IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v52y2016icp99-110.html
   My bibliography  Save this article

A comparative performance analysis of airline strategic alliances using data envelopment analysis

Author

Listed:
  • Min, Hokey
  • Joo, Seong-Jong

Abstract

As “open skies†agreements became more common among different countries and thus began to open up international routes to further competition, the global airline industry has undergone accelerated structural changes for the last two decades. These changes include the consolidation and expansion of airline strategic alliances throughout different regions of the world. Though airline strategic alliances are generally perceived to be a major driver for enhancing the operating efficiency and the subsequent competitiveness of participating member airlines, the concrete evidence supporting such a perception is still lacking in the literature. This paper is one of few attempts to evaluate the comparative efficiency of the strategic alliances among global airlines and then assess the managerial impact of airline alliances on the airline's comparative performances.

Suggested Citation

  • Min, Hokey & Joo, Seong-Jong, 2016. "A comparative performance analysis of airline strategic alliances using data envelopment analysis," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 99-110.
  • Handle: RePEc:eee:jaitra:v:52:y:2016:i:c:p:99-110
    DOI: 10.1016/j.jairtraman.2015.12.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699715001404
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zou, Li & Oum, Tae H. & Yu, Chunyan, 2011. "Assessing the price effects of airline alliances on complementary routes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(3), pages 315-332, May.
    2. Mette Asmild & Jens Hougaard & Dorte Kronborg, 2013. "Do efficiency scores depend on input mix? A statistical test and empirical illustration," Annals of Operations Research, Springer, vol. 211(1), pages 37-48, December.
    3. Charnes, Abraham & Gallegos, Armando & Li, Hongyu, 1996. "Robustly efficient parametric frontiers via Multiplicative DEA for domestic and international operations of the Latin American airline industry," European Journal of Operational Research, Elsevier, vol. 88(3), pages 525-536, February.
    4. Barros, Carlos Pestana & Peypoch, Nicolas, 2009. "An evaluation of European airlines' operational performance," International Journal of Production Economics, Elsevier, vol. 122(2), pages 525-533, December.
    5. Oum, Tae H. & Park, Jong-Hun & Kim, Kwangsoo & Yu, Chunyan, 2004. "The effect of horizontal alliances on firm productivity and profitability: evidence from the global airline industry," Journal of Business Research, Elsevier, vol. 57(8), pages 844-853, August.
    6. Sjögren, Stefan & Söderberg, Magnus, 2011. "Productivity of airline carriers and its relation to deregulation, privatisation and membership in strategic alliances," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(2), pages 228-237, March.
    7. Olivier Armantier & Oliver Richard, 2008. "Domestic airline alliances and consumer welfare," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 875-904, September.
    8. Haas, David A. & Murphy, Frederic H., 2003. "Compensating for non-homogeneity in decision-making units in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 144(3), pages 530-544, February.
    9. Adler, Nicole & Golany, Boaz, 2001. "Evaluation of deregulated airline networks using data envelopment analysis combined with principal component analysis with an application to Western Europe," European Journal of Operational Research, Elsevier, vol. 132(2), pages 260-273, July.
    10. Goncalves, Olga, 2013. "Efficiency and productivity of French ski resorts," Tourism Management, Elsevier, vol. 36(C), pages 650-657.
    11. Oum, Tae Hoon & Yu, Chunyan & Zhang, Anming, 2001. "Global airline alliances: international regulatory issues," Journal of Air Transport Management, Elsevier, vol. 7(1), pages 57-62.
    12. Philip G. Gayle, 2008. "An Empirical Analysis of the Competitive Effects of the Delta/Continental/Northwest Code-Share Alliance," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 743-766, November.
    13. Barbot, Cristina & Costa, Ã lvaro & Sochirca, Elena, 2008. "Airlines performance in the new market context: A comparative productivity and efficiency analysis," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 270-274.
    14. Hannegan, Timothy F & Mulvey, Francis P, 1995. "International airline alliances An analysis of code-sharing's impact on airlines and consumers," Journal of Air Transport Management, Elsevier, vol. 2(2), pages 131-137.
    15. Iatrou, Kostas & Alamdari, Fariba, 2005. "The empirical analysis of the impact of alliances on airline operations," Journal of Air Transport Management, Elsevier, vol. 11(3), pages 127-134.
    16. Sengupta, Jati K., 1999. "A dynamic efficiency model using data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 62(3), pages 209-218, September.
    17. Kleymann, Birgit & Seristö, Hannu, 2001. "Levels of airline alliance membership: balancing risks and benefits," Journal of Air Transport Management, Elsevier, vol. 7(5), pages 303-310.
    18. Brueckner, Jan K & Whalen, W Tom, 2000. "The Price Effects of International Airline Alliances," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 503-545, October.
    19. Scheraga, Carl A., 2004. "Operational efficiency versus financial mobility in the global airline industry: a data envelopment and Tobit analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(5), pages 383-404, June.
    20. Wan, Xiang & Zou, Li & Dresner, Martin, 2009. "Assessing the price effects of airline alliances on parallel routes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 627-641, July.
