Efficiency Of Airlines Research Articles

Airline performance measurement using bias-corrected network data envelopment analysis estimates: Evidence from a turbulent era

This study's objective is to estimate airline performance and identify the most resilient business model during periods affected by global crises, including financial crises, natural disasters, pandemics, terrorist attacks, and post-crisis periods. A balanced panel of 80 airlines, classified into full-service carriers (FSC), low-cost carriers (LCC), high perceived quality, and low perceived quality, during 2008–2021 is used in this work. The data is sourced from the ICAO Data+ and Skytrax databases. Following the recent literature on airline efficiency, we consider airlines' internal structure, which unfolds into three stages: (a) operations, (b) services, and (c) sales. Also, we employ a novel three-stage multi-parametric bias correction (MPBC) slacks-based measure (SBM) network data envelopment analysis (NDEA) approach to estimate system- and stage-specific efficiencies. It has been proven that the MPBC estimates are consistent, while the MPBC-SBM-NDEA approach addresses the limitations of conventional NDEA and SBM-NDEA models. This work highlights that airline passengers have become more price-sensitive, selecting value-for-money airline products and services after the Global Financial Crisis. Given this trend and the remainder of the study's findings, LCCs offering value-for-money products and services and operating smaller-scale networks with smaller plane capacities are less vulnerable to external shocks and are easier to rebound during post-crisis periods.

Analysing group‐ and metatechnology efficiencies and technology gap of airlines for a sustainable future

AbstractAirline performance evaluation, which involves incorporating sustainable concepts, provides stakeholders and managers with an objective basis for decision‐making. This evaluation considers not only conventional metrics but also environmental impacts, contributing to the advancement of sustainable development goals. This study incorporates a two‐stage network of airline operations, which implies that airlines utilise limited resources to meet their service capacity in the first stage and generate passenger and cargo services alongside carbon emissions in the second stage. The study proposes a union dynamic network data envelopment analysis model, which integrates group technology and meta‐technology into a unified model. This model not only solves the unreasonable technology gap ratio problem but also accounts for the technological heterogeneity (whether or not to participate in a strategic alliance) and the dynamic efficiency of different airlines in the network structure during different operation periods. A sample of 24 global airlines from 2017 to 2019 is used in the study. The empirical results show that the dynamic total meta‐efficiency of the alliance group is significantly greater than that of the nonalliance group over the 3 years. This suggests that joining a strategic alliance has a positive effect on airlines' operational efficiency while reinforcing their commitment to sustainability initiatives.

Assessing airline efficiency with a network DEA model: A Z-number approach with shared resources, undesirable outputs, and negative data

This study measures the efficiency of airlines using a novel fuzzy common weight additive network data envelopment analysis (NDEA) with shared resources, negative data, and undesirable outputs. First, an appropriate two-stage network is designed for each airline so that stages 1 and 2 are called the Production and Service stages, respectively. The proposed model adopts a top-down approach and calculates the efficiency of the system first and then estimates the efficiency of stages 1 and 2. To evaluate and predict the airlines’ efficiency considering fuzzy data and the reliability of the information, the values of input/intermediate/output variables are predicted as the Z-number and the appropriate Z-number version of NDEA (ZNDEA) models is proposed. To develop the proposed ZNDEA models and find common weights for the variables, three multi-objective ZNDEA models for the system, stage 1 and stage 2 are presented. The multi-objective common weight ZNDEA models are solved using the min-max Chebyshev goal programming technique and the final efficiencies are calculated. To illustrate the capability of the proposed approach, real-life data from Iranian airlines in 2022 are collected, and the efficiencies are analyzed.

Efficiency of global airlines incorporating sustainability objectives: A Malmquist-DEA approach

Despite the impact of the COVID-19 pandemic, airline managers are still expected to look beyond financial and operational metrics to include sustainability goals that address key environmental, social, and governance aspects of the airline business. While there is a considerable body of literature addressing airline efficiency in terms of environmental performance, studies that integrate the various dimensions of sustainability are notably scarce. This paper aims to fill this gap by estimating technical efficiency using a sample of 34 airline groups between 2019 and 2022, with a Malmquist-Data Envelopment Analysis (DEA) methodology that includes financial, operational, and sustainability scores (Environmental and Social). Our results show a productivity loss between 10% and 14% during the COVID-19 period, with a better performance once the carriers are credited for their sustainability achievements. Using a second-stage bootstrapped truncated regression, we confirm the positive impact of hubbing operations and also find significant differences across geographical regions.

