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Route-based performance evaluation of Taiwanese domestic airlines using data envelopment analysis

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  • Chiou, Yu-Chiun
  • Chen, Yen-Heng
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    Abstract

    This study employs data envelopment analysis (DEA) approach to evaluate the performance of domestic air routes from the perspectives of cost efficiency, cost effectiveness and service effectiveness. A total of 15 routes operated by a Taiwanese domestic airline are examined. Three input variables, two production variables and two service variables are selected from the regression analysis. The results of DEA model demonstrate that ten routes are relatively cost efficient, five routes are relatively cost effective and four routes are relatively service effective. Improvements for all inefficient routes are proposed based on their slack values. Furthermore, this study also performs agglomerative hierarchical clustering analysis to categorize the routes into four clusters according to their efficiency and effectiveness scores of three perspectives. The characteristics and directions of improvement for each cluster are analyzed and proposed.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

    Volume (Year): 42 (2006)
    Issue (Month): 2 (March)
    Pages: 116-127

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    Handle: RePEc:eee:transe:v:42:y:2006:i:2:p:116-127

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    Related research

    Keywords: Data envelopment analysis Air routes Cost efficiency Cost effectiveness Service effectiveness;

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    Cited by:
    1. Greer, Mark, 2009. "Is it the labor unions' fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 779-789, November.
    2. Greer, Mark R., 2008. "Nothing focuses the mind on productivity quite like the fear of liquidation: Changes in airline productivity in the United States, 2000-2004," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(2), pages 414-426, February.
    3. Tavassoli, Mohammad & Faramarzi, Gholam Reza & Farzipoor Saen, Reza, 2014. "Efficiency and effectiveness in airline performance using a SBM-NDEA model in the presence of shared input," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 146-153.
    4. Cruijssen, F.C.A.M. & Dullaert, W. & Joro, T., 2006. "Logistic Efficiency Through Horizontal Cooperation: The Case of Flemish Road Transportation Companies," Discussion Paper 2006-14, Tilburg University, Center for Economic Research.
    5. Halkos, George & Tzeremes, Nickolaos, 2012. "Measuring seaports’ productivity: A Malmquist productivity index decomposition approach," MPRA Paper 40174, University Library of Munich, Germany.
    6. Kritikos, Manolis N. & Ioannou, George, 2010. "The balanced cargo vehicle routing problem with time windows," International Journal of Production Economics, Elsevier, vol. 123(1), pages 42-51, January.
    7. Chiou, Yu-Chiun & Lan, Lawrence W. & Yen, Barbara T.H., 2012. "Route-based data envelopment analysis models," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(2), pages 415-425.
    8. Lu, Wen-Min & Wang, Wei-Kang & Hung, Shiu-Wan & Lu, En-Tzu, 2012. "The effects of corporate governance on airline performance: Production and marketing efficiency perspectives," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(2), pages 529-544.
    9. Chiou, Yu-Chiun & Lan, Lawrence W. & Yen, Barbara T.H., 2010. "A joint measurement of efficiency and effectiveness for non-storable commodities: Integrated data envelopment analysis approaches," European Journal of Operational Research, Elsevier, vol. 201(2), pages 477-489, March.
    10. Zhao, Y. & Triantis, K. & Murray-Tuite, P. & Edara, P., 2011. "Performance measurement of a transportation network with a downtown space reservation system: A network-DEA approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 1140-1159.

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