    21. Sjögren, Stefan & Söderberg, Magnus, 2011. "Productivity of airline carriers and its relation to deregulation, privatisation and membership in strategic alliances," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(2), pages 228-237, March.
    22. Tiernan, Siobhan & Rhoades, Dawna & Waguespack, Blaise, 2008. "Airline alliance service quality performance—An analysis of US and EU member airlines," Journal of Air Transport Management, Elsevier, vol. 14(2), pages 99-102.
    23. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    24. Cordero, José Manuel & Santín, Daniel & Sicilia, Gabriela, 2015. "Testing the accuracy of DEA estimates under endogeneity through a Monte Carlo simulation," European Journal of Operational Research, Elsevier, vol. 244(2), pages 511-518.
    25. Wassmer, Ulrich & Meschi, Pierre-Xavier, 2011. "The effect of code-sharing alliance formations and terminations on firm value: The role of co-specialization and scope extension," Journal of Air Transport Management, Elsevier, vol. 17(5), pages 305-308.
    26. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    27. Mahajan, Jayashree, 1991. "A data envelopment analytic model for assessing the relative efficiency of the selling function," European Journal of Operational Research, Elsevier, vol. 53(2), pages 189-205, July.
    28. Park, Jong-Hun, 1997. "The effects of airline alliances on markets and economic welfare," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(3), pages 181-195, September.
    29. O’Connell, John F. & Williams, George, 2005. "Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 259-272.
    30. Ruggiero, John, 1999. "Efficiency estimation and error decomposition in the stochastic frontier model: A Monte Carlo analysis," European Journal of Operational Research, Elsevier, vol. 115(3), pages 555-563, June.
    31. Lin, Ming Hsin, 2008. "Airline alliances and entry deterrence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(4), pages 637-652, July.
    32. Botti, Laurent & Briec, Walter & Cliquet, Gérard, 2009. "Plural forms versus franchise and company-owned systems: A DEA approach of hotel chain performance," Omega, Elsevier, vol. 37(3), pages 566-578, June.
    33. Laurent Botti & Walter Briec & Gérard Cliquet, 2009. "Plural forms versus franchise and company-owned systems:ADEAapproach of hotel chain performance," Post-Print halshs-00348088, HAL.
    34. Dennis, Nigel, 2000. "Scheduling issues and network strategies for international airline alliances," Journal of Air Transport Management, Elsevier, vol. 6(2), pages 75-85.
    35. Goh, Kevin & Uncles, Mark, 2003. "The benefits of airline global alliances: an empirical assessment of the perceptions of business travelers," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(6), pages 479-497, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Law, Kris M.Y. & Breznik, Kristijan, 2018. "What do airline mission statements reveal about value and strategy?," Journal of Air Transport Management, Elsevier, vol. 70(C), pages 36-44.
    2. Barak, Sasan & Dahooei, Jalil Heidary, 2018. "A novel hybrid fuzzy DEA-Fuzzy MADM method for airlines safety evaluation," Journal of Air Transport Management, Elsevier, vol. 73(C), pages 134-149.
    3. Mahmoudi, Reza & Emrouznejad, Ali & Shetab-Boushehri, Seyyed-Nader & Hejazi, Seyed Reza, 2020. "The origins, development and future directions of data envelopment analysis approach in transportation systems," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    4. Cobeña, Mar & Gallego, à ngeles & Casanueva, Cristóbal, 2019. "Diversity in airline alliance portfolio configuration," Journal of Air Transport Management, Elsevier, vol. 75(C), pages 16-26.
    5. Gudiel Pineda, Pedro Jose & Liou, James J.H. & Hsu, Chao-Che & Chuang, Yen-Ching, 2018. "An integrated MCDM model for improving airline operational and financial performance," Journal of Air Transport Management, Elsevier, vol. 68(C), pages 103-117.
    6. 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, Open Access Journal, vol. 12(15), pages 1-15, August.
    7. 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.
    8. Choi, Kanghwa, 2017. "Multi-period efficiency and productivity changes in US domestic airlines," Journal of Air Transport Management, Elsevier, vol. 59(C), pages 18-25.
    9. Kuljanin, Jovana & Kalić, Milica & Caggiani, Leonardo & Ottomanelli, Michele, 2019. "A comparative efficiency and productivity analysis: Implication to airlines located in Central and South-East Europe," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 152-163.
    10. Andreea Marin-Pantelescu, 2016. "The Pricing Evolution in the Air Transportation Industry. Implication for the Romanian Tourism Sector in the Era of Globalization," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 2(2), pages 88-99, June.
    11. Castiglioni, Marco & Gallego, à ngeles & Galán, José Luis, 2018. "The virtualization of the airline industry: A strategic process," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 134-145.
    12. Belén Payán-Sánchez & Miguel Pérez-Valls & José Antonio Plaza-Úbeda, 2019. "The Contribution of Global Alliances to Airlines’ Environmental Performance," Sustainability, MDPI, Open Access Journal, vol. 11(17), pages 1-16, August.
    13. Never, Jan & Suau-Sanchez, Pere, 2020. "Challenging the interline and codeshare legacy: Drivers and barriers for airline adoption of airport facilitated inter-airline network connectivity schemes," Research in Transportation Economics, Elsevier, vol. 79(C).
    14. Lee, C.K.M. & Ng, K.K.H. & Chan, Hing Kai & Choy, K.L. & Tai, W.C. & Choi, L.S., 2018. "A multi-group analysis of social media engagement and loyalty constructs between full-service and low-cost carriers in Hong Kong," Journal of Air Transport Management, Elsevier, vol. 73(C), pages 46-57.
    15. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:52:y:2016:i:c:p:99-110. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.