Öz and C. D. Köksal, “ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES”, TOJSAT, vol. 6, no. 1, pp. 5–12, 2016.
ISNAD Öz, Yağmur - Köksal, Can Deniz. “ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES”. TOJSAT 6/1 (July 2016), 5-12.
JAMA Öz Y, Köksal CD. ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES. TOJSAT. 2016;6:5–12.
MLA Öz, Yağmur and Can Deniz Köksal. “ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES”. TOJSAT, vol. 6, no. 1, 2016, pp. 5-12.
Vancouver Öz Y, Köksal CD. ANALYZING EFFICIENCIES AND TOTAL FACTOR PRODUCTIVITIES OF STAR ALLIANCE MEMBER AIRLINES. TOJSAT. 2016;6(1):5-12.