The cost allocation approach of airport service activities

•Cost allocation between input resources and output activities is examined.•A DEA model with two regression estimators is presented.•The DEA outcomes reflect terminal expansion and cost allocation management to increase airport efficiency.•The regression reveals issues concerning the apron fee measurement.

This study suggests a new allocation approach to the joint costs between airports and airlines and proposes estimates for airport service costs. Using correlation coefficients, data envelopment analysis and regression models, the research measures the relation and efficiency between service activity and airport operation costs. The regression outcomes not only reveal a significant management issue concerning the apron fee measurement, but also show that the airport physical activity cost drivers need to be considered with cost and revenue management. The DEA outcomes reflect the expansion of the terminal areas.