Evaluating air carrier fuel efficiency in the US airline industry

Transportation Research Part A: Policy and Practice

Volumn 59, Issue , 2014, Pages 306-330

  Zou, Bo ^a   Elke, Matthew ^b   Hansen, Mark ^b   Kafle, Nabin ^a  

^a University of Illinois at Chicago   (United States)

^b 109 McLaughlin Hall   (United States)

Author keywords

Airline fuel efficiency; Frontier model; Mainline airline; Regional carrier; Routing circuity

Indexed keywords

EFFICIENCY; FUELS; STOCHASTIC SYSTEMS;

FUEL EFFICIENCY; JOINT EFFICIENCIES; REGIONAL CARRIERS; REVENUE-PASSENGER MILES; ROUTING CIRCUITY; ROUTING STRUCTURES; STOCHASTIC FRONTIER APPROACHES; US AIRLINE INDUSTRY;

AIR TRANSPORTATION;

ACCESSIBILITY; AIRLINE INDUSTRY; ENERGY EFFICIENCY; FUEL CONSUMPTION; HUB AND SPOKE NETWORK; STOCHASTICITY;

UNITED STATES;

EID: 84891706744     PISSN: 09658564     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.tra.2013.12.003     Document Type: Article

References (49)

1. Aigner D., Lovell C.A., Schmidt P. Formulation and estimation of stochastic frontier production function models. J. Econom. 1977, 12:21-37.
2. Alam I., Sickles R. The relationship between stock market returns and technical efficiency innovations: evidence from the US airline industry. J. Prod. Anal. 1998, 9:35-51.
3. Assaf A. Are U.S. airlines really in crisis?. Tourism Manage. 2009, 30(6):916-921.
4. Babikian R., Lukachko S.P., Waitz I.A. The historical fuel efficiency characteristics of regional aircraft from technological, operational, and cost perspectives. J. Air Transport Manage. 2002, 8:389-400.
5. Battese, G., Coelli, T., 1993. A Stochastic Frontier Production Function Incorporating a Model for Technical Inefficiency Effect. Working Paper. Department of Economics, University of New England. New South Wales, Australia.
6. Battese G., Heshmati A., Hjalmarsson L. Efficiency of labour use in the Swedish banking industry: a stochastic frontier approach. Empirical Econ. 2000, 25:623-640.
7. Bureau of Transportation Statistics (BTS), 2011. Air Carrier Financial Reports (Form 41 Financial Data). (accessed 10.07.12). http://www.transtats.bts.gov/databases.asp?ModeID=1&Mode_Desc=Aviation&Subject_ID2=0.
8. Bureau of Transportation Statistics (BTS), 2012. Air Carrier Financial: Schedule P-5.2. (accessed 08.08.12). http://www.transtats.bts.gov/Fields.asp?Table_ID=297.
9. Caves D.W., Christensen L.R., Tretheway M.W. US trunk air carriers, 1972-1977: a multilateral comparison of total factor productivity. Productivity Measurement in Regulated Industries 1981, 47-77. Academic Press, New York. T.G. Cowing, R.E. Stevenson (Eds.).
10. Caves D., Christensen L., Tretheway M. Economies of density versus economies of scale: why trunk and local service airline costs differ. Rand J. Econ. 1984, 15:471-489.
11. Coelli T., Perelman S., Romano E. Accounting for environmental influences in stochastic frontier models: with application to international airlines. J. Prod. Anal. 1999, 11:251-273.
12. Coelli T., Grifell-Tatje E., Perelman S. Capacity utilisation and profitability: a decomposition of short-run profit efficiency. Int. J. Prod. Econ. 2002, 79:261-278.
13. Cooper W., Seiford L., Tone K. Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEA-Solver Software 2007, Springer, New York. second ed.
14. Data Base Products, 2011. Air Carrier Financial Reports (Form 41 Financial Data) CD-ROM.
15. Distexhe V., Perelman S. Technical efficiency and productivity growth in an era of deregulation: the case of airlines. Swiss J. Econ. Stat. 1994, 130(4):669-689.
16. Energy Information Agency (EIA), 2012. Voluntary Reporting of Greenhouse Gases Program Fuel Emission Coefficients. (accessed 02.08.12). http://www.eia.gov/oiaf/1605/coefficients.html.
17. Fare R., Grosskopf S., Sickles R. Productivity of US airlines after deregulation. J. Transport Econ. Policy 2007, 41(1):93-112.
18. Forbes S., Lederman M. The role of regional airlines in the U.S. airline industry. Advances in Airline Economics 2005, vol. 2. Elsevier.
19. Gathon H., Perelman S. Measuring technical efficiency in European Railways: a panel data approach. J. Prod. Anal. 1992, 3:135-151.
20. Gillen D., Oum T., Tretheway M. Airline cost and Performance: Implications for Pubic and Industry Policies 1985, Center for Transportation Studies, University of British, Columbia.
21. Gillen D., Oum T., Tretheway M. Airline cost structure and policy implications: a multi-product approach for Canadian airlines. J. Transport Econ. Policy 1990, 24:9-34.
