DYNAMIC MODEL OF PERFORMANCE MEASUREMENT OF MIDDLE EAST AIRLINES
Abstract
Over the past decades, the rapid development of the airline industry has occurred in the Middle East and particularly in the United Arab Emirates. The need for the development of the aviation sector has emerged due to the strategically important position that Middle East occupies as the central point between the eastern and western hemispheres. Its major airlines, so called Middle East Big Three (MEB3) - Emirates, Etihad and Qatar Airways, have become dominant in the region, as well as across the globe, primarily thanks to the high quality of their services and globally recognized brand. The focus of the assessment are the airlines’ non-financial performance indicators, such as: the number of carried passengers and cargo, number of employees, serving destinations, fleet size, etc. The analysis covered a period of twelve years, starting from 2005 until 2016, which was characterized by the expansion of these airlines. For each observed company, the efficiency was first separately measured using the Data Envelopment Analysis (DEA) method, followed by the dynamic analysis and measurement of their efficiencies using the DEA Window analysis. In both cases, Emirates Airlines had the best performance.
Keywords
Full Text:
PDFReferences
Аl-Sayeh, K. (2014). The Rise of the Emerging Middle East Carriers: Outlook and Implications for the Global Airline Industry, Massachusetts Institute of Technology, http://hdl.handle.net/1721.1/89852
Asaftei, G., Kumbhakar, C. S. (2008). Regulation and efficiency in transition: the case of Romanian banks, Journal of Regulatory Economics, 33, 253-282, https://doi.org/10.1007/s11149-007-9041-0
Baker, D. A. (2013). Service Quality and Customer Satisfaction in the Airline Industry: A Comparison between Legacy Airlines and Low-Cost Airlines, American Journal of Tourism Research, 2(1), 67-77, https://doi.org/10.11634/216837861403317
Banker, R., Cummins, D., Klumpes, P. (2010). Performance Measurement in the Financial Services Sector, Journal of Banking & Finance, 34 (7), 1413-1728, https://doi.org/10.1016/j.jbankfin.2010.02.024
Barbot, C., Costa, A., Sochirca, E. (2008). Airlines performance in the new market context: A comparative productivity and efficiency analysis, Journal of Air Transport Management, 14 (5), 270-274, https://doi.org/10.1016/j.jairtraman.2008.05.003
Barros, C. P, Peypoch, N. (2009). An evaluation of European airlines' operational performance, International Journal of Production Economics, 122, 525–533, https://doi.org/10.1016/j.ijpe.2009.04.016
Charnes, A., Cooper, W.W., Rhodes, E. (1978). Measuring the efficiency of decision making units, European Journal of Operational Research, 2(6), 429-444, https://doi.org/10.1016/0377-2217(78)90138-8
Coli, M., Nissi, E., Rapposelli, A. (2011). Efficiency Evaluation in an Airline Company: Some Empirical Results, Journal of Applied Sciences, 11 (4), 737-742, DOI: 10.3923/jas.2011.737.742
Cook W.D., Seiford L.M. (2009). Data Envelopment Analysis (DEA) – Thirty Years On // – Thirty Years On, European Journal of Operational Research, 192(1), 1–17, https://doi.org/10.1016/j.ejor.2008.01.032
Cooper, W.W., Seiford, L.M., Tone, K. (2007). Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEÀ-Solver Software, 2nd ed., New York, Springer, DOI: 10.1007/978-0-387-45283-8.
Cooper, W. - Seiford, L. - Zhu, J. (2011): Handbook on Data Envelopment Analysis.Springer Science+Business Media, New York.
Dyson, R.G., Allen, R., Camanho, A.S., Podinovski, V.V., Sarrico, C.S., Shale, E.A. (2001). Pitfalls and protocols in DEA, European Journal of Operational Research 132, 245-259, https://doi.org/10.1016/S0377-2217(00)00149-1
Fethi, M. D., Jackson, P., Weyman-Jones, T. G. (2000). Measuring the efficiency of European airlines: an application of DEA and Tobit Analysis, EPRU Discussion Papers, http://hdl.handle.net/2381/370
Grafton, J., Lillis, M. A., Widener, K. S. (2010). The role of performance measurement and evaluation in building organizational capabilities and performance, Accounting, Organizations and Society, 35, 689-706, https://doi.org/10.1016/j.aos.2010.07.004
Groen, B. A. C., Wouters, M. J. F., Wilderom, C. P. M. (2012). Why do employees take more initiatives to improve their performance after co-developing performance measures? A Field study, Management Accounting Research, 23, 120-141, https://doi.org/10.1016/j.mar.2012.01.001
Han, S., Ham, S. S., Yang, I., Baek, S. (2012). Passengers’ perceptions of airline lounge: Importance of attributes that determine usage and service quality measurement, Tourism Management, 33(5), 1103-1111, https://doi.org/10.1016/j.tourman.2011.11.023
Jia, T. - Yuan, H. (2017): The application of DEA (Data Envelopment Analysis) window analysis in the assessment of influence on operational efficiencies after the establishment of branched hospitals. BMC Health Services Research,17:2-8, DOI:10.1186/s12913-017-2203-6
Kennedy, J., Smith, A.S.J. (2004). Assessing the efficient cost of sustaining Britain’s rail network – perspectives based on zonal comparisons, Journal of Transport Economics and Policy, 38(1), 17-23, www.jstor.org/stable/20173052.
