International Air Transportation Carriers: Evidence from SFA and DEA Technical Efficiency Results (1991-2000)

 

 

Panayotis G. Michaelides*, Athena Belegri-Roboli**, Matthew Karlaftis*** and Theocharis Marinos****

*National Technical University of Athens
157.80, Zographou Campus, Athens, Greece
T:+302107721624
F: +302107721618
E: pmichael@central.ntua.gr

**National Technical University of Athens
157.80, Zographou Campus, Athens, Greece
T: +302107721607
F: +302107721618
E: belegri@central.ntua.gr

***National Technical University of Athens
157.80, Zographou Campus, Athens, Greece
T: +302107721280
F: +302107722404
E: mgk@central.ntua.gr

****National Technical University of Athens
157.80, Zographou Campus, Athens, Greece
T: +302107721617
F: +302107721618
E: marintheo@hotmail.com

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Abstract

 

In this paper we estimate technical efficiency in International Air Transport, by means of Stochastic Frontier Analysis (SFA) using a panel set of the world's twenty-four (24) largest network airlines, for the period 1991-2000. The results are compared to those from Data Envelopment Analysis (DEA), a popular approach for efficiency measurement in the literature. Findings suggest that airlines experience constant returns to scale, while technical efficiency ranges between 51% and 97% approximately. Furthermore, the level of technology experienced a slight increase, while the privatization of few of the airlines in the data set didn’t seem to affect their technical efficiency. Results from SFA and DEA do not vary significantly.


 

Keywords: Air Transportation; Technical Efficiency; Stochastic Frontier Analysis; Data Envelopment Analysis; Panel