Efficiency analysis of major airlines: exploring the effects of operational performance determinants

In a changing and increasingly competitive era, operational performance evaluation of airlines has become one of the most important research topics. Although there are many studies about the efficiency analysis of airlines in the literature, existing research on the effects of size, business model and alliance membership are relatively scarce. This study evaluates the performance of 38 airlines from different regions of the world between 2015 and 2019 assessing the effects of size, business model and alliance membership on the operational performance of the airlines. In this regard, first, constant returns to scale (CRS) and variable returns to scale (VRS) input-oriented data envelopment analysis (DEA) models with 3 inputs and 2 outputs were implemented. To discriminate between efficient airlines, input-oriented CRS model super-efficiency DEA was also used. The determinants of operational efficiencies were assessed applying Mann-Whitney rank-sum tests. The results of the analyses show that majority of airlines suffer from scale inefficiency. Additionally, it was found that the size of airlines measured in available seat kilometer (ASK) has no statistically significant effect on the performance. On the other hand, low-cost airlines were found to be more efficient than full-service carriers. Lastly, the airlines without alliance membership have performed better than the airlines with alliance membership.