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Operational performance of low-cost carriers and international airlines: New evidence using a bootstrap truncated regression

Author

Listed:
  • Boon Lee

    () (QUT)

  • Andrew Worthington

    () (Griffith University)

Abstract

Between 2001 and 2005, the US airline industry faced financial turmoil. At the same time, the European airline industry entered a period of substantive deregulation. This period witnessed opportunities for low-cost carriers to become more competitive in the market as a result of these combined events. To help assess airline performance in the aftermath of these events, this paper provides new evidence of technical efficiency for 42 national and international airlines in 2006 using the data envelopment analysis (DEA) bootstrap approach first proposed by Simar and Wilson (J Econ, 136:31-64, 2007). In the first stage, technical efficiency scores are estimated using a bootstrap DEA model. In the second stage, a truncated regression is employed to quantify the economic drivers underlying measured technical efficiency. The results highlight the key role played by non-discretionary inputs in measures of airline technical efficiency.

Suggested Citation

  • Boon Lee & Andrew Worthington, 2011. "Operational performance of low-cost carriers and international airlines: New evidence using a bootstrap truncated regression," School of Economics and Finance Discussion Papers and Working Papers Series 271, School of Economics and Finance, Queensland University of Technology.
  • Handle: RePEc:qut:dpaper:271
    as

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    File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2011/WP271.pdf
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    References listed on IDEAS

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    5. Essid, Hédi & Ouellette, Pierre & Vigeant, Stéphane, 2010. "Measuring efficiency of Tunisian schools in the presence of quasi-fixed inputs: A bootstrap data envelopment analysis approach," Economics of Education Review, Elsevier, vol. 29(4), pages 589-596, August.
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    Citations

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    Cited by:

    1. Stephanie McWhinnie & Kofi Otumawu-Apreku, 2013. "The Role of Fixed Cost and Non-Discretionary Variables in Fisheries: A Theoretical and Empirical Investigation," School of Economics Working Papers 2013-14, University of Adelaide, School of Economics.
    2. Gustavo Ferro & Pablo Daniel Monterubbianesi, 2016. "¿Son las aerolíneas latinoamericanas más ineficientes? Estimaciones con fronteras estocásticas," CEMA Working Papers: Serie Documentos de Trabajo. 594, Universidad del CEMA.
    3. He, Haoran & Weng, Qian, 2012. "Ownership, autonomy, incentives and efficiency: Evidence from the forest product processing industry in China," Journal of Forest Economics, Elsevier, vol. 18(3), pages 177-193.
    4. Barros, Carlos P. & Liang, Qi Bin & Peypoch, Nicolas, 2013. "The technical efficiency of US Airlines," Transportation Research Part A: Policy and Practice, Elsevier, vol. 50(C), pages 139-148.

    More about this item

    Keywords

    Data envelopment analysis; efficiency; airlines; bootstrap truncated regression; non-discretionary inputs.;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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