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A fresh look at the productivity and efficiency changes of UK airlines

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  • A. Assaf

Abstract

This article uses the bootstrapped Malmquist index methodology to measure and test the extent of efficiency and productivity changes in the UK airline sector. The aim of the bootstrap method is to overcome the statistical limitations of the Data Envelopment Analysis (DEA) method, generally used to measure the distance functions of the Malmquist index. In applying the method we use input/output data on a sample of major UK airlines for the period 2004-2007. Results showed that most airlines have witnessed significant decrease in their productivity, efficiency, scale and technology measures. Using a second stage Tobit regression, this article attributed the sources of productivity and efficiency changes to factors such as stage length, load factor and airline size. This article also discussed the negative impacts of oil price using illustrations from the UK and other international airlines.

Suggested Citation

  • A. Assaf, 2011. "A fresh look at the productivity and efficiency changes of UK airlines," Applied Economics, Taylor & Francis Journals, vol. 43(17), pages 2165-2175.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:17:p:2165-2175
    DOI: 10.1080/00036840903085071
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    Cited by:

    1. 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.
    2. Mad Ithnin Salleh & Nurul Fadly Habidin & Abdul Halim Masnan & Nordin Mamat, 2017. "Estimating Technical Efficiency and Bootstrapping Malmquist Indices: Analysis of Malaysian Preschool Sector," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(3), pages 440-457, March.
    3. 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.
    4. Howell, Charles & Grifell-Tatjé, Emili, 2022. "Market heterogeneity and the relationship between competition and price dispersion: Evidence from the U.S. airline market," Transport Policy, Elsevier, vol. 125(C), pages 218-230.
    5. Stylianos Gr. Margaritis & Constantinos P. Tsamadias & Elias E. Argyropoulos, 2022. "Investigating the Relative Efficiency and Productivity Change of Upper Secondary Schools: the Case of Schools in the Region of Central Greece," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 128-160, March.
    6. Chyan Yang & Tung-Pao Wang, 2016. "Productivity comparison of European airlines: bootstrapping Malmquist indices," Applied Economics, Taylor & Francis Journals, vol. 48(52), pages 5106-5116, November.
    7. 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.
    8. Liu, Wei & Gao, Lixiang & Song, Hang & Huang, Mingdong, 2021. "Factor market distortion, technology change, and green growth in the Chinese civil airline industry," Journal of Asian Economics, Elsevier, vol. 77(C).
    9. Gharneh, Naser Shams & Nabavieh, Alireza & Gholamiangonabadi, Davoud & Alimoradi, Mohammad, 2014. "Productivity change and its determinants: Application of the Malmquist index with bootstrapping in Iranian steam power plants," Utilities Policy, Elsevier, vol. 31(C), pages 114-120.
    10. 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.
    11. Yu, Ming-Miin & Chen, Li-Hsueh & Chiang, Hui, 2017. "The effects of alliances and size on airlines’ dynamic operational performance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 197-214.

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