Artificial intelligence as a driver of efficiency in air passenger transport: A systematic literature review and future research avenues

Despite the claim that artificial intelligence (AI) has the potential to increase efficiency in and for airlines, current literature is limited concerning models and frameworks to assess AI applications and their implications for airline efficiency. In response, we a) conceptualize and propose an AI-Airline-Efficiency-Model (AAEM) that allows for a more structured management approach for a systematic review and analysis of existing literature, and b) present a framework explicating the identified areas of AI application for airline efficiency based on a the AAEM model. In particular, using the four AI elements Machine Learning, Deep Learning, Reinforcement Learning and Natural Language Processing and their applications within six identified airline departments, we systematically review and analyze key attributes and characteristics of both AI and airline efficiencies to critically assess current research efforts. We found that AI applications are built around four overarching improvement areas predictive analytics, resource optimization, safety & autonomous processes and passenger experience, but lack a cross-department and inter-organizational focus and are often theoretical in nature. This study provides insight into most prevalent AI applications and the less popular applications applied in and for passenger transport, thereby presenting the dominating AI techniques that are covered by existing literature as well as highlighting a wide range of emerging AI techniques with the potential to become more influential for future studies. We discuss theoretical and managerial implications and offer avenues for future research.

Comparative Network Efficiency Analysis of the Airlines in Turkey After Deregulation

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.

From Aviation to Web Standarts: Transformation of SSIM Files into JSON Format

Considering dynamic changes in the aviation sector, successful data exchange and integration planning plays a pivotal role in maintaining operational efficiency of airlines. Although the SSIM (Standard Schedules Information Manual) file is considered a reliable format, it has certain limitations regarding interaction and compatibility with other web technologies and programs due to its text format strictly defined by the specification. In this work, we propose an approach to convert SSIM files into the JSON (JavaScript Object Notation) format. One of the central aspects of this work is a detailed transformation model that considers all the important structures and levels of information of the SSIM file, conducts their syntactic analysis, and converts them into a flexible and easily recoverable JSON format. To transform a set of aviation flights into a combined flying line, a modified branch and bound method is used. With a series of examples and experiments, the article aims to demonstrate the effectiveness of this methodology in terms of preserving data integrity and ensuring their accuracy. In particular, the problems faced during the transformation, for example, how to consider the consistency of data rows with fixed width in the SSIM file, are considered. The transition from aviation-oriented formats, such as the SSIM file, to global web formats, such as JSON, is a process that goes beyond technologies and aims to increase the flexibility and convenience of collaboration, as well as data processing in the aviation industry. This research helps to implement this change, offering a simple, effective, and scalable approach for converting airline schedules into a format that by its nature meets the needs of modern information applications and systems.

Ecological Air Tourism in the System of Environmental Engineering

The study considers the role of ecological aviation tourism as a direction of the national and world economy, reveals the interpretation of the concept of «ecological aviation tourism», its main types and investigates the conceptual provisions on which this type of tourism is based. Passenger and freight traffic for the period 2019-2021 is considered and it is determined that against the background of lifting or easing of anti-epidemic restrictions by many countries and the success of the vaccination process, there was a gradual increase in demand for air transport services, especially during the «active» tourist season, which contributed to an improvement in the air transport market. According to statistics for 2021, he number of passengers transported by domestic airlines was 9348.1 thousand passengers, which is almost 95% more than in 2020 and 68.2% of the volume of the «pre-pandemic» 2019. The article analyzes air pollution by harmful substances from aircraft engines, which make up 87% of all civil aviation emissions. The article considers the "European Green Course: opportunities and threats for Ukraine" was considered, which defines 10 main goals for improving the environmental efficiency and sustainability of airlines at the global level.

