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Evaluating airline operational performance: A Luenberger-Hicks-Moorsteen productivity indicator

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  • Seufert, Juergen Heinz
  • Arjomandi, Amir
  • Dakpo, K. Hervé

Abstract

This study proposes a by-production Luenberger-Hicks-Moorsteen indicator that includes undesirable outputs, here CO2 emissions, in airline performance analysis. We use capital and staff as inputs and tonne-kilometres available as a desirable output to evaluate operation stage efficiency and productivity of the world’s major airlines between 2007 and 2013. Our results demonstrate European airlines are relatively stronger performers in terms of both pollution-adjusted operational efficiency and productivity. Middle-Eastern airlines have made gains in terms of output growth but perform poorly in terms of pollution-adjusted productivity, evidence that ETSs may produce greener airlines.

Suggested Citation

  • Seufert, Juergen Heinz & Arjomandi, Amir & Dakpo, K. Hervé, 2017. "Evaluating airline operational performance: A Luenberger-Hicks-Moorsteen productivity indicator," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 52-68.
  • Handle: RePEc:eee:transe:v:104:y:2017:i:c:p:52-68
    DOI: 10.1016/j.tre.2017.05.006
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    Keywords

    Data envelopment analysis; Airlines; By-production; Emissions; Luenberger-Hicks-Moorsteen;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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