Stochastic frontier analysis and categorical data envelopment analysis at efficiency modelling: A study on airlines

In this study, it is aimed to perform comparative efficiency analysis of international commercial airlines. Stochastic Frontier Analysis which is a parametric approach and Data Envelopment Analysis which is a non-parametric approach are implemented for efficiency analysis. The dataset of this study consists of 62 international airlines in 2016 by using Bloomberg database, airlines annual reports and other sectoral reports. The data is also classified according to financial, airline specific (operational) and marketing performance indicators and variables. Firstly, efficiency scores of companies are calculated using by Stochastic Frontier Analysis, Categorical Data Envelopment Analysis and Super Efficiency Measurement methods. In the following stage, companies are compared within the methods for each dimension in order to evaluate the efficiencies from different perspectives. Later, the airlines are compared according to models which are created with different methods under the same dimensions to examine how companies' efficiency changed in point of methods. As a result, it is found that American airline carriers are financially efficient companies, while European and Far Eastern companies are efficient in marketing and operational dimensions.