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.
During the past 30 years, air cargo has evolved from a by-product to a potential profit centre for airlines. However, the success in the air cargo business depends on a number of factors. The evolution of world merchandise trade and particularly, the trade in high-value goods, is one of the determinants of the demand for air freight services. This paper provides an insight into the relationship between air cargo and merchandise trade on an aggregated as well as on a disaggregated level. Special attention is paid to the air cargo flows between major regions. By combining several levels of the air cargo market, this paper explains part of the economic rationality behind the air cargo market structure. The results of this paper will lead to a better knowledge of the air cargo sector, not only by academics but also by industry actors.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.