Airlines performance in the new market context: A comparative productivity and efficiency analysis.

Abstract

This paper analyses airlines’ efficiency and productivity using two different methodologies: data envelopment analysis and total factor productivity, and we additionally investigate which factors account for differences in efficiency. Our main findings show that low cost carriers are in general more efficient than full service carriers, efficiency and the dispersion of both data envelopment analysis and total factor productivity indexes amongst airlines differ according to geographical areas, which may be a result of different legislation and de-regulation processes, and so of specific competitive conditions, labour is the only input that definitively influences productivity, and larger airlines are more efficient, suggesting the existence of economies of scale.