Infrastructure expansion in Brazilian airports: slack analysis using a distance friction minimization approach

Abstract

This paper reports the use of data envelopment analysis (DEA) and a distance friction minimization (DFM) approach with fixed factors presented by Suzuki and Nijkamp (A stepwise efficiency improvement DEA model for airport operations with fixed production factors. Paper presented at the ERSA Congress. http://ideas.repec.org/p/wiw/wiwrsa/ersa11p1065.html #biblio. Accessed 18 April 2013, 2011) to assess the levels of match between expected demand for the next 25 years and infrastructure expansion investments announced by Infraero (the Brazilian Airport Authority) for the Rio de Janeiro International Airport (also known as “Galeao”). The main advantage of using the DFM approach with fixed factors lies in the fact that, to achieve maximum performance for inefficient units (away from the efficiency frontier), there is no need to linearly improve all input variables, as for most real situations, this assumption could be very difficult for management to implement and control. Additionally, this method enables the development of models with production factors that for some reason cannot be changed or adjusted by management. Based on the data regarding the planned infrastructure expansion explicit in the concession agreement for the Rio de Janeiro International Airport (established when the airport was recently privatized), the results of this study confirm those of some previous studies that had already suggested (but did not objectively measure the shortfall considering efficiency issues) a possible capacity shortfall in the medium and long run for the Rio de Janeiro International Airport.