How does civil aviation achieve sustainable low-carbon development? — An abatement–cost perspective

With the rapid development of civil aviation, carbon emissions have brought severe environmental problems. Realizing efficient and sustainable carbon emission reduction is of great significance for achieving green development in civil aviation sector. Therefore, in the process of pursuing civil aviation carbon emission reduction goals, it is necessary to further consider how to achieve emission reduction at the lowest cost. Based on the accurate carbon emission performance evaluation, the carbon abatement cost among different representative airlines have been systematically compared. The main work and findings of this study can be summarized in the following three aspects. Firstly, a new nonparametric shadow price measurement method was constructed based on the Slacks-Based Measurement Data Envelopment Analysis (SBM-DEA). This can better reflect the essence of efficiency evaluation and the calculated shadow price results are more consistent with the real market. Secondly, the average value of carbon emission efficiency has experienced a fluctuating downward trend from 2011 to 2017, indicating that the carbon emission efficiency of global airlines has decreased. Thirdly, the average value of the shadow price is generally between 313.4 and 398.4 dollars/ton, showing an “up-down-up” trend, and reaching a peak of 398.4 dollars/ton in 2014. This can provide a basis for low-carbon policy makers in the civil aviation sector, and also provide reference for different types of airlines to achieve low-cost emission reduction.

Using a Bayesian meta-frontier approach to evaluate airline performance: The nexus between airline efficiency and customer satisfaction

A balanced panel of 83 airlines during 2011–2019, classified into (a) high perceived service quality and (b) low perceived service quality, was incorporated into the Bayesian meta-frontier framework. Our findings were obtained from applying a novel method to data sourced from the ICAO Data+ and Skytrax databases. We obtained consistent efficiency and meta-technology efficiency estimates, shedding light on airlines’ business models, products, and services to improve their efficiency and customer satisfaction. Specifically, we did not identify a trade-off between customer satisfaction and airline efficiency. However, larger firms were more likely to achieve this dual objective. Airlines classified as having high service quality reported greater allocative inefficiency than their low-quality service counterparts. During periods with or without minor external shocks (e.g., 2011–2019), airlines could offer premium products at reasonable prices or with a better quality and cost-of-service balance (e.g., premium economy cabins, extra legroom, inflight entertainment, and Internet).

A comprehensive neutrosophic model for evaluating the efficiency of airlines based on SBM model of network DEA

This research aims to provide an innovative framework for evaluating airline performance through the networking of decision-making units (DMUs) and neutrosophic data. As a consequence, we propose a comprehensive methodology for assessing the efficiency of these decision-making units. Network data envelopment analysis (DEA) models deal with measurements of relative efficiency of DMUs when the insight of their internal structures is available. In network models, sub-processes are connected by links or intermediate products. Links have the dual role of output from one division or sub-process and input to another one. Therefore, improving the efficiency score of one division by increasing its output may reduce the score of another division because of increasing its input. To address this conflict, we proposed a new approach in Slack-Based Measure (SBM) framework and neutrosophic logic, which provide deeper insights regarding the sources of inefficiency. Our approach is a new network model, in which the intermediate products are classified into two groups of “input-type”, and “output-type” that their excesses and shortfalls directly concern with the objective function. The results of the illustrated case and analysis show that the constructed model may successfully produce performance assessments. By taking into account the number of slacks or surpluses of these products in the objective function, the proposed model gives analysts and managers a more accurate assessment of network structure efficiency. In this paper, we present a new model in the field of network data envelopment analysis with SBM approach in a neutrosphonic environment, in which for the first time the nature of intermediate products in terms of input or output is investigated. Also, the proposed framework is the first attempt to performance evaluation in neutrosophic network DEA.

The Effects of Bankruptcy on Airline Yield and Frequency: The case of the duopolistic domestic market in Japan

Using data on the Japanese domestic market from 2008 to 2013, this paper investigates the market dynamics triggered by the 2010 bankruptcy protection of Japan Airlines (JAL). Our analysis suggests that JAL downsized its overall operations, leaving relatively thin routes even though there were fewer competitors and slightly higher yields in those thin markets. The airline nevertheless increased the yields and flight frequencies in the consolidated network more significantly than its rival airlines did. Following JAL's bankruptcy, Japanese carriers focused more on improving yield and frequency in general, and the competition between the duopoly airlines (JAL and All Nippon Airways (ANA)) became less effective. In comparison, low-cost carriers (LCCs) and smaller airlines continued to exert significant competitive pressure on the market despite their small market shares. These patterns are different from those observed in the US, where a huge domestic market is served by a large number of competitive airlines. Overall, our analysis suggests that the Japanese government's support of JAL's restructuring efforts was appropriate. However, there is evidence that the JAL-ANA duopoly became less effective in maintaining market competition. The Japanese government should more actively explore ways to provide a level playground to LCCs and smaller airlines so that enhanced competition can promote airline efficiency and services in the long term.

