Testing Efficiency On Low Cost Carriers: An Application Of Robust Data Envelopment Analysis

Abstract National airlines operate in a highly competitive environment. EU airlines face a challenge to compete with low cost carriers, as a result of the liberalization process in the sector. European flag airlines of non-EU member states, not benefiting from liberalization, are forced to compete internationally. This research is focused on national carriers, as they provide the majority of service to and from central and regional airports. Therefore, to establish the most efficient entities on the passenger air transport market, DEA (Data Envelopment Analysis) methodology, has been utilized. The purpose of this paper is to evaluate the effectiveness of 29 chosen national airlines in Europe in the year 2013, using the DEA approach, to pinpoint the subset of fully-efficient market leaders, as well as potential sources of inefficiency, among less effective carriers. The analysis incorporates information on inputs (e.g. fleet, number of employees, number of countries and airports served) and outputs (revenue, annual passengers carried, load factor). The results show that more than 40% (12 of 29) researched airlines are effective and the other 34% are near-efficient. Moreover, outcomes suggest that “going big” may not increase effectiveness. It is harder to achieve full efficiency for big carriers than small ones.

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The Performance Analysis of Beibu Gulf airlines Based on DEA Model during the Pre-COVID-19 Pandemic Period

CONVERTER ◽

10.17762/converter.284 ◽

2021 ◽

pp. 230-235

Author(s):

Yichia Lin, Wenlung Chang, Wongchai Anupong, Bowen Long

Keyword(s):

Data Envelopment Analysis ◽

Low Cost ◽

Spare Parts ◽

Aviation Fuel ◽

Operational Performance ◽

Civil Aviation ◽

Aviation Industry ◽

Beibu Gulf ◽

Data Envelopment ◽

Dea Model

During the COVID-19 pandemic period, all airlines experienced a severe impact and the route operating cost is very susceptible to the impact of flight duration and aviation fuel prices. This paper analyzes the operation performance of Beibu Gulf airlines (low cost airline company) with data envelopment analysis CCR model in pre-COVID-19 pandemic period. Under the domestic vigorous promotion of tourism development and people's huge demand for travel, the airlines in mainland China continue rapid development, which accelerates the emergence of local airlines other than the four major airlines and leads to increasingly fierce operation competition in the civil aviation industry. Behind the competition among airlines, the operational performance of airlines can best reflect the company's development status. In this context, airlines should choose appropriate operational strategies to strengthen its competitiveness and operational capabilities. The DEA model is a mature input-output research tool, and there have been many studies related to operational performance of the aviation industry. By using Data Envelopment Analysis (DEA) solver software, the input and output indicators from 2017 to 2019 are analyzed. Preliminary results show that routes and oil price factors have not reached effective status. Beibu Gulf Airlines gradually shifts to low-cost mode, the faced challenges are as follows: 1. The competition among domestic low-cost airlines; 2. The current poor overall service quality of low-cost airlines as evaluated by customers; 3. How to arrange routes, flight, service strategy, etc. Airbus uses enhanced aviation systems for this series of aircraft to improve the overall reliability of the aircraft, reduce maintenance and spare parts costs, thus helping airlines greatly reduce maintenance costs, which is very beneficial to low-cost airlines. Based on this, this paper puts forward some suggestions, such as optimizing routes, developing feeder flights in second tier cities of popular destinations, controlling fuel costs, making low-cost aviation fuel reserves, reducing the weight of passengers' carry-on luggage or charging additional baggage charges.

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Impacton Operational Efficiency Of Threemajor Private Airlines With Respect To Indian Aviation Industry

Restaurant Business ◽

10.26643/rb.v118i2.7629 ◽

2019 ◽

Vol 118 (2) ◽

pp. 108-123

Author(s):

Sreelakshmi. G ◽

. P. Balasubramanian

Keyword(s):

Economic Growth ◽

Financial Performance ◽

Low Cost ◽

Operational Efficiency ◽

Aviation Industry ◽

Data Envelopment ◽

Ratio Analysis ◽

Output Factor ◽

Low Cost Carriers ◽

Efficiency Data

The Aviation industry is one of the largest industries that is contributing to the economic growth of a nation.This industry has gone through various stages like de-regulation, privatization,emergence of Low Cost Carriers etc. This paper focuses on analyzing the financial performance and operational efficiency (te) of three major private airlines in India namely Indigo Airlines, Jet Airways and Spice Jet.For analysing the financial performance the technique of ratio analysis has been used and for analyzing the operational efficiency Data Envelopment Analysis (DEA) has been used. This study has used VRS model of DEA by taking into account two input factors and one output factor. On the basis of the factors considered it has been observed that operational efficiency of Jet Airways is better compared to other two airlines.

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Efficiency Evaluation of Low-Cost Long-Haul Carriers in the Trans-Atlantic and Asia-Pacific Markets

International Journal of Aviation Systems Operations and Training ◽

10.4018/ijasot.2016010103 ◽

2016 ◽

Vol 3 (1) ◽

pp. 34-48

Author(s):

Jennifer N. Hunt ◽

Karlene Petitt ◽

Dothang Truong

Keyword(s):

Relative Efficiency ◽

Low Cost ◽

Business Environment ◽

Asia Pacific ◽

Load Factor ◽

Data Envelopment ◽

Efficiency Evaluation ◽

Total Revenue ◽

Low Cost Carriers ◽

Dea Models

There has been a resurgence of interest in low-cost long-haul (LCLH) operations as airlines seek new growth opportunities. However, researchers have yet to evaluate and compare the relative efficiency of LCLH carriers in this competitive business environment. The purpose of this paper was to determine the relative efficiency of LCLH carriers in the Trans-Atlantic and Asia-Pacific markets. Data Envelopment Analysis (DEA) models were developed to compare the efficiency of five low-cost carriers: AirAsia X, Cebu Pacific, Norwegian Air, WestJet, current LCLH carriers, and JetBlue, a prospective LCLH carrier. The key findings from this DEA were that AirAsia X, Norwegian Air, and JetBlue were relatively efficient for all four quarters, whereas, Cebu Pacific was relatively efficient for three out of four quarters, while WestJet was relatively inefficient. Recommendations include suggestions for WestJet to lower its cost structure, and increase load factor, revenue passenger miles, and total revenue to achieve success with LCLH operations.

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