A productivity comparison of the world's major airlines

Oum, Tae Hoon; Yu, Chunyan

doi:10.1016/0969-6997(96)00007-5

Cited by 144 publications

(101 citation statements)

References 9 publications

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“…Fethi et al (2001) looked at 17 European carriers for 1991 and 1995 and found that by 1995 it was too soon find any improved efficiency. Oum and Yu (1995) analyzed 23 airlines over the period from 1986 to 1993 and found that that most improved their TFP with European airlines, in particular, having had low indexes in 1986. Fare et al (2007) studied the effects of deregulation on the productivity of 13 US airlines.…”

Section: Introductionmentioning

confidence: 99%

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

Barbot

Costa

Sochirca

2008

Journal of Air Transport Management

178

100

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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.

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Section: Introductionmentioning

confidence: 99%

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

Barbot

Costa

Sochirca

2008

Journal of Air Transport Management

178

100

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“…1 US research also demonstrated that certain feared outcomes of liberalisation -such as declines in safety levels, or deprivation of small communities of air service -did not materialise. 2 Only a few quantitative analyses have documented the implications of airline competition for efficiency and airfares in other parts of the OECD, such as the trans-Pacific routes (Gillen et al, 1998;Kissling, 1998) and the European internal market (Marin, 1995;Morrell, 1998), while a monographic analysis looked at the productivity performances of large-sized international airlines (Oum and Yu, 1998).…”

Section: Introductionmentioning

confidence: 99%

Regulation, market structure and performance in air passenger transportation

Gönenç

Nicoletti

2003

OECD Economic Studies

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The paper uses a data base on regulation, market structure and performance in the air passenger transportation industry, to analyse the links among liberalisation, private ownership, competition, efficiency and airfares at national and route levels. Covering the 1996-97 travel season, 21 aggregate indicators have been developed for 27 OECD countries, and 23 micro indicators for 102 air routes connecting 14 major international airports. These data are summarised by means of factor analysis. Controlling for market size, network length and other technological and economic differences, and combining national and route-level characteristics, cross-country and cross-route regressions show that i) productive efficiency increases and fares decline when regulations and market structures become more friendly to competition; ii) productive efficiency is sensitive to actual competitive pressures, as proxied by market concentration; iii) fares react to liberalisation independently from market structure, but in liberal environments their decline is amplified by actual competition between carriers; iv) business and economy fares tend to decline when they are liberalised and market concentration is reduced, but tend to increase when markets are dominated by airline alliances on the route; v) discount fares are affected by the overall market environment at route ends, charter regulations and the actual presence of challenger airlines on the route; and vi) airport congestion and dominance tend to increase fares in time-sensitive market segments.

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“…Another factor that can cause this imbalance is the fact that North American airlines are more efficient than the airlines of countries with which the US concluded open skies agreements. In fact, Oum and Yu (1995) argue that before the EU deregulation European airlines were considered inefficient and although European airlines have increased their efficiency since 1987, they continued in 1993 to be less efficient than North American companies. According to Oum and Yu (1995), also With regard to prices charged by airlines, Cristea and Hummels (2011) find evidence that the liberalisation of an air transport market should lead to a small direct effect (decrease of 1.6% on average) due to factors such as increased competition or cost synergies caused by the formation of airline alliances.…”

Section: Some Evidence Regarding the Effects Of Open Skies Agreementsmentioning

confidence: 99%