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Disentangling the European airlines efficiency puzzle: a network data envelopment analysis approach

Duygun, Meryem; Prior, Diego; Shaban, Mohamed; Tortosa-Ausina, Emili

Authors

Meryem Duygun

Diego Prior

Mohamed Shaban

Emili Tortosa-Ausina

Abstract

© 2015 Elsevier Ltd. In recent years the European airline industry has undergone critical restructuring. It has evolved from a highly regulated market predominantly operated by national airlines to a dynamic, liberalized industry where airline firms compete freely on prices, routes, and frequencies. Although several studies have analyzed performance issues for European airlines using a variety of efficiency measurement methods, virtually none of them has considered two-stage alternatives - not only in this particular European context but in the airline industry in general. We extend the aims of previous contributions by considering a network Data Envelopment Analysis (network DEA) approach which comprises two sub-technologies that can share part of the inputs. Results show that, in general, most of the inefficiencies are generated in the first stage of the analysis. However, when considering different types of carriers several differences emerge - most of the low-cost carriers' inefficiencies are confined to the first stage. Results also show a dynamic component, since performance differed across types of airlines during the decade 2000-2010.

Publication Date 2016-04
Journal Omega
Print ISSN 0305-0483
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 60
Pages 2-14
Institution Citation Duygun, M., Prior, D., Shaban, M., & Tortosa-Ausina, E. (2016). Disentangling the European airlines efficiency puzzle: a network data envelopment analysis approach. Omega, 60, 2-14. https://doi.org/10.1016/j.omega.2015.06.004
DOI https://doi.org/10.1016/j.omega.2015.06.004
Keywords Airlines; Network DEA
Publisher URL http://www.sciencedirect.com/science/article/pii/S0305048315001309
Additional Information Authors' accepted manuscript of article published in: Omega, 2016, v.60.

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