Airline efficiency and environmental impacts – Data envelopment analysis

Airline efficiency has been a research interest for decades. While early airline efficiency research focused primarily on revenue generation and profitability, growing airline social responsibility is driving greater investment into understanding and improving the environmental impact on airline efficiency. This study developed a two-phase, two-stage model using a data envelopment analysis (DEA) approach to simultaneously evaluate airline operations for available seat mile (ASM) generation, revenue passenger mile (RPM) generation, carbon dioxide emissions abatement, and revenue generation on a sample of thirteen airlines. Efficiency evaluation was performed for the years between 2013 and 2015, between U.S. and non-U.S. carriers, and between full-service carriers (FSCs) and low-cost carriers (LCCs). Results indicated more accurate measurement of airlines’ overall efficiency using the proposed DEA model, which included operational and cost factors as input variables and environmental impact as both the input and output variables in the model. Service and environmental factors were found to be significant in determining airline efficiency, with environmental abatement affecting the overall efficiency of airline performance both inside and outside the U.S. when emission reduction effort was properly accounted for. The findings provided theoretical and managerial implications in the assessment of airline efficiency with a special emphasis on incorporating environmental impact in the overall evaluation.

Persistent and transient productive efficiency in the African airline industry

Airline efficiency growth is considered one of the key factors for aviation sustainability in Africa and for creating a successful relationship between aviation activities and economic development in the continent. This paper proposes estimating the efficiency of African airlines in the period 2010–2019 using a state-of-the-art stochastic frontier model disentangling persistent efficiency, transient efficiency, and unobserved heterogeneity. We also examine the impact on both persistent and transient efficiency of (i) ownership structure, (ii) political stability, (iii) airline geographical location, (iv) airline domicile country’s economic freedom, and (v) airline participation in a global alliance. We find evidence of relatively low efficiency and decreasing returns to scale, implying that it is important to achieve better utilization of inputs. Our findings also suggest that protectionism seems still an important driver of efficiency in a context characterized by a lack of liberalization. However, enhanced economic freedom is found to be more relevant in improving the efficiencies of African airlines, suggesting that policy interventions aimed at speeding up the liberalization process may help to remove the conditions that make air carriers operate inefficiently.

The Role of the Top 50 US Cargo Airports and 25 Air Cargo Airlines in the Logistics of E-Commerce Companies

Background: The purpose of this study is to analyse the role of the main 50 US cargo airports and 25 air cargo airlines in the logistics of e-commerce companies from 2000 to 2020, to highlight the importance of airports in the logistics and e-commerce industries. Methods: A review of the relevant literature on airports, air cargo carriers, logistics, and e-commerce sectors was undertaken to understand the link between them. The data were collected using four criteria: airport category, airport location, top 25 air cargo carriers, and other relevant data from the Federal Aviation Administration, International Air Transport Association, Organization for Economic Co-operation and Development, US Department of Transportation, amongst many others. Results: The findings reveal that there is a consolidated relationship between airports, air cargo airlines, and e-commerce, which has been especially evident during the COVID-19 pandemic. Airports and air cargo carriers are identified as the most relevant partners in the e-commerce industry. This is because of the e-commerce sector and its users’ demand for speed and reliability in the interaction between the demand for and supply of products and services. Conclusions: The pandemic has changed the way in which organizations operate and is likely to create new demand from companies and users in the aviation and e-commerce industries. E-commerce companies are highly dependent on the quality and efficiency of air cargo airlines and airports because they need to provide a good shipping service for their products to customers.

Malmquist TFP Yöntemiyle Finansal Etkinlik Analizi: Star Alliance Üyesi Havayolu İşletmelerinde Bir Uygulama

The purpose of this study is to analyze the financial efficiency of 15 airlines that are members of the Star Alliance which is considered the largest international strategic airline network for the period 2016-2019 using the Malmquist Total Factor Efficiency method. In addition, other purposes include the comparison of the change in technical efficiency (TE), technological change (TD) and total factor productivity (TFP) values of airlines that are members of the Star Alliance As a result of the analysis, it was found that the average technological change and total factor productivity values of the airlines in question increased in the period 2016-2017, and the average technical efficiency values decreased. On the other hand, in the period 2017-2018, the opposite situation was observed. In the period 2018-2019, technical efficiency, technological change and total factor productivity values decreased. It was found that the technical efficiency values of the Air Canada and Turkish Airlines increased during the entire period, while the average technical efficiency, technological change and total factor productivity values of the Air New Zealand, Asiana Airlines, Avianca, Lufthansa and Thai Airways decreased.

