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US all-cargo carriers’ cost structure and efficiency: A stochastic frontier analysis

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  • Balliauw, Matteo
  • Meersman, Hilde
  • Onghena, Evy
  • Van de Voorde, Eddy

Abstract

In this paper, the efficiency of the major US all-cargo carriers, both integrated and non-integrated, is measured and compared through a stochastic frontier analysis based on a translog cost function. Because of the high volatility of all-cargo traffic, especially since the 2008 economic crisis, and the increasing market share of integrators, this industry requires more detailed analysis. By using stochastic frontier analysis in this study, a distinction between random deviations from the production frontier and actual differences in technical efficiency is made. We find that smaller carriers react more flexible to a crisis and that non-integrated carriers are more efficient than the integrators when they are analysed jointly, which is however complicated by their different business models. These findings are not only useful for academics and industry actors, but also for policy makers, since air cargo contributes significantly to the profitability of airlines and airports.

Suggested Citation

  • Balliauw, Matteo & Meersman, Hilde & Onghena, Evy & Van de Voorde, Eddy, 2018. "US all-cargo carriers’ cost structure and efficiency: A stochastic frontier analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 29-45.
  • Handle: RePEc:eee:transa:v:112:y:2018:i:c:p:29-45
    DOI: 10.1016/j.tra.2018.01.005
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    References listed on IDEAS

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    Cited by:

    1. Guangming Rao & Bin Su & Jinlian Li & Yong Wang & Yanhua Zhou & Zhaolin Wang, 2019. "Carbon Sequestration Total Factor Productivity Growth and Decomposition: A Case of the Yangtze River Economic Belt of China," Sustainability, MDPI, Open Access Journal, vol. 11(23), pages 1-28, November.

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