22. Greenstone, M., Kopits, E., Wolverton, A., 2011. Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation. NBER Working Paper. (accessed 02.07.12). http://www.nber.org/papers/w16913.pdf.
23. Hansen M., Gillen D., Djafarian-Tehrani R. Aviation infrastructure performance and airline cost: a statistical cost estimation approach. Transp. Res. Part E 2001, 37:1-23.
24. Hensher D. Productivity and performance: editorial. Transp. Res. Part A 1992, 26(6):433-434.
25. Inglada V., Rey B., Rodriguez-Alvarez A., Coto-Millan P. Liberalisation and efficiency in international air transport. Transp. Res. Part A: Policy Practice 2006, 40:95-105.
26. International Air Transport Association (IATA), 2012. Fact Sheet: Carbon Offset. (accessed 09.08.12). https://www.iata.org/pressroom/facts_figures/fact_sheets/pages/carbon-offsets.aspx.
27. Karlaftis M., Tsamboulas D. Efficiency measurement in public transport: are findings specification sensitive?. Transp. Res. Part A 2012, 46:392-402.
28. Kumbhakar S., Lovell C. Stochastic Frontier Analysis 2003, Cambridge University Press, Cambridge.
29. Liu Z., Lynk E.L. Evidence on market structure of the deregulated US airline industry. Appl. Econ. 1999, 31(9):1083-1092.
30. Litman, T., 2011. Measuring Transportation: Traffic, Mobility and Accessibility. (accessed 02.08.12). http://www.vtpi.org/measure.pdf.
31. Lozano S., Gutierrez E. A multiobjective approach to fleet, fuel and operating cost efficiency of European airlines. Comput. Ind. Eng. 2011, 61:473-481.
32. Merkert R., Hensher D. The impact of strategic management and fleet planning on airline efficiency-a random effects Tobit model based on DEA efficiency scores. Transp. Res. Part A: Policy Practice 2011, 45:686-695.
33. Michaelides P., Belegri-Roboli A., Karlaftis M., Marinos T. International air transportation carriers: evidence from SFA and DEA technical efficiency results (1991-2000). Eur. J. Transport Infrastruct. Res. 2009, 9(4):347-362.
34. Miyoshi, C., Merkert, R., 2010. Changes in carbon efficiency, unit cost of firms over time and the impacts of the fuel price-an empirical analysis of major European airlines. In: Proceedings of the 14th Air Transport Research Society (ATRS) World Conference, Porto, Portugal.
35. 2emissions reduction through the use of larger jet aircraft. J. Air Transport Manage. 2009, 15:151-157.
36. Oum T., Waters W., Yu C. A survey of productivity and efficiency measurement in rail transport. J. Transport Econ. Policy 1999, 33:9-42.
37. Oum T., Fu X., Yu C. New evidences on airline efficiency and yields: a comparative analysis of major North American air carriers and its implications. Transp. Policy 2005, 12:153-164.
38. Oum T., Yu C. A productivity comparison of the world's major airlines. J. Air Transport Manage. 1995, 2(3/4):181-195.
39. Oum T., Yu C. Cost competitiveness of major airlines: an international comparison. Transp. Res. Part A 1998, 32:407-422.
40. Ray S.C. The directional distance function and measurement of super-efficiency: an application to airlines data. J. Oper. Res. Soc. 2008, 59:788-797.
41. Schefczyk M. Operational performance of airlines: an extension of traditional measurement paradigms. Strateg. Manag. J. 1993, 14(4):301-317.
42. Scheraga C. Operational efficiency versus financial efficiency mobility in the global airline industry: a data envelopment and Tobit analysis. Transp. Res. Part A: Policy Practice 2004, 38:383-404.
43. Sjögren S., Söderberg M. Productivity of airline carriers and its relation to deregulation, privatisation and membership in strategic alliances. Transp. Res. Part E: Log. Transp. Rev. 2012, 47:228-237.
44. Stevenson R. Likelihood functions for generalized stochastic frontier estimation. J. Econom. 1980, 13:57-66.
45. Tofallis C. Input efficiency profiling: an application to airlines. Comput. Oper. Res. 1997, 24(3):253-258.
46. Truit L., Hayes R. Evaluating service quality and productivity in the regional airline industry. Transp. J. 1994, 33:21-32.
47. Windle R. The world's airlines: a cost and productivity comparison. J. Transport Econ. Policy 1991, 25(1):31-49.
48. Windle R., Dresner M. Partial productivity measures and total factor productivity in the air transport industry: limitations and uses. Transp. Res. Part A 1992, 26:435-445.
49. Zou B., Hansen M. Impact of operational performance on air carrier cost structure: evidence from us airlines. Transp. Res. Part E 2012, 48:1032-1048.