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The operational performance of UK airlines: 2002‐2007

Author

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  • A. George Assaf
  • Alexander Josiassen

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.

Suggested Citation

  • A. George Assaf & Alexander Josiassen, 2011. "The operational performance of UK airlines: 2002‐2007," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 38(1), pages 5-16, January.
    • Handle: RePEc:eme:jespps:v:38:y:2011:i:1:p:5-16
    DOI: 10.1108/01443581111096114
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    Citations

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    Cited by:

    1. Boon Liat Lee & Clevo Wilson & Carl A. Pasurka & Hidemichi Fujii & Shunsuke Managi, 2017. "Sources of airline productivity from carbon emissions: an analysis of operational performance under good and bad outputs," Journal of Productivity Analysis, Springer, vol. 47(3), pages 223-246, June.
    2. Mahmut BAKIR & Şahap AKAN & Kasım KIRACI & Darjan KARABASEVIC & Dragisa STANUJKIC & Gabrijela POPOVIC, 2020. "Multiple-Criteria Approach of the Operational Performance Evaluation in the Airline Industry: Evidence from the Emerging Markets," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 149-172, July.
    3. 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.
    4. Gang-Hoon Seo & Munehiko Itoh, 2020. "Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach," Sustainability, MDPI, vol. 12(15), pages 1-15, August.
    5. Kottas, Angelos T. & Madas, Michael A., 2018. "Comparative efficiency analysis of major international airlines using Data Envelopment Analysis: Exploring effects of alliance membership and other operational efficiency determinants," Journal of Air Transport Management, Elsevier, vol. 70(C), pages 1-17.
    6. Seo Gang-Hoon & Itoh Munehiko & Li Zhonghui, 2021. "Strategic Communication and Competitive Advantage: Assessing CEO Letters of Global Airline Alliances," Foundations of Management, Sciendo, vol. 13(1), pages 57-72, January.
    7. Jenatabadi, Hashem Salarzadeh & Ismail, Noor Azina, 2014. "Application of structural equation modelling for estimating airline performance," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 25-33.
    8. Yakath Ali, Nurul Syuhadah & Yu, Chunyan & See, Kok Fong, 2021. "Four decades of airline productivity and efficiency studies: A review and bibliometric analysis," Journal of Air Transport Management, Elsevier, vol. 96(C).
    9. Thanh Ngo & Kan Wai Hong Tsui, 2022. "Estimating the confidence intervals for DEA efficiency scores of Asia-Pacific airlines," Operational Research, Springer, vol. 22(4), pages 3411-3434, September.
    10. See, Kok Fong & Abdul Rashid, Azwan, 2016. "Total factor productivity analysis of Malaysia Airlines: Lessons from the past and directions for the future," Research in Transportation Economics, Elsevier, vol. 56(C), pages 42-49.
    11. Delbari, Seyyed Ali & Ng, Siew Imm & Aziz, Yuhanis Abdul & Ho, Jo Ann, 2016. "An investigation of key competitiveness indicators and drivers of full-service airlines using Delphi and AHP techniques," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 23-34.
    12. Arjomandi, Amir & Seufert, Juergen Heinz, 2014. "An evaluation of the world's major airlines' technical and environmental performance," Economic Modelling, Elsevier, vol. 41(C), pages 133-144.
    13. 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.
    14. Seo Gang-Hoon, 2020. "Competitive Advantages of International Airline Alliances: A Critical Review," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 11(1), pages 139-145, April.
    15. Chen, Ying-Hsiu & Lai, Po-Lin & Piboonrungroj, Pairach, 2017. "The relationship between airport performance and privatisation policy: A nonparametric metafrontier approach," Journal of Transport Geography, Elsevier, vol. 62(C), pages 229-235.
    16. Yu, Ming-Miin & Chang, Yu-Chun & Chen, Li-Hsueh, 2016. "Measurement of airlines’ capacity utilization and cost gap: Evidence from low-cost carriers," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 186-198.
    17. Singh, Jagroop & Sharma, Somesh Kumar & Srivastava, Rajnish, 2019. "What drives Indian Airlines operational expense: An econometric model," Journal of Air Transport Management, Elsevier, vol. 77(C), pages 32-38.

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