Comparative Network Efficiency Analysis of the Airlines in Turkey After Deregulation

Abstract

Deregulation has significantly developed the civil air transport industry in an ever-globalizing world. Even though deregulation has caused significant structural transformations in airline companies, the effect of deregulation effect on the production, marketing efficiency, and competitiveness of airline carriers worldwide, especially in Turkey, has not been fully revealed yet. Therefore, this study aims to analyze the efficiency of Turkish air carriers after the deregulation process in Turkish civil aviation by dividing the efficiency into production and market efficiency. Production and marketing efficiencies of airlines were estimated using the window network data envelopment analysis methodology. Efficiency analysis results showed production efficiency at 0.887, marketing efficiency at 0.764, and system efficiency at 0.796. Results also indicate that low-cost airlines have a higher production efficiency score (0.918) than full-service airlines (0.825). In comparison, the marketing efficiency of full-service airlines (0.879) is higher than that of low-cost carriers (0.708). The study determined that the system efficiency does not change according to the business model. The system efficiency score of the full-service provider airlines with a larger market share is higher and more balanced. The close and dynamic monitoring of the air transport market and the continuation of operations under a business model incorporating an appropriate marketing mix will increase the marketing efficiency of the airlines.