Airlines performance in the new market context: A comparative productivity and efficiency analysis

This paper analyses airlines’ efficiency and productivity using two different methodologies: data envelopment analysis and total factor productivity, and we additionally investigate which factors account for differences in efficiency. Our main findings show that low-cost carriers are in general more efficient than full-service carriers, efficiency and the dispersion of both data envelopment analysis and total factor productivity indexes amongst airlines differ according to geographical areas, which may be a result of different legislation and de-regulation processes, and so of specific competitive conditions, labour is the only input that definitively influences productivity, and larger airlines are more efficient, suggesting the existence of economies of scale.