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The operational performance of UK airlines: 2002-2007

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Author Info

  • A. George Assaf
  • Alexander Josiassen
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    Abstract

    Purpose – The purpose of this paper is to measure the efficiency of UK airlines in light of all the recent industry challenges. Design/methodology/approach – The study measured the technical efficiency of airlines through the innovative data envelopment analysis (DEA) bootstrap methodology. Findings – Results based on a sample of recent input/output data indicated that the efficiency of UK airlines has continuously declined since 2004 to reach a value of 73.39 per cent in 2007. Factors which were found to be significantly and positively related to technical efficiency variations include airline size and load factor. The paper also highlights that factors such as increase in oil price and fierce market competition were also potential inefficiency determinants. Practical implications – The findings of this paper provide a fresh link between airline performance and the current industry characteristics. UK airlines also have a major role in the European and international aviation sector, and thus a reflection on their efficiency could be of interest to private and public policy makers. Originality/value – The paper focuses on a recent period and thus provide a fresh efficiency assessment of the airline industry. The study also extends the limited literature available on UK airlines.

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    File URL: http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=38&issue=1&articleid=1901930&show=abstract
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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

    Volume (Year): 38 (2011)
    Issue (Month): 1 (January)
    Pages: 5-16

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    Handle: RePEc:eme:jespps:v:38:y:2011:i:1:p:5-16

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    Web page: http://www.emeraldinsight.com

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    Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
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    Web: http://www.emeraldinsight.com/jes.htm

    Related research

    Keywords: Airlines; Data analysis; Performance management; United Kingdom;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. SIMAR, Léopold & WILSON, Paul, 1996. "Estimating and bootstrapping malmquist indices," CORE Discussion Papers 1996060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Lall, Sanjaya, 1980. "Monopolistic Advantages and Foreign Involvement by U.S. Manufacturing Industry," Oxford Economic Papers, Oxford University Press, vol. 32(1), pages 102-22, March.
    3. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    4. Baltagi, Badi H & Griffin, James M & Rich, Daniel P, 1995. "Airline Deregulation: The Cost Pieces of the Puzzle," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 245-60, February.
    5. Good, David H. & Roller, Lars-Hendrik & Sickles, Robin C., 1995. "Airline efficiency differences between Europe and the US: Implications for the pace of EC integration and domestic regulation," European Journal of Operational Research, Elsevier, vol. 80(3), pages 508-518, February.
    6. Anatoliy G. Goncharuk, 2007. "Impact of political changes on industrial efficiency: a case of Ukraine," Journal of Economic Studies, Emerald Group Publishing, vol. 34(4), pages 324-340, September.
    7. Wolf, Bernard M, 1977. "Industrial Diversification and Internationalization: Some Empirical Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 26(2), pages 177-91, December.
    8. Carlos Pestana Barros, 2004. "Measuring performance in defense-sector companies in a small NATO member country," Journal of Economic Studies, Emerald Group Publishing, vol. 31(2), pages 112-128, May.
    9. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-74, October.
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    Citations

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    Cited by:
    1. Boon L Lee & Clevo Wilson & Carl A Pasurka, Jr, 2013. "The Good, the Bad and the Efficient: Productivity, efficiency and technical change in the Airline Industry, 2004:2008," School of Economics and Finance Discussion Papers and Working Papers Series 299, School of Economics and Finance, Queensland University of Technology.
    2. 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.

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