Measurement of airlines’ capacity utilization and cost gap: Evidence from low-cost carriers

A longitudinal Perspective on Efficiency of Airlines in Europe and the U.S

“…Fuel presents one of the most critical materials for an airline operation. The selection of this variable is consistent with prior studies (Tsionas et al, 2017;Cao et al, 2015;Gramani, 2012;Chow, 2010;Yu et al, 2016;Cui and Li, 2017). Besides labor and material inputs, capital input is another critical component for airline operations.…”

“…Regarding input variables, three inputs were chosen, namely full-time equivalent employees, fuel consumption, and available seat miles (ASMs). The variable of labor has been commonly used as input in efficiency evaluation in the airline industry (Assaf and Josiassen, 2012;Merkert and Williams, 2013;Yu et al, 2016;Chang and Yu, 2014;Merkert and Pearson, 2015;Saranga and Nagpal, 2016;Cao et al, 2015;Arjomandi et al, 2018;Barros and Wanke, 2015;Kottas and Madas, 2018). Fuel presents one of the most critical materials for an airline operation.…”

“…Besides labor and material inputs, capital input is another critical component for airline operations. Following Merkert and Pearson (2015), Yu et al (2016), Saranga and Nagpal (2016), Barros and Couto (2013), ASM was treated as capital input. Regarding the output variable, revenue-passenger miles (RPMs) were chosen, representing the passenger traffic volume handled by an airline.…”

Technical Measure of Capacity Utilization in Two-Stage Production Systems: A Data Envelopment Analysis Approach

“…According to table (2), due to taking or ignoring the intermediate measures, the CU value for special DMU is not necessarily the same in the both positions. For example consider 24 , regarding the assessment of this unit in two-stage position = 1 i.e., even with employing the current fixed inputs it is unable to produce more output whereas if it is analyzed in black box form, its CU is less than 1 and has excess capacity in black box position. Namely this firm possesses a potential to produce more output with the current fixed inputs.…”

Impact of alliances and delay rate on airline performance

“…Global aviation deregulation made the aviation industry more competitive and led to increased mergers, acquisitions, and alliances by the larger international airlines, which increased the research focus on aviation efficiency and productivity (Barbot et al, 2008; Barros et al, 2013; Chang & Lee, 2012; Chen & Chiou, 2006; Chow, 2010; Cui et al, 2016; Greer, 2009; Gong & Kim, 2015; Hu et al, 2017; Inglada et al, 2006; Jain & Natarajan, 2015; Lee & Worthington, 2014; Li et al, 2015, 2016; Mallikarjun, 2015; Martín & Román, 2006; Merkert & Pearson, 2015; Mhlanga, 2018; Omrani & Soltanzadeh, 2016; Ouellette et al, 2010; Pacheco & Fernandes, 2003; Scheraga, 2004; Tan & Chen, 2011; Tavassoli et al, 2014; Wanke & Barros, 2016; Wu et al, 2013; Wu & Liao, 2014; Yu et al, 2016; Żółtaszek & Pisarek, 2016; Zhu, 2011), with some studies examining the advantages and disadvantages of global strategic aviation alliances. For example, Varadarajan and Cunningham (1995) examined whether alliance operations reduced costs, Eisenhardt and Schoonhoven (1996) found that the shared resources available to alliances increased profit, and Porter and Fuller (1986) assessed whether strategic alliances reduced market risk; however, some studies (Hamel et al, 1989; Robinson, 1988; Williamson & Ouchi, 1981) found that strategic alliances had negative impacts on business operations.…”