Kutlar, A. - Kabasakal, A. - Babacan, A. (2015): Dynamic Efficiency of Turkish Banks: a DEA Window and Malmquist Index Analysis for Period of 2003-2012. Sosyoekonomi, 23(24): 71-97.
Martić, M., Savić, G. (2001). An application of DEA for comparative analysis and ranking of regions in Serbia with regards to social-economic development, EJOR, 129 (3), 344-355, https://doi.org/10.1016/S0377-2217(00)00156-9
Masarrat, G., Jha, S. (2014). Assessing Customer Perception of Service Quality: Comparative Study of Airlines in UAE, World Review of Business Research, 4(2), 291-303.
Mimović, P., Krstić, A. (2016). The Integrated application of the AHP and DEA methods in evaluating the performances of higher education institutions in the Republic of Serbia, Economic horizons, 18 (1), 71-85, DOI:10.5937/ekonhor1601071M
Odeck, J., Alkadi, A. (2004). The performance of subsidized urban and rural public bus operators: Empirical evidence from Norway, Annals of Regional Science, 38(3), 413-431, https://doi.org/10.1007/s00168-003-0152-y
Paradi, J. C., Schaffnit, C. (2004). Commercial branch performance evaluation and results communication in a Canadian bank–– a DEA application, European Journal of Operational Research, 156(39), 719-735, https://doi.org/10.1016/S0377-2217(03)00108-5
Sarkis, J. (2002). Preparing Your Data for DEA, Chapter 4 in Avkiran N.: Productivity Analysis in the Service Sector with Data Envelopment Analysis, 2nd edition, N K Avkiran, UQ Business School, The University of Queensland, Australia.
Sherman, H. D., Zhu, J. (2006). Service Productivity Management: Improving Service Performance Using Data Envelopment Analysis (DEA), Springer Science & Business Media: Boston, MA, USA, DOI: 10.1007/0-387-33231-6
Singh, A. K. (2011). Performance Evaluation of Indian Airline Industry: An Application of DEA, Asia-Pacific Business Review, 7(2), 92-103, https://doi.org/10.1177/097324701100700209
Surovitskikh, S., Lubbe, B. (2008). Positioning of selected Middle Eastern airlines in the South African business and leisure travel environment, Journal of Air Transport Management, 14(2), 75-81, https://doi.org/10.1016/j.jairtraman.2007.12.001
Scheraga, C.A., (2004). Operational efficiency versus financial mobility in the global airline industry: a data envelopment and Tobit analysis, Transportation Research Part A: Policy and Practice 38 (5), 383–404, https://doi.org/10.1016/j.tra.2003.12.003
Tsaur, S.H., Chang, T.Y., Yen, C.H (2002). The evaluation of airline service quality by fuzzy MCDM, Tourism Management, 23, 107-115, https://doi.org/10.1016/S0261-5177(01)00050-4
Tung, A., Baird, K., Schoch, P. H. (2011). Factors influencing the effectiveness of performance measurement systems, International Journal of Operations & Production Management, 31(12), 1287-1310, https://doi.org/10.1108/01443571111187457
Wang, K. - Shiwei, Y. - Zhang, W. (2013): China’s regional energy and environmental efficiency: A DEA window analysis based dynamic. Mathematical and Computer Modelling, 58:1117-1127, https://doi.org/10.1016/j.mcm.2011.11.067
Yang, H. - Chang, C. (2009): Using DEA window analysis to measure efficiencies of Taiwan’s integrated telecommunication firms. Telecommunication Policy, 33:98 – 108, https://doi.org/10.1016/j.telpol.2008.11.001
Yayla-Kullu, H.M., Tansitpong, P. (2013). A Critical Evaluation of U.S. Airlines’ Service Quality Performance: Lower Costs vs. Satisfied Customers, Journal of Management and Strategy, 4(4), 1-11, https://doi.org/10.5430/jms.v4n4p1
DOI: https://doi.org/10.22190/TEME190313005M
Refbacks
- There are currently no refbacks.
© University of Niš, Serbia
Creative Commons licence CC BY-NC-ND
Print ISSN: 0353-7919
Online ISSN: 1820-7804