Measuring the dynamic airline energy efficiency with non-homogeneous structures

Non-homogeneous structures are ubiquitous in airline operations and it is a very important issue to estimate the energy efficiencies of the non-homogeneous airlines. In this paper, we consider three non-homogeneous structures: non-homogeneous outputs structure, non-homogeneous inputs structure and non-homogeneous inputs & non-homogeneous outputs structure, and build a new method to measure the dynamic energy efficiencies of airlines with these three structures. Then we construct a dynamic DEA model to conduct an empirical study on 25 airlines during 2012–2019, and compare the results with those of traditional method to verify the improvement effect and reasonable feasibility of the proposed method.

글로벌 금융위기와 유럽 금융위기 기간의 항공사 효율성 분석 연구

The global financial crisis and economic recession lead to a decline in airline returns and deterioration in the business environment. In this regard, we compared and analyzed the efficiency of airlines during the global financial crisis and the European financial crisis by using the two-stage Network Data Envelopment Analysis (DEA) model. Network DEA can complement the shortcomings of the traditional DEA model and explain the transformation process hidden in the intermediate process and compare the relationship between efficiency. For the analysis, 16 airlines in Europe and related countries were selected and the period from 2007 to 2016, when the financial crisis occurred, was used. As variables, ‘operating costs’ and the ‘number of employees’ were used as input, and

Exploring the Influence of Corporate Social Responsibility on Efficiency: An Extended Dynamic Data Envelopment Analysis of the Global Airline Industry

Corporate social responsibility (CSR) has received significant attention from practitioners, encouraging companies to consider it as a business model for their sustainable development. This study examines the effect of CSR on the dynamic efficiency of the global airline industry from 2013 to 2017. The study integrates DuPont and two-stage network data envelopment analyses to evaluate global airline efficiency and its relationship with CSR. Multiple proxies are used to establish a performance evaluation method and analyze the performance of global airlines from the perspectives of their financial structure, production performance and CSR. The study examines the influence of CSR to global airlines’ production efficiency and CSR is measured according to environmental, social and governance activities. The findings are as follows: (1) the profitability of low-cost carriers (LCCs) is superior to that of full-service carriers (FSCs); (2) the energy and wealth-creation efficiencies of LCCs are superior to those of FSCs; (3) FSCs are more committed to CSR activities, and their CSR is positively correlated with overall production efficiency; and (4) environmental and social elements in CSR improve airline efficiency levels. Overall, this study suggests that global airlines should practice CSR to address challenges in the dynamic global airline industry.

Evaluating the efficiency of global airlines: A new weighted SBM-NDEA approach with non-uniform abatement factor

Over the past decade, issues related to environmental controls in the airline industry have arisen, attracting increased attention from policy and decision makers. Several global initiatives, including the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the European Union Emissions Trading System (EU-ETS), have been proposed to reduce carbon dioxide (CO2) emissions. As passenger numbers grow, airlines could become one of the largest contributors to global warming. In practice, airline operations involve a series of network processes, and these processes can be grouped into two subprocesses: a) production and b) airline services. Based on our literature review, only a few studies have examined the efficiency of airlines using network data envelopment analysis (NDEA) instead of the conventional data envelopment analysis (DEA) framework (also known as the black-box approach). In addition, the traditional treatment of undesirable outputs (e.g., CO2 emissions) in the DEA approach involves the use of a single abatement factor to reduce both undesirable and beneficial outputs. Performance assessment using this weakly disposable Shephard technique may overestimate the technical efficiency of the evaluated units. The main objective of this study is to investigate the performance of the two subprocesses of global airlines by incorporating CO2 emissions using multiple abatement factors based on the Kuosmanen technology. To capture different airline groupings, we use a network DEA model to estimate the technical efficiency of global airlines in alliance and non-alliance groups. A sample of 29 global airlines in 2018 is used in the study. The results reveal that the main source of overall technical inefficiency of most airlines is scale inefficiency in both production and airline services.